The search for defensible investments is on. This explains why VCs are flocking to regulated industries such as financial services (N26) or healthcare (Ada Digital Health). Another barrier to entry is access to unique data sources, which are the proprietary “fuel” for AI. Stephan Uhrenbacher, one of the few European members of the Toronto-based mentoring program Creative Destruction Lab (CDL) focuses on unique access to data when evaluating companies. Most VCs would agree. Take Fly Ventures’ recent investment in Scape Technologies, which measures cities and provides mapping data at previously unattainable accuracy.
This shift of investors into more defensible plays must also mean an opportunity. We currently see smart family offices and corporate investors taking advantage of the gap left by VCs. They are joining up with media for equity investors like us to support excellent entrepreneurial teams who happen to be engaged in less defensible areas. Seven Ventures invested in Veluvia, a superfood startup backed by German TV personalities. In December 2018, German Media Pool and a group of family offices and angels invested in LemsonSwan and the experienced team around Arne Kahlke, the former Founder of Elite Partner and CEO of Parship. It is difficult to imagine any CEO more experienced in the dating space. The best-known example for savvy corporate engagement probably is ABOUT YOU, the newly minted unicorn of the Otto Group and Bestseller, backed with media provided by both Seven Ventures and us.
It is good to see that entrepreneurship is not stopping in areas which some VCs are slowly retreating from. There is still a huge amount of value which can be created in consumer segments which are not easily defensible.
By Niko Waesche (@cafelido), Berlin, 27. January 2019.