Berlin’s Visionaries Club outs two new €40M micro funds for seed and growth-stage B2B
Visionaries Club, a new European VC focussing on B2B, is disclosing that it has raised two micro funds of €40 million each, aimed at pre-seed/seed and Series B, respectively. The Berlin-based VC firm is founded by Sebastian Pollok and Robert Lacher.
Pollok was a VC at e.ventures in San Francisco and also founded Amorelie, which exited to to Pro7Sat.1 Media Group at a valuation over $100m in 2018. Lacher was previously founding partner of La Famiglia, where he is said to have been an early investor in companies such as FreightHub, Coya, Asana Rebel, OnTruck, and Personio.
LPs in Visionaries Club include numerous successful European founders, such as Hakan Koc (Auto 1 Group), Jochen Engert and Daniel Krauss (Flixbus), Johannes Reck (GetYourGuide), Dominik Richter (Hello Fresh), and Florian Gschwandtner (Runtastic).
Investors in the funds also include family businesses of Markus Swarovski, Shravin Mittal, Felix Fiege (Fiege Logistics), Christian Miele, Max Viessmann (Viessmann Group), and members of the Siemens, Henkel and Bitburger families.
In an email Q&A with Pollok and Lacher, we dug a little more into Visionaries Club’s remit, its steadfast focus on B2B, why it is doing seed and Series B but not Series C, and the pair’s views on Brexit.
TechCrunch: Why B2B?
RL: We believe the next big wave of disruption will happen in the B2B space, with the potential to re-shape the backbone of our European economy. Reinventing the B2B IT stack is the here-and-now opportunity since there is no reason for any part of the value chain not to be digitized in the long run if there is potential to streamline and automate processes.
SP: In the past 15 years we had a great wave and momentum of consumer-driven companies. But if you look at our European industry landscape, our true DNA are especially those industrial world market leaders that we’re famous for. Most of them run a profitable business, but often fail to manage the digital transformation on their own. That´s where we see the opportunity for us!
With our network-driven approach, we want to bridge the information asymmetry of “what´s possible” in the technology startup space and “what is actually needed” in the industrial space. With Visionaries Club, we bring those two worlds together to fuel the next wave of disruption.
TC: Visionaries Club has two funds, one for pre-seed/seed and one for later growth rounds, and plans to invest in B2B startups across Europe. On the seed fund, can you be more specific regarding the size of cheque you write and the types of companies, technologies, business models or B2B sectors you are focussing on?
SP: Sure! We are planning to invest between €500K to €1.5M into great B2B founders in the pre-seed and seed stage taking around 10% ownership in their companies. We love to look at technologies that kill inefficiencies across the B2B value chain and create a significant (10x) improvement – starting from sourcing and procurement platforms, modular production systems, warehouse automation, new digitally-enabled logistics platforms to more digital after-sales solutions.
RL: The nice thing about these technologies is that almost every company has a supply chain and the same problems: So most technologies here are relevant across verticals and create big market opportunities to tap into for startups. Great examples of recent European champions in this space are Celonis for process mining, UiPath for RPA or Graphcore in the AI-driven processor space – all of them B2B fast scalers, and all of them relevant across verticals. And the next generation is in the starting blocks with companies like Munich-based Arculus which has re-invented production with a modular approach already serving their first customers Audi and Porsche and now expanding to other verticals.
TC: The Visionaries Club growth fund is targeting Series B and is designed to enable you to double down on the most promising startups in your portfolio and even later stage startups you haven’t yet invested in. Related to this, you explicitly say you have chosen Series B as you want to avoid overcrowded Series A rounds. What is your thinking here?
RL: There has been a significant influx of capital into the European VC ecosystem in the last two years with most VCs having raised bigger funds with €100 – 350M in size focusing on the Series A stage as an entry point. First and foremost: This is an amazing development for founders and our ecosystem, since great founders can choose with which fund they want to team up.
SP: At the same time the VC landscape has become a red ocean for the many Series A focused VCs competing for the same stage and ownership, with the value propositions of many funds being rather similar. We want to stay out of this game and build a complementary VC product for the early growth stage where B2B tech founders can choose one of the Tier I European or US funds as a lead while we co-invest with a smaller check bringing in our industrial LP network to help them scale.
TC: You say that the importance of money has decreased in venture capital and that in 2019 access and network has become the most important currency to get into the best deals. How do you plan to access to the most promising companies Europe and what makes your network standout (because, frankly, every new VC is trading on the same promise)?
SP: Fair point! What separates us from other VCs is that we really have 1) only leading entrepreneurs as investors in our fund 2) that these entrepreneurs are both from the old and new economy and 3) that we take our approach also to the early growth stage.
As to our seed fund: Our 12 unicorn founders are great satellites and scouts in the market to access deals via their entrepreneurial networks early before they get “into the market” for fundraising. At the same time they have already been a great support in our past investments joining board meetings and helping young teams to transition from a seed to a growth company because they have just went through this same process themselves.
RL: As to our growth fund: We believe our biggest USP is the family business entrepreneur network from the industrial space as we can help B2B companies refine their product market fit and scale within our network. Lead gen in B2B is one of the most difficult challenges for startups, since you don’t win customers via digital channels such as Facebook. It is a “foot on the ground” business – we can help companies build those relationships faster.
Compared with typical publicly-listed corporates, family business entrepreneurs have an entrepreneurial DNA themselves, make fast decisions, are willing to take bigger risks and think long-term: All ingredients which make them a great sparring partner for B2B entrepreneurs in their growth stage.
TC: Both funds are relatively small, and you say this is deliberate. What are the advantages of a micro fund and also the disadvantages?
RL: It gives us more agility to co-invest with other great funds instead of competing which is good for founders because it is all about getting the most value-add on board. We also do not expose founders to a signaling risk at the early stage since we only lead Seed rounds and then support our founders in raising their Series A with one of the larger Tier I founds from our network while keeping our pro-rata share.
On the downside: It gives us less management fee 😉 But since this is really not what we’re optimizing for anyway that’s ok. We also put our own money into the funds and want to keep our Visionaries Club team small and agile.
TC: Is Brexit good or bad for European tech or arguably just bad for the U.K.? Perhaps you can provide your perspective on Brexit as an early-stage VC firm based in Europe but outside of the United Kingdom.
SP: It’s bad for both ecosystems! Take the Oxbridge-London triangle alone where you have some of the world’s best researchers and technologists and where one of the most important assets is a direct line of cooperation between ground-breaking research on the one hand and leading industrial corporates on the other side as key driver to commercialize promising technologies. We have now seen the first corporates from Germany and France re-locating or closing down their UK offices which will make it tougher to collaborate. As to our goal of helping to form more European champions this is a very sad development.
On the other hand the London startup & VC ecosystem has matured and brought up amazing funds and entrepreneurs to back the next generation of founders. We hope that the VC and startup ecosystem will ignore Brexit wherever it can and see this still as a collaborative European play to be successful: We promise that we will try to do that whenever possible!