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Update: An earlier version of this story positioned the fund of 160 million euros as announced recently. In fact, it was released in late 2017 and consists of a combination of Heartcore Fund III (Series A) and Heartcore Progression Alpha (growth fund followed by Heartcore's most successful companies).
Sunstone Technology, the technology arm of Sunstone, and a European venture capital company with offices in Copenhagen and Berlin, are now well-known, and their combined fund of 160 million euros is the largest in Europe. will only invest in mainstream startups. seed and at the A series.
The new name of the venture capital company, founded 12 years ago, is called "Heartcore Capital" and, according to its partners, is designed to reflect the understanding that "entrepreneurship is like a intensive course of personal development ". Aware of this, venture capital companies must first and foremost show empathy to the founders rather than maximize their returns.
(Certainly, for some readers, this will seem like a rather ambitious goal.You can read my thoughts on the principle of Q & A below with Jimmy Fussing and Max Niederhofer of Heartcore).
The redesign of the brand is also linked to the company's official repositioning, focused solely on the consumer – both B2C and B2B2C – with the goal of investing in the seed and A-series stages. According to Heartcore, the segment consumption will continue to achieve "huge results", and notes that less than 5% of global consumer spending has already been made available online.
"We want to provide entrepreneurs with a superior CR product in this category and we think we can do that through the network effects that come with focus," Heartcore's Max Niederhofer tells me, citing the company's previous investments. such as GetYourGuide, Natural Cycles, Boozt. Exporo, Seriously, Lillydoo and others. "We want to invest in the new European consumer brands that define a category," he said.
At the same time, Heartcore says it has expanded its investment and partner team to offer VC a "truly pan-European coverage" in the consumer segment. Yacine Ghalim has been promoted from principal to partner and is helping to create an office in Paris. Heartcore also hired Levin Bunz as a partner in Global Founders Capital, Rocket Internet's $ 1 billion investment arm, and will be based in VC's Berlin office. Finally, Signe Marie Sveinbjørnsson was hired as a partner. She will serve as Chief Operating Officer and will be based at Heartcore Headquarters in Copenhagen.
Below you will find a Q & A with Heartcore Managing Partner Jimmy Fussing and General Partner Max Niederhofer to learn more about the Brexit's new fund, identity and reflections. .
TC: Why change the name? If you feel that you could lose any brand recognition you already had.
JF: It was as if we were already changing a lot: a new positioning as European venture capital for the consumer, the spirit of the "founder". So the name change was a consequence of that. We have been operating under Sunstone Capital since 2007 with Sunstone Life Sciences, which targets a very different entrepreneur. Our founders are often younger, they do not come from R & D companies or academies, they tend to wear sneakers rather than lab coats.
MN: Over the last decade, many capital has been invested in the industry. The number of potential transactions has increased and we have naturally turned to the consumer. There are many benefits to specialization and the new brand more clearly states what we stand for.
JF: Like our founders, we must take risks to offer something truly unique. This new name builds on our history and our journey. It's profoundly authentic. We like the vulnerability of the word game and the fact that it is just a little outside our comfort zone. The goal of CR marketing is to be among the main founders. We think the name of Heartcore is very memorable and that positioning as a consumer resumé in Europe is truly unique.
TC: In the future, the fund will be entirely consumer-oriented (B2C and B2B2C), while many other venture capital firms are likely to consider B2B and the company as safer and more secure bets no doubt about the European advantages. What is the thought behind the consumer?
MN: VC is a game of energy laws, in which your larger companies account for a large part of your return. It's not really about reducing risk from a portfolio perspective. There are more important results in consumption compared to business-to-business trade – also in Europe. And Europe has, over the last hundred years, created exceptional consumer brands. Even online, think of Booking.com, Spotify, Skype, Supercell, Minecraft … we think we can build on these strengths.
JF: Historically, we've also been very good at B2C. We have supported very early people like Boozt, GetYourGuide, Natural Cycles, Prezi. The technology exists to build large consumer businesses from virtually anywhere. The founders of all Europe are rethinking each value chain from the point of view of the end customer – we believe that there is a huge opportunity to create truly consumer-defining consumer groups in Europe.
TC: You quote a statistic that indicates that only 5% of the trade has been put online worldwide so far. Why do you think it is, what are the bottlenecks?
JF: To a certain extent, it's the different nature of value chains in different sectors. For example, the media has much more easily disrupted online media because of its fragmentation, competitiveness and zero marginal cost of delivery of the final product. Retail has necessitated the development of a physical delivery infrastructure, which has been happening over the last decade, and that is why e-commerce continues to grow rapidly. Then, industries such as health or finance have regulations and different access controllers, which makes it a bit difficult for newcomers. But just look at where are the neo-banks.
MN: As a technician, you tend to calibrate digital penetration using existing platforms such as social media or entertainment, and especially with a skewed view of the potential consumer's identity. The old, very physical industries, such as real estate or transportation, offer tremendous opportunities, but also a huge opportunity to give more consumers access to better products and services. Think about the "poorest 90 percent" – not just in the western world, but everywhere.
TC: By deepening your investment mission and beyond the warm and unclear notions of technology, which improve the lives of people, in which consumer sectors, what problems or technologies do you want to invest through this fund?
JF: We have sectoral investment theses in areas such as consumer brands, food, digital health, travel and finance. We really want to invest wherever the consumer spends money. And we have investment theses specific to the business model, for example for marketplaces or consumer subscriptions. And then we have a framework for our thinking about the issues: what the consumer is trying to achieve, how it is doing a better job, what emotional needs are being met in the context.
MN: There are actually two areas of consumer investment: one is the emergence of new platforms, where consumers are rapidly adopting a new technology. And that's probably where we've seen the bulk of corporate returns, like Google, Facebook and others. But there is a second bucket where people are applying existing technologies to reinvent old industries and offer new products and services. It's incredibly promising right now and that's where we spend most of our time. We believe that the majority of our investments will come in this second category. But we are still looking for the first one: what will the adoption curve of voice, VR / RA or the decentralized Web for consumers look like?
TC: What steps and regions will the fund invest in? that is, the location and the average size of the checks.
JF: We focus on Europe, with occasional investment in the United States. We are resolutely seed and A-series, with check sizes ranging from 250,000 € to 5 million €, which also allows us to participate in the great series As.
TC: You talk about Heartcore Capital be "the founder of the first" and have more empathy for the founder than return alone. However, in various forms, this is the tone of almost all venture capital companies, perhaps a sign of a sparkling market. What does Heartcore actually do to put this philosophy into practice?
MN: I like this question because it really shows what it is about. You're asking for something "tangible," but it's just that the adventure is not just a functional value-added game about what you do. It's just as much what you do and how you present yourself: empathy and humility, respect for the company's way of life, the spirit of coaching.
JF: We have a long list of fundamental principles about how we interact with the founders, which is totally different from what we've seen from other VCs. Everything returns to the quotation of Saint-Exupery on which we base our name: "It is only with the heart that one can see correctly; what is essential is invisible to the eye. "
TC: Let's talk about Brexit … You want the UK to leave the EU and how do you think it will affect the UK ecosystem, but more importantly, across the various European hubs?
JF: The UK has a very strong and deep boot ecosystem, and Brexit will not change that. Of course, a tough Brexit will complicate business in the UK. We have seen other European hubs try to exploit this. Paris, Berlin and our Nordic home market have the impression of doing well. That's why we created offices and teams locally.
MN: But we want to continue to look at mainstream UK based startups and Brexit will not stop us from doing that. London has the best track in European consumer technology and we think it will remain a hub for us in the future.
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