Venture Europe: Entrepreneurship | Technology | Venture Capital | Eu/Acc
00:07:19 · Calin Fabri
[00:07:19] S0: And also walk me through, so in an entrepreneur's life, you kind of found the company, you go like through the first one year or two years hopefully find product market fit or iterate long enough to find product market fit, then you kind of scale and then you kind of exit. Take me to that room just before you guys sold to Higlo. As an entrepreneur, like, what was the discussion about? Like, did you guys say, like, we don't believe that we can scale this further? Did you get just bored? You know? Like, hey. Let's do something else. Do you remember the moment?
00:07:55 · Chaz Englander, Calin Fabri
[00:07:55] S1: Yeah. And two really different stories in some respect. Right? Because our second business was, like, much faster. The numbers were so much bigger by way of kind of exit value and like how much money everyone was going to make and so on. Were just like vastly different. I think with that business, we realized that it wasn't going to be a five or a ten year journey. This was like a fifteen and a twenty year journey that really was not going to be sped up in a venture backed scenario. And that's quite an important detail, right? We realized that money was only going to speed that type of business up so quick. And it was really at that point that we knew and we could sit down and say, Hey, look, we found a we've got an acquirer here. You know, they're interested in taking this for ten, fifteen years, you know, the price feels fair and right. Does that make sense for ourselves and our shareholders? And did in that moment of time. But it's tough, right? I think like, you know, as entrepreneurs, you got to make big bold decisions quickly and live with kind of no regret. But I think in hindsight, it was that particular decision was a great decision for really everyone at the table. [00:09:16] S0: And how long did it take until you kind of sold Fat Lama to Higlo and then for the idea which model ML to form?
00:09:16 · Calin Fabri, Chaz Englander
[00:09:16] S0: And how long did it take until you kind of sold Fat Lama to Higlo and then for the idea which model ML to form? [00:09:27] S1: So, just between Fat Lama, we built a business called Fancy that ended up getting sold to Go Path. That was like super lucky, you know, at the end of the day, it was being run by Arnes, my brother. It was a lost mile grocery delivery business four months pre COVID, right? I think if you could have started any business at any moment in time, you would have started like that business at that moment in that location. Right? Unlike Fat Lama, we launched that business, you know, four weeks of writing code and boom, straight line up, like instant product market fit, instant pull, referrals got going. It's just like business was just absolutely flying. Then COVID hit, and it was like literally throwing fuel on the fire. This thing went straight line up, live in 15 cities over a four or five month period. Even looking back on that, this is a vertically integrated business, right? So there's three apps here. There's a consumer app, there's the ride app, there's the warehouse app. You're buying the goods, you're holding the goods in a warehouse. To scale that business as quickly as we did operationally, even looking back on it was like mind bending. We were out raising $100,000,000 round and then subsequently ended up selling it to GoPath after they raised $1,000,000,000 led by SoftBank.
00:10:49 · Calin Fabri
[00:10:49] S0: Got it. When you tackle an idea, I understand that maybe you and your brother kind of influence each other and you kind of help each other. How do you go about an idea? When does it form in your head? And then maybe you can take me to the moment where you're like, Hey, let's create Model ML.
00:11:14 · Chaz Englander
[00:11:14] S1: Arnd stayed on at Go Path in engineering for a few years. I ended up spending a lot of our time. We pulled a bunch of our money together and we were kind of investing ourselves and you can see where this goes as a model ML was kind of born out of this. But during that process, for me personally, I was working on my idea after idea. We'd hired a few people to work on the investing side, but I was just working on my ideas. And I'd constantly be pitching these things to Arles. Right? I was like, okay. This is it. Let's go. And he would be like, nah. And then that... Because, I mean, also, I should say, like, coming out of that sort of process, like, any any m and a process, frankly, regardless of size, you know, it's like grueling. You think it's like a three month period, it's more like a nine month period, and it's like every waking hour, you're sleeping next to your laptop, you know, particularly if there's like, you know, folks in different time zones, it's like it's grueling. We really thought hard and then eventually we were spending time building software to improve our own day to day, so basically to improve the way that we were investing ourselves. But we didn't really think. It was weird. I was brainstorming ideas, also working in software. Then suddenly, it kind of came to us where we'd met people through private investment that were like, hey, this is really good. We want this. And then it was so clear to Arne and I, this clearly should be a product. And had a couple of conversations, people wanted it. This was like 2024 and then ended up spending out and raising about $100,000,000 across a couple of rounds last year. But it was like instant pull, like it was clear the market wanted something that we'd ultimately built for ourselves. So in that respect, there was no need to debate it. It was so obvious, I think, at the time.
00:13:01 · Calin Fabri
[00:13:01] S0: And what were like the two, three features that you guys kind of start with? And also, I'm a banker and I work on a couple of transactions and like in my head there's just no way that an AI banker will not exist in two, three years. There's just like no way. Because if you think about like all the you just have to prepare all the documentations, you have to connect with several sources, you have to take the financial models, you have to talk about the market, you have to create a whole storyline and the narrative, then you have an investor list, you have to reach out to them. The whole like, you know, let's say the sales process is just like I remember like with one client, it's just like I asked Gemini to do a report about, I don't know, like an insurance brokerage market and it did in five minutes what an analyst did actually in three, four days. And this is like with updated numbers and everything. I was like, nah, like an AI banker in the next two, three years. And also I think like now you have like the biggest wealth transfer in history where most of the companies don't get sold because you don't have M and A advisors, right? So it's definitely a huge... But I kind of wonder what was the first feature where you kind of showed to someone and was like, yes, I definitely want that. Because I would assume that since then you kind of expanded horizontally to kind of...