The Reverse Pitch: True

True is a venture investor with a difference-- the firm uniquely specialises in supporting companies in the retail and consumer sector. This focus allows the firm to support its portfolio companies far beyond seed funding, through their industry sector expertise and an extensive network of corporate partners.

True was founded by Matt Truman and Paul Cocker in 2013 and began as an industry-specific accelerator. Today the company has grown on to become an early-stage investor, a private equity fund and a partnership program. But it is their industry focus and partnership division where the fund truly differentiates itself from other venture firms. By working with their corporate partners (including TJX Companies, Morrisons, and 7 Eleven), True can connect their portfolio companies with established brands and industry leaders across multiple markets, allowing startups to accelerate faster. For example, True has helped grow the client-base of mental wellness portfolio company, Unmind, by introducing the team to new clients including M&S, John Lewis and Landsec. True's effort to support and propel startups in the retail sector extends beyond their programme offerings to their central-London office space, which they offer as co-working space for consumer technology startups (even those outside their portfolio) to use when available.

True's dedicated seed fund team is based in London and headed by Oksana Stowe and Taos Grisdale (with the support of Rich Anson and Claire Cherry). I connected with Oksana to learn more about the firm and how they find the most promising companies at the forefront of retail.

Can you summarize your investment thesis in three sentences:

Our seed fund invests in businesses which fit into our vision of the future of the retail and consumer sector. On one hand, we look at highly scalable B2B technologies which can empower retail and consumer brands, and on the other, we invest in category-shifting B2C business models. We typically invest around 6-18 months after launch, so we can gauge client/consumer demand.

What industries and business models are you most interested in investing in?

We always have a category watch list, based on demand from our corporate partners and our views on where we believe the future of the industry is heading. Right now, we’re looking at dynamic pricing tools and scaleable content creation solutions. We are also seeking technologies and products, which can help reduce the horrific amounts of waste produced by the retail and consumer industry.

Which technologies do you find most exciting right now, and why?

We are very much driven by the use case of a business, rather than focusing too much on specific technologies. I’d actually say that investors are now sometimes put off by the ‘AI’ and ‘ML’ tags, because we are bombarded with them so much. We seek out businesses that can demonstrate how they move the needle for their clients, rather than being fixed on the technology that they use to do that.

How much do you typically invest?

Before 2018, we ran an accelerator model, where we invested very small pre-seed tickets into the best startups coming through what was then called the TrueStart programme. However as we’ve evolved as a firm, we evolved our investment thesis away from pre-seed and raised a small standalone seed fund instead. We also felt that the risk-return dynamics of investing in seed vs. pre-seed were attractive, as some of the best startups now often skip the pre-seed stage any way. On average, we’ll invest £250k up front, with scope to follow-on for one or two more rounds. Often, we will take part in syndicated rounds of £1m-£2m and work closely with trusted co-investors.

Beyond funding, where does True provide the most “value-add” for founders?

We believe sector specialism is where the industry is heading for a variety of reasons. ‘Smart money’ is becoming increasingly important for startups as the number of fundraising options swell for the best startup - with dozens of new VC funds coming to market every year, pure financial investment doesn’t cut it any more. 

Most investors reel off a similar spiel about value-add. Fortunately, we can back it up. Our biggest value-add is definitely our sector specialism which means we have access to thousands of global retail, consumer and leisure professionals, enabling us to make beneficial introductions to each member of our network. We frequently connect our portfolio companies with our corporate partners, which include the John Lewis Partnership, 7-Eleven and Abercrombie & Fitch, in addition to the hundreds of other corporates in our wider network. Our point of contact at our corporate partners is always a key member of the C-Suite, and these high-level introductions can drastically reduce lead time when trying to sell into corporates. 

Our colleagues in our commercial team also identify B2B technologies (and sometimes category-changing B2C models) outside of our portfolio, which can provide demonstrable value to these corporates. So even if a startup doesn't fit our investment criteria we are still keen to understand more about the latest solutions and technologies coming to market and help if there is a clear use case for our partners.  

We can also introduce B2B startups to the many mid-sized B2C businesses that we know through our Private Equity team. We use the B2B companies from our seed portfolio as enablers for these later stage B2C investments. 

Having a sector focus also means that we have lots of internal expertise in the space and we frequently spend time thinking about the future of retail both individually and as a team, so we can offer strategic advice to our portfolio companies. I spent 10 years advising high-growth companies such as Just Eat, our founder headed up J.P. Morgan’s European retail business, and our Strategy Director founded and built UGC platform, Reevoo, so we have seen the retail and consumer space from all angles. Finally, given that we typically follow-on in rounds, we are generally amenable to others’ terms as long as they are reasonable and we try to ensure we are not overbearing on founders in terms of reporting requirements. We typically take a smaller stake of investment rounds but punch above our weight in terms of value-add. This has allowed us to squeeze into a range of over-subscribed fundraises recently, including with ThirdEye, FunnelAI and Shameless Pets.

Do you have any geographic restrictions on investments?

We aim to do around 75% of our investments in the UK. For the remaining 25%, we are open to the best opportunities from around the world. We have good flow from the US - and have already closed two US investments this year - France, Australia, Israel, but also increasingly India and continental Europe. The market in the UK, and London in particular, can be very saturated due to the EIS programme, so we feel that our ability to deploy opportunistically elsewhere gives us a real edge.

Through the Commercial branch of our operations we have been able to efficiently plant networks in other geographies. For instance, our Commercial colleagues have carried out projects with major corporates in Bangalore and Tel Aviv this year. As part of these projects, the Commercial team work closely with local VCs to get under the skin of the local startup scene. The team has been able to leverage these relationships to accelerate flow in these regions, which is quite unique.

What is your commitment to diversity and inclusion?

For us, diversity and inclusion means being very open to reviewing opportunities, from wherever they are sourced. We couldn’t be further from the stereotypical ‘old boys’ club’. For example, we review every single investment application that comes through our website and make every effort to reply to each.

We find that this approach yields a pretty diverse founder base. This year, 50% of the founders we’ve invested in are BAME and 40% female. 

True also tries to ensure we don’t just recruit from one talent pool - we believe that a more diverse team will naturally lead to more inclusive and diverse investments. We have a well balanced firm and half our Early Stage Investment team, which I head up, is female. To help ensure we continue to attract a diverse mix of talent we launched our inaugural internship programme this year - and are looking to run similar initiatives in the future.

2019 Investments 

What’s one investment from your Anti Portfolio that you wish you hadn’t passed up?

“Hindsight is a wonderful thing. If we all had it there would be no history to write about.” And like any fund, we have a few that we regret missing out on: Flux and The Dots are a couple that spring to mind.

If you could invest in any type of business or technology right now (real or imagined) what would that be?

The digitisation of shipping is a ‘megatrend’ in retail, and the industry has been awash with investment in the last few years and if we invested in one of these businesses I’m confident we’d be well positioned to plug the business into our PE portfolio brands and partner network. Flexport raised $1.1bn from SoftBank’s Vision Fund earlier this year and is leading the way. Interestingly, Flexport was the second startup to really have a crack at digitising freight forwarding (after an Irish startup), which proves that being the first mover isn’t always an advantage!

What is the best way for founders to get in touch?

We are very open to approaches from all sources. It’s always best if we can meet you in person but it can be much more time efficient to either email or apply via our online form, rather than wait to bump into us at an event!

Thank you Oksana and True!