Ophelia Brown’s Blossom Capital announced Tuesday that it has raised $432 million for its third venture fund. (I told paying subscribers back in April 2021 to watch out for Blossom’s next fund.)
The European Series A firm is taking a big leap from its $85 million first fund in 2019 and its $185 million second fund in 2020.
Tom Dotan and I talk with Brown about her crypto investing — including Blossom’s recent investment in juggernaut MoonPay, which raised a $555 million Series A at $3.4 billion.
Brown tells us that she’s buying NFTs with her venture capital fund. She appears to have purchased CryptoPunk #985 on Christmas Eve for about $400,000 (98 ETH). Now, with the falling price of Ethereum, it’s worth a little over $300,000, according to Etherscan.
MoonPay isn’t the only Series A in name only that Blossom has participated in. The firm invested in Checkout.com’s $230 million Series A round that valued the company at about $2 billion. Thankfully for Blossom’s limited partners, Checkout.com just raised at a $40 billion valuation.
We also talk about Brown’s early investment, with Jan Hammer, in Robinhood back when she worked at Index.
And Brown tells us why she doesn’t like her friends to know her current whereabouts.
Get full access to Newcomer at www.newcomer.co/subscribe
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Welcome. Hey, it's Eric newcomer.
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I'm here with dead cat. We've got Tom around and a
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philia. Brown is here.
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She's the founder of Blossom capital European series, a fund,
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that just raised four hundred thirty two million, Which is
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like a huge leap. I think I was looking at my
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story that I wrote a few months ago it was like 85 million.
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2019, 185 fun to and 2020. And now we're at 4:32.
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So excited are specific number by the way. 4:30, I know it is I
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wanted about. How did you get to that number?
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Did you know, want to round up to 5 or happened?
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Just take every dollar. You could get it.
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Yeah, for 30, just didn't seem like enough scraping the battle,
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you know. We actually had a hard cap on
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the fund. So we would not allow to raise
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any more that point because there's so I clearly shanor some
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know. So when you're raising you put a
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fun Target in and then you negotiate with your LPS, the
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maximum amount you can raise and unfortunately we couldn't go any
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further. So that's why it's very
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specific. All right starts to change the
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strategy so if you're an LP and you invest you don't you're much
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more excited about being in a Four million or fun than a
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billion dollar fund. Exactly.
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Actually. Exactly.
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Yeah, glad to have you on. I was writing about you, right?
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Sort of clearly as this was in the works.
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What was your takeaway from? Sort of the fundraising process
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or what was the pitch to help? He's like give us a little bit
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of the behind the scenes now that it's all done and you can
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talk about it. Yeah, absolutely.
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So we actually did the fundraise last summer which I guess was
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around the time we were speaking, you You almost looked
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at what you did, okay? I thought I thought it was
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something. I'd said you some slides, my
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back. So you broke the story, but no,
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it was, it was actually a, it was a great process.
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We were very fortunate, the majority of our fund, one and
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fun to LPS came back, and then we've developed by close
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relationships with a lot of institutions in the US since
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we've started. So I think the one thing that
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LPS have liked is that, you know, our fun three decks is
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still pretty much our fund one deck in terms of how we see the
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opportunity in Europe and me. Each time we come back for a fun
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is just proving out the story. So that's been a pretty
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consistent message from us from the beginning, our most of your
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LPS european-based as well or who are you drawing from.
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We started out. I think 60% Europe and 40% us
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with Fundraise. We're actually 70% u.s. now.
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So we were pretty proud to add some of the world's best
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endowments for this fund. We've got Pension Plan,
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Foundation, Etc. So it's a great group of
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Institutions was that as a reflection of more US based
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investors being interested in the European Centric fund or
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did, what was European Capital looking elsewhere or had it, why
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the why? The shift yeah, absolutely.
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Think your first point is exactly.
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I mean, when when when when we went out to raise our van one in
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2018 like no one was really looking at Europe, it was still
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considered a bit of a Backwater yeah, saying world I guess and
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then I mean I'll pitch with find one was essentially like there
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is a lot happening in Europe. It's pretty undiscovered at the
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early stage but there was a lot more us growth Capital coming in
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and we expect that to accelerate.
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So when we Back for our fun to it will already seeing kind of
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the u.s. fund starting to invest.
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We had better proof points. And I remember at some point in
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our fund, two ways, actually had an LP saying, we need to add
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European exposure to our portfolio and I was like, my God
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no one of those words and find one and sometimes we I mean,
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we've really seen the shift and I think all of the proof points
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there and especially the institutions that I mentioned.
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I mean, they're seeing the European exposure increased from
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their u.s. managers and so naturally, you're looking to add
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now. Lobbies have some exposure
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through the US funds. Writer are.
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I'm curious, I guess the real question is like this series a
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positioning and Europe, you know, you came up through index,
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your principle, there are, I believe, and then you worked at
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local Globe, which is obviously a premier seed fund, why'd you
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decide series a like that there needed to be sort of a strong?
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Local Player, when it does feel like the Sequoias of the world
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are, certainly gunning for series a rounds to.
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Or how did you think about that position when you started the
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phone? So it was actually when I was at
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local globe and I was doing seed investing in the UK.
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And I just saw this repeatable pattern, that, you know, the
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most ambitious, talented, entrepreneurs would always look
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to the West Coast to raise capital and it be repeatedly
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told by, you know, the likes of Sukhoi.
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They are grayed out Benchmark excetera we don't invest in
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Europe at the early stage, we don't have the bandwidth than
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expertise like come back to us at the next round is you kind of
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proven it out or accelerating growth in the US and then they
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would come back and kind of look at the European landscape and I
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just won enough funds. And the one enough funds that
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thought like Partners did on the west coast.
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Like very comfortable and taking risks, could really think
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ambitiously had the experience of like, scaling technology
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companies. And in my mind like why that
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made, you know, I started out in Europe in 2012 and it was pretty
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slim pickings at that point in terms of like the number of
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opportunities if you fast forward to like 2017.
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So I think we went from something like 600 seed deals
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were done in 2012. Fast forward to 2017, like, you
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know, six and a half thousand, you do it for being done that
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yet. So, in my mind, it just didn't
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make sense that there wasn't a great, a font, and I saw a real
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Gap in that market. It and are all your portfolio
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companies in Europe, all of them.
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Yeah, yeah, you're restricted to that or you're going to stick to
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that? No, we're not restricted by any
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means but it's a choice. It's like where do we spend
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time? Where do we have bandwidth for
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our Founders? Well, we in close proximity.
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Where do we have the networks and the understanding.
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And one thing we've been very focused on specifically from
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like the network and expertise point of view is the partnership
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isn't limited to Europe. In terms of that that scope like
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you know, I spend a lot of In Silicon Valley before this and
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continue to me not long ago. Exactly and Alex who we added
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last year from ivp, obviously, spent his entire Venture career
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up until now in the valley, so having that continued, West
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Coast Ike Network and expertise has been really important to us,
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what's been like the makeup of a successful European, you know,
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startup, at this point, I mean, I cover delivery and over the
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gig economy. And so, I've spent far too much
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of my time. Time in the last couple of
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months looking at all of the European base.
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Instant delivery companies, your gorillas your flanks here.
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We even had one in our portfolio.
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We had DJ until each other and by go puff.
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Exactly. Yeah.
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So that obviously like a Super Active Space, maybe we can talk
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a bit about that but like, what's been?
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You know, what do you think, like kind of kicked off the
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interest in C deals there and like what what highlight startup
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exits of their bone? Yeah, so I mean if we talk more
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broadly like the The massive exits of recent years or the
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standouts have been, the likes of a DM Spotify uipath and, you
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know, in the early years it wasn't so much.
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It was like gaming. It was like, you know, supercell
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was kind of the standout and now I think we have something like
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over number used to be like 20 unicorns came out of Europe and
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how we have like 150 unicorns have come out of Europe and way
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more exits. And I think the most interesting
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stats from last year was a third of all C deals, done globally,
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whirring, Europe, which is you know fascinating because you
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think how big the continent is like it's not just UK its
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Germany, France, like Switzerland Sweden, nordics,
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Etc. Like every country is seeing
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huge amount of growth in terms of its really early ecosystem,
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part of what's been interesting about your investing.
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So far is just you've been in to somewhat unusual deals or and
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The checkout deal was that your first investment or it was
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certainly one of your first, right?
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It was, I think it was all fourth investment closer.
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It was it was a it was a series a, right?
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But what we do is sticking to stop.
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What was the how big of a round was it?
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Well what were the terms? There is a 230 Million Dollar
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Round, a 1.6 pre. How did you get into that and to
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say decided to do it. Yeah, it He'd known about the
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company for a long time, Guillaume.
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The founder has my email from 2013 when I cold emailed him.
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When I was at index, are asking to speak.
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He actually had chosen to bootstrap his company's.
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He didn't talk to any investors until 2018, and I heard that he
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was considering raising and a good friend of mine Target and
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Minkus. The now, chairman of
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transferwise ask him for an intro to go and I went into the
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meeting. You're thinking that I was
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pitching him on investing in check out, and it turned into a
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meeting to gear and pitching me on becoming an LP and Blossom,
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and we just really hit it off. I guess we were both at the
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beginning of our fundraising Jerry and I mean, payments and
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vendek as a space. That I knew very, very well from
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indexed and his crew aboard Observer.
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Robin Hood. Exactly.
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Yeah, and his story is just, you know, absolutely incredible like
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Very unique, I mean, who in Europe bootstraps their company
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to evaluate and of 1.6 has been, no, no never raising or raised
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it 40 billion right? Just raised at 14 and then the
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moon pay was another one that just had another series.
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A allegedly, you know, the key is that they brand them as
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serious as that's. Ya know.
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What was the story with moon? Pay, its a room pay another you
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know cold Outreach to Ivan when I was looking at.
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Again, the In space and looking at Fiat crypto on that, knowing
00:11:04
that there was a huge need in the market for such a service
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and actually pinged Ivan called on LinkedIn on New Year's Eve
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and God. He's a workaholic is he he was
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funded and we built the relationship with the team over
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the last. I was kind of eight months and
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just seeing that incredible execution by that team and the
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growth. I mean it's a great Market.
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So we ended up investing. Buy a convertible note actually
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before the price found and then we participated in the price
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found those. So it was 555 million at fiery
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3.4 billion posts crypto world what what is the company do?
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Or what sort of the thesis? So it's a got both B2B and b2c
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so in the B2B side, it basically provides the rails to exchanges.
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It's any Merchant wanting to accept crypto where the starting
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point is a consumer having Fiat. So it allows you to exchange
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your dollars or Pounds to etherium or Bitcoin or whatever
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it is that you need. And for the merchant helps with
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the exchange, the custody of having all of the regulations we
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covered at cetera and then they also have Moon paid.com, which
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is the consumer business where you can just go and exchange
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your Fiat for crypto, like you could on in on another exchange.
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But the beauty is, it's your It's decentralized, they don't
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see. They don't want you to
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necessarily keep your money with moon pay.
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They don't care which wallet. You hold your, your wallet, your
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crypto in and much more concerned about making it really
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easy to get you access to your crypto, the okay weigh CDs Lee.
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And then whenever you interact with the moon paper towels
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again, you're already known as a customer.
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How would you describe the differences, culturally
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business-wise between a US base, crypto startup, and a European
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one? I mean, are there like distinct
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differences? That you've seen because I, you
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know, in different kind of startups actually.
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Do I understand that crypto is like very internationalized and
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these people probably consider themselves in certain ways like
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citizens of the world. But have you noticed
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distinctions between the approaches and the two countries
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or regions? I asked you thinking of I think
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board is break down a lot when it comes to crypto, like a lot
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of these companies or projects or dowels, like they're walking
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in remotely like Making a very much more like decentralized
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Fashions of the concept of you being and a European is less of
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a thing. I would say, I would say that
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they think of about the world a lot like their us counterparts,
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I guess work, whether you know, the borders and relevancy come
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in. There's a, if there's a scent of
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a mass and team in Europe, we spend a lot of time in the
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company building side with our portfolios.
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So helping them think about like team and scaling and product,
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and go to market Etc. So that's where the location
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becomes. Them slots where LPS sort of
00:14:02
begging you to be investing crypto, they're resistant.
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Like, what was sort of the vibe in terms of how much LP seem to
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want to hear that? You know, the strategy for fun
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three would involve a ton of crypto investing, I think, as a
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lot of appetite, obviously, a lot of the best LPS already have
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exposure through other crypto funds, and those best ones are
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performing extremely well. So I think you know, Then they
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have a lot of appetite. They're interested in what
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expertise you have to cover the sector.
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And yeah I'm I think that you know there was a lot of it
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wasn't just because we were doing crypto obviously I think
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you know, past performance was also compelling but I think
00:14:44
there is certainly appetite for it.
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How competitive are these rounds right now?
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For promising crypto companies I mean I just see every VC more or
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less that I've been reaching out to in the past.
00:14:55
Couple of weeks, I don't cover crypto in almost any arguable
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way. I mean, it's just Not penetrated
00:15:01
my world that much if it has. By the way, let me know because
00:15:03
I'm sure those stories would do really well if I wrote them, but
00:15:06
doing the delivery world? Yeah, I don't see it that much.
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I mean, I, you know, you could argue maybe somewhere on the
00:15:12
margins and every so often I see, VC is getting into
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arguments online on how crypto and blockchain can revolutionize
00:15:19
Uber, but it always comes down to like really, really
00:15:23
unimpressive, you know, Geico Insurance.
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That's like, well, okay, that seems like it's a long way off
00:15:28
anyway. But how competitive are these
00:15:31
rounds right now? I mean obviously you have a
00:15:34
history of there so I'm sure you're a compelling investor and
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a lot of these companies but is it as crazy as I imagine it is.
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It's a good question. Like I don't think it's any more
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crazy than the craziness of web to Deals you know like they're
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all gonna yeah we're all crazy. There's a lot of competition in
00:15:55
this market for you know investing in great teams and
00:15:58
companies. Although we Were actually doing
00:16:01
the analysis of our last like five or six Steals and we didn't
00:16:05
see any competition. So we figured out that were
00:16:09
either doing something very very wrong or hopefully we're doing
00:16:13
something quite right, competition.
00:16:15
When you were making the investment, yeah, the strongest
00:16:18
signifier that someone's dedicated to investing in
00:16:22
crypto, when I sent you the calendar invite by your name is
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like an NF T looking image on your Male is this, you have like
00:16:32
sunglasses. That's not a right click on
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that. I mean, I guess you could get
00:16:46
found out quite easily. So it's a, it's a dangerous,
00:16:49
gamble to pull off. I mean, that the process is
00:16:53
still hilarious that, you, you pay x with these things and then
00:16:56
actually take a screenshot to add it right.
00:16:59
It's in Gmail. I mean that that experience has
00:17:02
to improve. Have you been buying a lot of
00:17:04
entities? We both bought out the fund and
00:17:08
a little bit personally but mainly the activity that we do
00:17:10
is through the fund. The fund holds.
00:17:13
Yeah. Yeah.
00:17:15
But it's kind of interesting is that happening along the coins
00:17:17
themselves? Or the fund also has coins
00:17:19
themselves? Yeah.
00:17:20
That's is that. I'm trying to think.
00:17:22
Sorry, this is my ignorance and not covering the space as
00:17:24
closely as Eric. But is there any precedent for
00:17:27
the idea of a fun holding nfte? Essentially, like stores of
00:17:31
value, but not necessarily, you know, like what I assume is like
00:17:35
a living breathing entity of a company, it's just sort of like,
00:17:37
a VC, like investing in, you know, like a Jackson, Pollock or
00:17:41
something. You just don't we debated this a
00:17:44
lot and that was kind of the discussion when it came down to
00:17:47
whether or not we should hold. I think the ones that we've
00:17:50
bought, We Believe like that. We believe in the potential to
00:17:54
build huge communities around them.
00:17:56
So while you know, there's obviously going to be a Set
00:17:59
appreciated. And then the nft it's driven by
00:18:03
a broader movement and I think, you know, we especially from
00:18:08
like a complex point of view as well.
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Like if we believe in that upside in terms of what the
00:18:13
community could create and what the NST will give access to, we
00:18:17
should definitely be holding those out the fun, like not
00:18:20
investing in them personally if a VC puts like a fancy painting
00:18:25
on their wall to impress founders, They're all B's would
00:18:30
like have exposure to that but it wouldn't.
00:18:34
I don't know. I they're sort of like a split
00:18:36
like obviously having a crypto fund if you think it has to do
00:18:39
with Community. Also presumably helps you get
00:18:42
Investments and like trade ya in crypto world.
00:18:46
So it doesn't mean doing it less like it's not a marketing and we
00:18:50
don't, it's purely. Yeah it's pure Ambassador thing
00:18:52
we do. You can see how much it's like
00:18:59
Dig you out and find you. Another reason why it makes
00:19:01
sense to own, and if he's out of the flood, but yeah, we'll see.
00:19:06
I might be Fielding a lot of LP inquiries on the artwork, the
00:19:19
exit that comes from, you know, owning a 10 ft is essentially
00:19:22
when the fund itself, decides to flip it, right?
00:19:25
I mean, sorry if I'm if I'm ignorant to the other Qualities
00:19:30
of what you get by holding, you know, like a store of value like
00:19:33
that but I don't know. It strikes me as like an odd fit
00:19:36
within a fund not not to pee. I mean everything that's always
00:19:39
said but we are so ugly. Right.
00:19:42
So we view this in the same way like a seed investment, like we
00:19:46
don't know what's going to come as a result of these communities
00:19:49
and if you take board at your club, like, you know, there's IP
00:19:52
and the nft like what will that enable?
00:19:55
What will it give access to in the future?
00:19:59
If you know the nft gives you entry into certain communities,
00:20:02
that others can't be a part of. Like I think that's how we see
00:20:07
the kind of potential upside like what happens if you know
00:20:10
the next decentralize Facebook is that you have to own like the
00:20:14
equivalent of the coin or and then ft to be a part of it like
00:20:18
and you don't have that access. So I think we view it as quite
00:20:22
explore a tree but an important seed strategy to to consider.
00:20:28
Do you feel like The watch prices in real time or you know
00:20:33
normally is a starter investor. You're not really worried about
00:20:36
you know a market or day-to-day prices but holding coins or nft
00:20:41
is like is there a price that they could hit where you're
00:20:45
like? Oh, I should just sell them as
00:20:47
like a fiduciary or you are committed enough.
00:20:50
To hold in them. Long term that you don't really
00:20:52
worry about Isis. Again, we had this discussion
00:20:56
weird long-term investors. I can the same way that, you
00:20:58
know, we Spect our companies to exit in seven, to 10 years, we
00:21:03
will be having the same long-term outlook on anything
00:21:06
that we buy. Now, I think if there is
00:21:09
continued price top or, you know, some things down like a
00:21:13
huge amount and we don't see a long-term just in the same way,
00:21:17
if you don't see an outcome for one of your companies, you might
00:21:20
exit early. So that's obviously a
00:21:22
consideration, but we're certainly not watching price
00:21:24
movements day-to-day, right, right.
00:21:26
I'll piece might be They can see or they know what you hold and
00:21:32
so they can sort of they can exactly, yeah, besides besides
00:21:36
crypto, like what do you what do you think are the big sort of
00:21:40
targets for the fun in terms of sectors you're looking at?
00:21:43
Yeah, absolutely. So we will continue to do a lot
00:21:45
in financial services. So obviously check out Moon pay,
00:21:50
we've done more more to be announced in terms of embedded
00:21:55
Financial Services, with software being the main play.
00:21:59
Yeah, and I think that we'll start to see like a next
00:22:01
generation of consumer fintech as well with crypto kind of
00:22:05
being more of a core Focus there.
00:22:06
So I think we'll continue to spend time in that area and Alex
00:22:10
who you met, who joined us. As I mentioned last year, he's
00:22:13
got a ton of consumer experience, so I'd expect more
00:22:17
exposure there. We haven't had so much in the
00:22:20
past the way that we're set up at Blossom is each partner, has
00:22:23
their own kind of sector, expertise, and deep domain
00:22:25
knowledge. So while we end up looking a bit
00:22:27
more generalist from the outset, We actually individually
00:22:30
individually spend time on just a few core themes.
00:22:34
So the Alex. It's a lot of and gaming
00:22:38
consumer mobile messaging and then we've made a number of
00:22:43
great investments in Enterprise as well, which is led by my
00:22:46
partner in moron. So that's like developer tools
00:22:49
infrastructure open source security, explain to me if you
00:22:53
don't mind. This is just again, my personal
00:22:55
interest in the beat that I cover.
00:22:57
What's going on over there with That with fast delivery.
00:23:00
I mean, all these companies you know keep raising shockingly
00:23:03
large rounds at valuations that are quite impressive or Aya
00:23:08
popping and dubious. I mean, obviously there seems to
00:23:12
be Traction in Europe with these sort of things and you had your
00:23:16
own exit with DJ, what's going on over there?
00:23:20
These days with it it seems like they're all spreading to the US
00:23:22
but I don't know how big that markets going to be for them.
00:23:24
So if that's one thing that's true about Europeans and we Of
00:23:29
food. Okay?
00:23:31
So entrepreneurs loved innovate in food for because it's a very
00:23:35
big own profitable market. So if you look back to the kind
00:23:38
of the history of great outcomes in Europe, we had just eat,
00:23:42
there's like delivery hero, you know, we had a car do back in
00:23:46
the day, then we had to live through it cetera.
00:23:49
So it's a natural evolution of cutting up, you know, the food
00:23:52
market. The last part that hasn't been
00:23:54
innovated in and the fast food, like the 10-minute delivery was
00:23:58
all about. Out looking at one, like the
00:24:00
number of kind of convenience stores in the UK, and Berlin,
00:24:05
and Paris, Etc. But how kind of a lot of energy,
00:24:09
there was a lot of inefficiency in that supply chain and whether
00:24:12
people actually wanted to walk to their convenience store
00:24:14
anymore, it was another factor. And then the concept of the
00:24:18
weekly shop like cardio is like the main player in the UK, so
00:24:23
I'll talk about them. But every week you'll spend
00:24:26
between 70 to 120 pounds, Revival Monday, a lot of that
00:24:31
stuff will probably not be eaten or go off.
00:24:34
You get all these substitutes, like the delivery slots, don't
00:24:36
make sense. So, there's a lot of
00:24:38
inefficiency in the market that these players were attuned to.
00:24:42
And we're trying to capture kind of, some of the margin in that,
00:24:46
but I think that and this is one of the challenges, sometimes at
00:24:49
the European market, you know, you can have players start in
00:24:52
London at the same time players, in Berlin realize the same
00:24:54
opportunity. And before, you know it, you
00:24:56
have 20 players racking the market.
00:24:59
Edit and the one a lot of barriers to entry into this
00:25:02
Market either side. So that's why I think it's
00:25:04
attracted so much attention. Yeah, it also seems like growth
00:25:07
at this point comes less from these companies deciding to set
00:25:11
up shop in a new country but just acquiring the local player
00:25:14
as a way to say we now are in Berlin.
00:25:17
So I imagine from an exit up, you know, from an exit
00:25:19
standpoint, you know at least you know they're not huge but
00:25:21
it's kind of a bonanza. Yeah.
00:25:22
The excess of actually mainly been to the u.s. players.
00:25:25
So you know, the likes of Flink and goo Liz, get here.
00:25:31
Is that DJ Weezy? I mean, they won't but the real
00:25:36
companies are the names are so good.
00:25:38
I mean, it's really yeah, I can tell I can tell you as a
00:25:43
consumer. The experience is unbelievable.
00:25:47
Like I think I ordered like five or six times a week.
00:25:50
Really only Deidre now. Go puff, I'm a very loyal
00:25:54
customer. Oh sure.
00:25:55
Go puff appreciates that they really want your app to work for
00:25:57
them, do you? But I I'm not asking you to
00:25:59
defend their business models, but is there really a necessity
00:26:03
to deliver things in 15 minutes? I mean, it feels like it's like
00:26:06
a need that was just created One Day by companies saying they can
00:26:09
do that. But is there really like this,
00:26:12
been, this clamoring among consumers to get things
00:26:16
delivered and under 20 minutes. So I would agree with you that
00:26:20
the need wasn't there for 10 to 15 minutes, but a bit like, you
00:26:23
know, how now of your Uber takes you six minutes, you'll
00:26:27
frustrated because you're used to the 22-minute arrival and if
00:26:31
the other app is ordered like offering you 10 minutes, are you
00:26:35
going to wait 30 minutes for the other one?
00:26:37
So because they all started to offer that quick you couldn't
00:26:40
move away from that. Yeah.
00:26:42
But so that the really the differentiation is just speed.
00:26:45
It's not really product. It's just a matter of those
00:26:49
differentiation on price. So as you gain more volume and
00:26:54
more pricing power with, who, you're buying from suppliers,
00:26:58
you can often much better prices.
00:27:00
And so, if you compare, for example, and deliver, ooh, Who
00:27:05
offer, you know, say they offer quick groceries.
00:27:08
Actually their prices are pretty exorbitant compared to one of
00:27:12
the other players that I just mentioned because they aren't
00:27:14
set up in the same way like their Riders will go and like,
00:27:18
pack in a supermarket rather than have the dark stores that
00:27:22
they're able to negotiate kind of much better wholesale prices
00:27:25
on, right? But that's also a different
00:27:27
model, right? That's taking it.
00:27:29
On the retailer versus, you know, setting up your own dark
00:27:32
stores, but our do you anticipate then that it just
00:27:35
ends up being, you know, two or three big players that can
00:27:38
acquire the smaller ones and get enough volume, that they have
00:27:41
pricing, power to make it attractive to consumers, or is
00:27:44
it just going to be kind of balkanized you know, just
00:27:47
different countries having their own Regional player?
00:27:50
No I think it does end up with one or two and ultimately I mean
00:27:55
we learn this through Deidre and I think this is why the ACT
00:27:59
position made a lot of sense. It's a war and capital now and
00:28:04
that's how it's going to end. Mmm, can they be profitable?
00:28:07
I think I can, you know, if you look at the pnl of the
00:28:11
supermarket, for sure. Yeah, sure.
00:28:14
But supercars are not all, you know that.
00:28:15
Anyway, that's this is, I don't want to go too far down this
00:28:17
one. I know.
00:28:18
I'm so tired of the delivery story.
00:28:20
I mean, I have you, like I covered it so closely with Uber
00:28:23
and doordash and Postmates and it's like, oh, maybe these ones
00:28:27
will burn a lot of money or got. Well, we're I don't know, I
00:28:30
don't know if the mass public is like on the edge of their seats.
00:28:33
Now we've sort of learned the lesson that like you can spend a
00:28:37
lot of capital sort of building up a business figuring it out.
00:28:41
And, and that the claps, you know, like I mean, Postmates is
00:28:45
a collapse, it sold for three billion dollars, you know what I
00:28:48
mean? It, I don't know, there isn't
00:28:49
really a satisfying and then like the sprigs of the world or
00:28:53
whatever in the US where they do fail.
00:28:56
They never got big enough, that people sort of have an
00:28:58
attachment to the brand. Anyway, this is my analysis of
00:29:02
it as a story and I just think it's the one thing I would say
00:29:06
is that there was overwhelming journalists interest in the
00:29:11
face. Yeah, just suggest.
00:29:13
Yeah, I mean the consumers haven't really tired of it.
00:29:16
Yeah, I mean, right number of times that you know it spoke to
00:29:19
Ft or Bloomberg and they're covering all of these Pac-Man.
00:29:22
Oh yeah. Its food its concrete.
00:29:26
I mean, You know, it's something.
00:29:27
They feel like a general and ie older audience might be
00:29:30
interested in. But, you know, I, I don't know.
00:29:33
It's difficult as a story because there are some
00:29:36
interesting characters, you know, and you looked like the
00:29:38
CEOs of gorillas and even go puff in the u.s., you know, it's
00:29:42
kind of fun Back stories but I don't know.
00:29:45
There's an expectation among some reporters of an implosion
00:29:49
like truly awful outcomes for some companies or selling, you
00:29:53
know, just by, you know, the shirt off their back and I I
00:29:57
don't, I think we may be disappointed by that.
00:29:59
I think it may just end up being sensible exits, but the one
00:30:02
player in the, you know, the players in the field that
00:30:04
weren't able to raise as large around as the others.
00:30:07
Anyway, I want to, I want to go to Robin Hood.
00:30:10
And can you tell us? I mean, clearly, that's been an
00:30:13
important company sort of in your story, is a venture
00:30:17
capitalist. How did you first?
00:30:19
Meet the Robin Hood co-founders, write and tell us the story and
00:30:24
yeah, absolutely. Yeah, the first meeting was
00:30:28
actually unzoom on a Google me and they pitched me and a
00:30:32
partner that I was working with at the time index.
00:30:36
And this story, I mean they literally take you back to like,
00:30:39
08 on how they told their girlfriends when they were at
00:30:41
Stanford, that they were going to disrupt E-Trade and own and
00:30:46
they had this. So when they start when we
00:30:49
invested and actually for the first couple of years, they
00:30:52
didn't yet have The Brokerage license.
00:30:54
So they needed to raise enough capital Which was like four
00:30:56
million dollars to apply for The Brokerage license.
00:30:59
And in the meantime, they had built an app for sharing stock,
00:31:02
trading ideas, and that was really beautifully designed, so
00:31:06
they had like a unique design philosophy, which obviously, you
00:31:10
can see, now that has played out in the app and the engagement
00:31:13
rates for this app, like 55%, like daily active to monthly
00:31:16
active, which no is incredible for financial services app.
00:31:22
And they had this date beautiful.
00:31:24
Mix of like, very clear business.
00:31:26
Command and like product little index.
00:31:28
So did in Acts invest again when they went brokerage or yes, who
00:31:32
we actually were trying to consider whether to invest in
00:31:35
this kind of rolling seed that done.
00:31:38
Hmm. And the partner that I was
00:31:40
working with was as a Yan Hammer incredible vintag investor and
00:31:48
it was August 2013 and he was going to park it, until they got
00:31:52
the brokerage license and I was like, absolutely not like we
00:31:56
It'd be investing and I went, I went through out to San
00:31:59
Francisco when I should have been on holiday at.
00:32:01
Yeah, I actually went on holiday and I was being a dutiful
00:32:04
associate or went out to sound fan.
00:32:07
I went out for dinner with Vlad and Bayview at some Korean
00:32:10
restaurant. And negotiated the, the seed at
00:32:13
that appointment invested 500k. Buy a convertible notes.
00:32:18
And again, then we were almost going to delay.
00:32:21
It slightly more because there were complications.
00:32:23
The company was an LLC. There were going to be tapped
00:32:26
Locations and times of pass back to our investors but we managed
00:32:29
to convince them to keep the 500k fast until they converted
00:32:32
to B Corp. And then we doubled down in.
00:32:38
I think it was June 2014. We LED their series a hmm.
00:32:42
And we thought that the valuation at the time was I
00:32:46
asked namakkal for, you know, they just had the waitlist, they
00:32:49
haven't even launched yet and we're pretty convinced that a
00:32:51
lot of those people on the wait list will probably be glad in
00:32:54
plate being his friends. But they've done a good job and
00:32:58
so yeah, we let their series a web.
00:33:00
It came in for us one about alongside us and I mean, just
00:33:04
the growth and the execution was absolutely outstanding.
00:33:08
It would even work in Europe, right?
00:33:10
Or there are sort of regulatory so it depends on the country.
00:33:14
Like right now you have trades and I love to talk about Europe
00:33:17
as a place. It's like, I've been there a
00:33:22
couple times, you get it. It does depend on the countries
00:33:28
to trade Republic and Germany. They follow the same model
00:33:31
payment for order flow which works it doesn't work in the UK
00:33:35
and so Robin Hood considered launching Europe for a while and
00:33:39
actually had people on the ground in the UK but couldn't
00:33:42
get the same business model to work.
00:33:44
There's a lot of talk like there is in the u.s. at that's going
00:33:46
to end in Germany too. But yeah, it's not as it's not
00:33:50
exactly the same in every country are there particular
00:33:53
areas outside of crypto, That you're excited about or at this
00:33:58
point. You think when we say fintech
00:34:00
most of the investing you're going to do will have a crypto
00:34:03
element to it. No I think there's still a lot
00:34:07
of opportunity in fear as well. No B2B payments has a vast
00:34:14
market like bigger than because human payments that hasn't been
00:34:18
hasn't seen so much Innovation over the last couple of years or
00:34:22
few years. So excited about that area.
00:34:24
I think there's a Big Trend towards removing the need for a
00:34:29
bank, like you should be able to buy Financial products like you
00:34:33
do software. And I think we're going to see
00:34:35
that shift over the next couple of years.
00:34:37
I think there's no more to do and lending as you get more
00:34:41
data, you'll get better underwriting etcetera.
00:34:44
So, I think that it's not just about crypto for sure.
00:34:47
There's always the hard question to ask, but like what's your
00:34:50
philosophy on price? I mean, people are constantly
00:34:54
trying to assess right now whether The prices are going to
00:34:56
come back down. I think there was like a Reuters
00:34:59
piece that was sort of saying maybe it will.
00:35:00
But then I think by far the conventional wisdom is that you
00:35:04
know I Miro I think raised its 17 billion fairly really like
00:35:08
it's everything remains pretty eye-popping.
00:35:13
I don't know you know and then we think about the moon pay
00:35:16
example. You know, that was obviously a
00:35:18
huge round but then you talk about getting a convertible
00:35:21
before. How do you think about sort of
00:35:25
maintaining price Discipline is a fairly new fund when you sort
00:35:29
of have to pay the market prices or what sort of your philosophy
00:35:33
on pricing right now. Yeah, also be and I think this
00:35:36
is determined actually everything about how we think
00:35:39
about the fund. How many companies we invest
00:35:41
into portfolio construction, you know how much we invest into
00:35:46
each company. We believe there are only going
00:35:49
to be a finite number of outcomes that are going to be
00:35:52
built in Europe, each year that are going to really matter.
00:35:56
And we want to be partners to those companies no matter what.
00:35:59
So, you know, sometimes you might find those Founders early
00:36:03
and their need of capital is not as much as if we'd found them 12
00:36:08
months later and I say need a capitalized and how much do they
00:36:10
need to scale from this point for the next 24 months and we
00:36:14
always find our companies for 24 months and then it comes down
00:36:19
to, okay? We're going to, you know, we
00:36:21
only make five to six Investments a year.
00:36:23
We think that's kind of the number of outcomes.
00:36:25
And that's the Of teams that we can really give the best
00:36:28
bandwidth and support to as a partnership as a, what makes
00:36:33
sense from kind of our ownership perspective, if we're going to
00:36:35
dedicate that much time and they going to be one of, you know, 15
00:36:39
companies and a portfolio. So that's how we kind of arrived
00:36:43
at Price. Like, we always find if we're
00:36:45
debating on the margin, whether we should pay 40 million for a
00:36:49
company or 50 million cut for a company.
00:36:51
We're not actually debating the merits of partnering with a team
00:36:55
like would debate. The want to translate this out
00:36:57
of VC. Speak you'll pay whatever price
00:37:00
as long as they call it a series.
00:37:01
A and even then I think there are exceptions.
00:37:04
Yeah. And it's a growth investor wants
00:37:08
to pay an astronomical price for our company after us here, then
00:37:14
the rules. Go out the window I mean, in
00:37:16
terms of country, I mean I know it's sort of you think of it as
00:37:20
sort of Continental sort of strategy but like what are
00:37:25
somebody I know you need to write about France, like Frances
00:37:28
really hot right now. There's a constant sort of where
00:37:30
is the energy at the moment, but yeah, what is sort of
00:37:34
interesting on it on a country level right now.
00:37:37
Yeah, so the cool hubs have always been London, Paris
00:37:40
Berlin. And then to lesser extent like
00:37:43
Amsterdam and Stockholm. I'd say not listed well.
00:37:48
No, not so much. There's a lot of people in this
00:37:51
but sorry web Summit. I can ask you about them later.
00:37:55
I've questions. Yes but then the really
00:37:57
fascinating thing about Europe and this is why we're on the
00:37:59
road so much is like okay so for like fifty percent of the series
00:38:03
A's will happen in those Hub cities but then we have
00:38:06
companies in Dublin and tarlyn and Warsaw I could small town in
00:38:11
Switzerland called sink Garland like entrepreneurs are literally
00:38:14
building everywhere and you know then these aren't on the ground
00:38:19
in those cities like every two weeks.
00:38:22
So is activity all over Europe. You're in Geneva right now.
00:38:25
That's it. I said, before we got exactly.
00:38:28
Yeah. Are you company hunting or is
00:38:29
that with an LP always company. I said, I've just given away my
00:38:34
location, dude, but no sound. I know that's like a state
00:38:38
secret in Europe like which because then then people in the
00:38:41
know try and back out with Deanna, my husband is actually
00:38:45
banned because you have obviously a lot of friends in
00:38:47
tag. He's banned from telling people
00:38:49
where I am. Oh my god!
00:38:52
Wow! It moves that quickly, the
00:38:54
hospital This episode, is it coming out till next Tuesday or
00:38:58
something? So, Geneva baby over by this
00:39:00
sign the deal before you leave. Yeah, my only last question and
00:39:04
this is my limited exposure to European Tech.
00:39:06
But I mentioned briefly earlier was web Summit, which I always
00:39:09
felt, was this, you know, giant advertising very State, you
00:39:14
know, subsidized advertising effort for European Tech.
00:39:18
I went once in 2016, I found it to be a rather chaotic and
00:39:22
somewhat traumatic experience that I brought up on the show
00:39:25
before. Or what's your sense of?
00:39:28
How the, how much that fits into the the kind of PR push for
00:39:33
European venture capital and, and the startup community.
00:39:37
So it's probably tripled in size now.
00:39:39
Oh, my God, the last kind of was like, 20 Founders.
00:39:42
And there's been last year saying it's insane.
00:39:45
Is it the biggest European Tech conference, or what are the cons
00:39:50
couldn't? There could not be a larger one
00:39:51
that the, the one that I love which is the At the end of last
00:39:56
year, / in Helsinki and that one's really well.
00:39:59
Attended not 20 Founders. But and last year, a lot of us
00:40:04
visas. He's fluent for it.
00:40:06
I think L could supercell really put that one on the map.
00:40:09
After the supercell except it really throws a great party
00:40:12
every year, but web Summit is a great marketing machine
00:40:15
generally for European Tech. Yeah, that's true.
00:40:19
Yeah, they certainly fly out a lot of us journalists to
00:40:23
moderate panels on it and they put us up in very nice hotel.
00:40:26
Also it's will manage as far as that goes, but total chaos.
00:40:30
And the fact that it's tripled in size is kind of incredible to
00:40:34
me. Do you go much?
00:40:35
I mean, have you gone in the this probably you know, caught a
00:40:38
strong correlation between investment in European Venture
00:40:42
and number c deals in the size of website.
00:40:45
Yeah. Wow.
00:40:47
I need to go to some, I've never been.
00:40:48
I'm sure they'll have you Eric. It's a real show.
00:40:51
It's, I mean, they put, you know, the, the main event takes
00:40:55
Place in like, the largest stadium in Lisbon.
00:40:58
It's like doing, you know, like a panel interview.
00:41:01
I'd like, you know, a Coliseum essentially.
00:41:04
And then they have this, like week-long, like Coda to it
00:41:10
called Founders Summit or something like that.
00:41:12
Where have you attended that? Yeah, philia.
00:41:15
Yeah, yeah. It's like a week-long thing
00:41:17
where all the founders get to hang out and even nicer hotels
00:41:21
and and journalists sort of like slum along there.
00:41:24
No one really wants to talk to us.
00:41:26
But it's I've founders of told me they find Value in it getting
00:41:29
too short of a share experiences with others.
00:41:32
And in that setting, I mean the the ingenious thing that Patty
00:41:37
did is he took like the the two-day conference and then
00:41:40
started adding all these side conferences where he realized
00:41:43
that he get people to pay for more things.
00:41:45
So you had the two days and then there were suddenly like an
00:41:48
investor matchmaking day where Founders could pay extra to meet
00:41:52
these and then these could meet LP.
00:41:55
So let's have that help. Be factored and then let's have
00:41:57
like the premium conference its Founders.
00:42:00
Well you know it's a seven-day Bonanza right.
00:42:03
He is right, it never stops and and it's so fiercely backed by
00:42:08
the Portuguese government. I mean the amount of red carpet
00:42:11
roll out that they do hosting a lot of these parties and like
00:42:14
700 year old castles and government institutions.
00:42:17
It's it's truly something. I mean, yeah, and a remarkable
00:42:21
achievement of coordination and yeah, favorite rating That
00:42:26
different from what the governor of Miami is doing with the
00:42:29
crypto crap. I can't tell us what the Miami
00:42:31
government is doing all that much, or not very much at all
00:42:34
right. It seems like all he has to do
00:42:35
is like the mayor, like tweet out something vaguely, you know,
00:42:39
affirmative things. Yeah, just sort of say, like,
00:42:42
oh, I'm gonna take my salary in Bitcoin or, you know, how can I
00:42:46
help. And that is enough to like, when
00:42:48
these people over, I found many Tech, buy a cheap dates but
00:42:52
maybe there's more to it that I haven't seen cool.
00:42:55
Well, thank you so much for coming on the show.
00:42:59
I really enjoyed it. Thanks so much philia.
00:43:00
This is great. Thank you,
00:43:14
goodbye. Goodbye, goodbye, goodbye,
00:43:17
goodbye. Goodbye.
00:42:55
Well, thank you so much for coming on the show.
00:42:59
I really enjoyed it. Thanks so much philia.
00:43:00
This is great. Thank you,
00:43:14
goodbye. Goodbye, goodbye, goodbye,
00:43:17
goodbye. Goodbye.