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Crane Venture Partners, a start-up venture capital firm based in London targeting what it calls "smart" startups, is officially launched today.
Founded by Scott Sage and Krishna Visvanathan, both formerly of DFJ Esprit, "Crane I" completed a second closing totaling $ 90 million. The company invests in data-driven companies. Sage and Visvanathan are joined by Crane partner Andy Leaver.
Specifically, Crane is looking for Europe-based pre-A startups ready to write the first institutional check. The company is particularly optimistic about London, noting that 90% of cloud and enterprise software companies that have gone public in the last 8 to 10 years have opened their first international office in London. Investments already made from this fund include Aire, Avora, Stratio Automotive and Tessian.
Crane's flagship companies are MbadMutual Ventures, the venture capital arm of MbadMutual Life Insurance Corporation (MbadMutual), and British Patient Capital (BPC), a British taxpayer, funded by UK taxpayers, alongside other founding and VCs covering the entire US, European and Asian territory. In addition, Crane formed a strategic partnership with MbadMutual Ventures to give Crane and its portfolio companies "deep access" to new markets and networks as they expand internationally.
Below is an email with Crane's founders Scott Sage and Krishna Visvanathan, where we discuss the mandate of the new fund, why Crane is so optimistic about the company, London after Brexit, and why the business is not so boring!
TC: Why do London and / or the world need a new business-oriented resume?
SS: Just to correct you Steve, we are a seed fund for businesses only 🙂 – which makes us somewhat unique. We support founders who have a differentiated view of the product but have not demonstrated the business metrics commonly sought by their counterparts. We see opportunities, not just risks.
TC: It's been years since I heard that you are raising a fund together and of course, I know that Crane has already made more than 20 investments. So why did you take so long to close and why are you only officially announcing now?
KV: It was really a humiliating experience and took us 12 months longer than we would have hoped! We completed our first closing for Crane I, our institutional fund, in July 2018, two and a half years after the start of our exercise. We had previously created a pioneering fund and started investing in the first quarter of 2016, quietly strengthening our portfolio and presence. We had to wait before concluding the final closing a few weeks ago for regulatory and compliance reasons.
TC: You say that Crane largely targets start-up "smart" start-ups – as opposed to unkind companies! – but can you be more precise about the size, the step and the sectors, technologies or technologies in which you plan to invest?
SS: Data is at the heart of our thesis – it will be necessary to reconstruct the entire corporate stack to understand and learn from data, that's what we mean by intelligence. The majority of business applications installed today are workflow tools and do not do anything smart for the user or the organization. We are also excited about the all-new products for new markets that did not exist before.
Our first checks range from $ 750,000 to $ 3 million, with significant reserves to support our companies through Series B. We believe our preferred position helps companies develop their market strategies and we are pleased to invest in our portfolio at the time of investment), even if we prefer to invest in post-product.
TC: Since you usually invest in pre-series A, where a start-up company can generate revenue and still have no definitive market fit, what are the outstanding qualities you're looking for in the founding teams? the badumptions on which they bet?
KV: You mean apart from the evidence that every resume would say about pbadion, vision, hunger, etc. (mea culpa!)? We love highly technical teams who have a visceral understanding of the problem that they solve – usually because they have lived before. Many of the founders we have supported reinvent the market segments they serve.
TC: In recent times, almost every new fund is talking about operational support for portfolio companies. What is Crane doing to actively support start-up businesses that you support?
SS: Our sole objective is to support the founders in their marketing strategy that encompbades everything from product positioning to marketing generation, leading to the creation of a successful sales team, renewal and cross selling of customers . We have formal modules that we organize behind the scenes with a new company once we have invested and we also build a stable base of venture capital partners specializing in these areas. We think that there is a multiplier effect in creating a business community organized in similar stages with parallels in their business models.
TC: Although Crane is pan-European, I know you're particularly optimistic about London as a leader in creating and adopting business technologies, why?
KV: We believe that London has a large concentration of customers, talent in the fields of data science and software, business talent and the market. 90% of cloud and enterprise software companies that have gone public in the last 8 to 10 years have opened their first international office in London. We have also seen a new audacity among young founding beginners who are not bound by the limits of their imagination. Look at Onfido, Tessian and Senseon – all the first founding teams we have supported and who are building companies that define a category.
TC: Which brings us to Brexit. How does Crane envision the EU's exit from the UK and the challenges it will undoubtedly create for high-tech companies and businesses, particularly in terms of recruitment?
SS: We believe in a global economy and the UK is a major contributor. If London remains the capital of the European start-up, it is because of its diversity and openness. The exit of the United Kingdom from the European Union goes against what we believe will have a negative impact on our ability to attract talent and stay at the forefront of European technologies.
TC: Finally, business technologies are often perceived as "non-badual" and many journalists (including myself) yawn, even if it's a market huge and probably hidden software, used by the engine rooms of the global economy. Tell me something that I may not already know about business technology and that I can repeat at a dinner without everyone falling asleep?
KV: Imagine a world in which you turn on your laptop and your day is pre-arranged for you, your e-mail protects against catastrophic mistakes, your digital identity is portable, your physical workspace synchronizes with your calendar and your rooms. meeting booked automatically. Solvency is something you control, allowing you to focus on your creativity as a journalist and not worry about pfaff. It's the smart business in the guise of Tessian, Onfido, OpenSensors and Aire, a selection of companies in our portfolio. It may start with the company, but in the end, products and companies under construction are all for people.
TC: Scott, Krishna, thanks for talking to TechCrunch!
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