Earlier this spring in London, RE•WORK brought together leading minds working in AI, deep learning and machine learning and hosted the Startup VC Session, giving up and coming companies working in AI the opportunity to pitch and discuss their ideas to VCs in a mentoring session.
As AI continues to grow startups are building revolutionary companies that will disrupt society and business. On the other hand venture capitalists are finding interest in these startups and therefore bringing them together in this way is a chance for both startups and venture capitalists to mutually benefit. As a result, we are assisting the development of AI as a tool to revolutionize society and business whilst creating a community of the most cutting-edge entrepreneurs in this area. The session brought together exciting young startups with less than $5m in funding to pitch their ideas, network with and receive feedback from leading VCs. We were joined by VCs from Hoxton Ventures, Samsung Next, Atomico, MMC Ventures & Global Founders Capital.
We spoke with Julia Morrongiello, Investor at Global Founders Capital, and Ben Blume, Principal at Atomico to hear about their participation at the event and what they usually look for in a startup.
Julia kicked off by explaining that Global Founders Capital is a $1bn stage agnostic fund started by the founders of Rocket Internet. 'We are lifecycle investors, investing early all the way through to IPO/exit. We've backed companies such as Facebook, Linkedin, Slack, Concur Solutions, Funding Circle, Kreditech and DigitalGenius amongst others. I’m part of the London team and involved in sourcing, carrying out due diligence and investing in startups across the UK, Europe and the US. I also lead all of our blockchain and crypto initiatives.'
Ben, who works on the investment team at Atomico focuses on investing into ‘deep tech’ companies using technologies including Machine Intelligence, IoT, Robotics, Drones and Big Data analytics to disrupt major industries. Atomico is a London based VC fund that invests in disruptive technology companies with ambitious founders from Series A onwards. Their team is made up of experienced entrepreneurs, seasoned investors, technologists, and a dedicated Growth Acceleration Team, who bring hard-won expertise from companies including Facebook, Google, Uber, Skype and Spotify to help the portfolio with projects including marketing, hiring, and new market entry as they scale to become global winners.
I asked Julia and Ben about the types of companies they’ve previously worked with and what inspires them to work with a new startup:
DigitalGenius, an AI-based customer service solution. Currently, customer service agents spend huge amounts of time writing repetitive, often standardized, responses to customer enquiries. DigitalGenius is using Artificial Intelligence to automate customer service conversations and streamline customer service agents’ experience, helping companies to significantly reduce costs, increase customer satisfaction, and transform contact centres. They are currently working with the likes of Thomson Reuters, Unilever, L’Oreal, KLM and Uber, amongst others. They’ve been building up their capabilities for the last 3 years, have an awesome, highly ambitious team and are way ahead of the competition! I really enjoy working with the team and love hearing about their progress month on month.
At Atomico our fund size means that we look at startups across many sectors and business models and evaluate all aspects of each opportunity, including leveraging the specific experiences of our individual team members to provide deeper review. For ‘deep tech’ companies, where I have focused due to my technical background, I work closely on the evaluations with our Investment Partner and former CTO Siraj Khaliq.
Some of the things I personally look for when evaluating ‘deep tech’ companies, and where strong validation helps me to build conviction include:
Founders with proven expertise in the core technologies they are using to develop their product
A validated commercial model, so that even if the company is pre-revenue I can get comfortable that once they launch people will be willing to pay
Benchmarks that indicate superior technology which I believe can be a competitive advantage; what these look like differs by industry, but could be general like speed or energy performance, or sector specific such as task level precision and recall
Macro technology trends that support the disruption that the company is trying to create
Lack of preparation. When speaking to VCs it is so important to really understand the market you are operating in, your competition, your customers, what the key drivers of your business are and to be able to communicate them effectively. If you are tracking specific metrics, for instance, you should have those numbers at the top of your head.
Not spending the time to prepare a good set of historical financial and operational metrics and a good financial plan can make your fundraise harder. Having these materials prepared well in advance will allow you to demonstrate to investors your ambition levels, quickly answer questions about historic performance or how key metrics have developed, provide a justification of the amount of funding you are looking to raise and help investors think through longer term capital requirements for the business.
Fundraising is a two way process. Ask as many questions of your potential VC as they ask of you, and in the end over anything else, pick the team you will work best with and will add the most to your business.
Always try and get a warm intro to a VC. VCs will be much more receptive to an introduction from someone they trust than a cold call or email from someone they’ve never heard of.
It was great to meet some stellar founders and hear about all of the interesting startups they are working on.
I see Finance, Retail and Advertising as some of the most advanced industries in adopting ‘deep tech’ today, and so it was great meeting some of the great startups building products that are improving how things are done in these industries, and who I hope are seeing real commercial traction due to this.
Couldn't make it to London in March? Join us this September to learn more from exciting new startups working in AI.