Leading VCs discuss the future of innovation in a post COVID-19 world in new webinar series

by Startacus Admin

Thoughts, advice and perspectives shared by leading VC investors discussing the future of innovation in a post COVID-19 world...

Days after the announcement of UK’s Future Fund, a few of the most prominent VC investors in Europe and the US came together to share perspectives on the current market, the innovations to watch and to give advice to founders in a new online “Ecosystem” series.

The panel found big regional differences in the way funds have responded to the new reality, resulting from COVID-19 lockdown. At a European level, the speakers confirmed their firms continue to look for new investment opportunities.

“The impact of the crisis on our pace is not on whether we freeze the process or continue as it was. We take into consideration the additional amount of dry powder of the fund to be allocated to existing portfolio companies to weather the storm as the “COVID Virus reserves” to determine the euros left for new investments. –

says Jean-Marc Patouillaud, Managing Partner at Partech, a global investment platform for tech and digital companies, led by ex-entrepreneurs and operators of the industry spread across offices in San Francisco, Paris, Berlin and Dakar.

“The top notch founders will still get their funding. It will however be much more difficult for second-tier founders who would have got funded two months ago when there was a total hype.“

– adds Heinrich Gröller, a partner at Speedinvest, an early-stage venture capital fund with more than €400m to invest in visionary tech startups across Europe.

The situation in the US differs.

“Everyone is busy triaging their portfolio. I think there will be a lot of slowdown and a lot less deals to be done in Q2 and Q3 2020. Even though a lot of deals are announced right now, almost all of them were done in the last 3 to 6 months.

– suggests Marvin Liao, an angel investor and a former partner at 500 Startups, a global seed venture capital firm and startup accelerator based in Silicon Valley.

Creative and resilient founders manage to turn a crisis into an opportunity. Sectors where COVID-19 has sped up the recognition of the need for innovation include gaming, edtech, healthtech and logistics tech.

Partech started investing in health tech about 3 years ago and 12-15% of its existing portfolio companies are in this vertical. It is a sector to watch due to the increased budgets for public health at a global scale, the recognised need to improve individuals’ access to medicine and the opportunity to improve the patient journey.

On behaviour shifts, Megan Reynolds, an investor at Crane VC, a $90M fund focused on European Enterprise Software and Deep-Tech investments pre-Series A, says spend on mission critical software (e.g. cyber, automation, IT infrastructure) will likely be resilient, if not increased.

While countries across the globe have introduced new public funding schemes, the support may not reach entrepreneurs in time. Investors stress bureaucracy, a lack of clear eligibility criteria and slow response time in allocating resources as areas of concern.

“The allocation is way too slow and the bureaucracy is way too high. Time is of essence, given some start-ups have lost nearly 100% turnover in a second. – says Heinrich.

“It’s a great first step but until we know more about the UK’s Future Fund and the exact eligibility of companies, we are not factoring it into our plans.” -adds Megan.

The number one tip for founders though is to ensure they have sufficient runway and are able to manage cash flow efficiently.

“Prepare for a different 2021 than the one in mind. The crisis will leave scars and everything will have to be re-forecasted because the situation will not go back to normal in all verticals. With the exception of e-commerce and marketplaces.” – adds Jean-Marc.

He continues: “On the other hand, people will view the planet differently. Their sedentary and rather resilient experience will have a negative impact on business travels and a positive one on simple facts of life, a more sustainable behaviour with regards to energy, leisure and food.”

In challenging times, collaboration in the wider tech ecosystem is paramount in order to support future innovation. This is the inspiration behind Tzvete Doncheva's “Ecosystem” webinar series - an opportunity for founders, corporations, investors and public sector actors to connect and learn from each other in the age of social distancing.

The webinar also featured two special guests - Chia Jeng Yang (Principal, Saison Capital and Co-Founder, Shaper Impact Capital) who offered insights on the recent developments in the tech ecosystem in Asia and Kinga Stanislawska ( Managing Partner, Experior Venture Fund and a member of the European Innovation Council Advisory Board) who shared more on how the EIC is supporting innovation just prior to the launch of the #EUvsVirus Hackathon.

We look forward to the next “Ecosystem” series webinar organised by Tzvete Doncheva.

 

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Published on: 27th April 2020