Scaling Europe
00:11:55 · Raffi Kamber
[00:11:55] S1: Yeah. So I think if you if you look at the types of investments we we've been making in the in the past, like, fifteen years even before, Singular, we we like this idea of being non consensus. It's the way the industry has worked for a very long time and we we we want to keep that. And and Vibe is ad tech. Not not a lot of investors were looking at ad tech two, three years ago. And we led the A at what we thought was a tipping point for being able to to serve video advertising at scale on the networks in The US especially. We've known the founders for over ten years actually. It it helps a bit for for for building the relationship. The the the thing is that it's become the dominant player very quickly. It's phenomenal unit economics for such a business. That's why you see the capital efficiency as well. And it's it's it's been noticed. There's been quite a few approaches for what they do. Ended up being acquired by Walmart during the summer for a billion 4, which is obviously a great adventure, first of all, for the founders and and everyone around the table. And for us, Singular, you know, we're we're five, six years into the Singular adventure, being able to have a large exit, allows us to to repay half of the fund in year four. It's just, one of one of the strong signals of what we're doing to our investors and to to the ecosystem. So it's it's it's just, it's just an amazing event, actually.
00:13:27 · Sebastian Johnson, Raffi Kamber
[00:13:27] S0: And what did it mean to you, you know, at at... Jeremy, you know, having started your own firm not that long ago. Right? And you've raised two great funds. Like, what does it mean to have, like, a a big early successful exit at this point in the journey? [00:13:42] S1: I think it's one of the evidences of the the methodology we're using. As as I said, it's nonconsensus investing, and people are looking for signals of what's happening in the reality of the portfolio. Right? And having an exit is one of the signals, one of the strong signals. It's relatively rare in European venture to be able to return such a large chunk of the fund early in the in the life cycle. So, I mean, it's one of the signals that confirms that what we're doing is delivering. So I think it's been it's been it's been a great event for for everyone. You know? Surprisingly, investors like to see their money coming back as well. And it's it's it's allowing us to great to have a great momentum across, everything we do. [00:14:28] S0: And are you starting to think about a third fund? Is it too early? And and how important is this exit gonna be in shaping that conversation when the time comes?
00:14:28 · Sebastian Johnson, Raffi Kamber
[00:14:28] S0: And are you starting to think about a third fund? Is it too early? And and how important is this exit gonna be in shaping that conversation when the time comes? [00:14:37] S1: I think it's an important one. Again, they call us emerging managers, but we've been out there for fifteen years. It it... It's still it's still... Well, it's probably the oldest emerging manager in the market right now. But the the thing is that it's natural for investors to try to look for fact based evidence of the thesis we're defending. Our thesis is that we can have a non consensus approach to investing in Europe. We can explore very diverse networks, very diverse types of companies. I think they see it. You you you probably have heard of some of the companies we work with, whether it's Aikido or Topology or Spore Bio. It's it's gonna be diverse in what we do. And at some point having a strong signal as a private buyer valuing an asset the way Walmart has valued this asset is just an additional signal that the thesis is right. We're still in year five, six of building the firm, right? So we are thinking of Fund three as a continuation of what we've been doing across the past years. You shouldn't expect us to completely change the strategy or the way we work. We like the... This idea of having a concentrated team with strong opinions, being relatively low volume in the investments we do, but super high conviction. And we're gonna keep doing that.
00:15:56 · Sebastian Johnson
[00:15:56] S0: That's amazing. You know, I guess the the... My understanding, the broad strategy of the firm has been, you know, reasonably early stage seed, probably, you know, to series b. And to your point, of... I wouldn't... Generalist doesn't quite sound right, but, like, open to to different industries and different categories. Yeah. Do you see that changing as the world changes? And, you know, even if the... Even if you still wanna stay sort of generalist and high conviction, can you see in which you, you know, you invest more in one type of industry just as the market changes?
00:16:26 · Raffi Kamber
[00:16:26] S1: No. We're very opportunistic in the sense that we we have areas of interest, of course. AI and science is one. Infrastructure, dev tools, cybersecurity is another one where where Henry, who joined us a couple of years ago, is doing a tremendous job. The thing is that we like the idea of finding the founders that are thinking of a specific industry, and we've become good at convincing them to work with us because we can make sense in their story. I'm not sure we're of this category that has a top 10 thesis of how the future should look like. We have our ideas, we have our convictions, but we like to explore our networks of founders that are sometimes very creative and innovative for tackling industries we would never have thought of. So it's reflected in the portfolio you see. We will continue investing in AI and science for sure because we think it's one of the strengths of Europe. And apart from that, we're very opportunistic. I think it's one of the valuable aspects of the job we do to be able to go non consensus, to find topics and founders before everybody thinks it makes sense, and to help them, make it valuable ideas and companies. That's the that's the pleasure of the job, first of all. This exploration is is really the fascinating part of the job. And that's also where we think we can find an identity as investors. The portfolio you see, doesn't overlap with a lot of our peers in Europe. It doesn't mean that we we mutually don't like what we do. It's just that we have a a way of partnering with the founders, is very specific, and it it just makes the identity of Singular a certain way.
00:18:09 · Sebastian Johnson, Raffi Kamber
[00:18:09] S0: And, you know, you've been on the show now, I guess, five or six years, doing your own thing, running your own firm. What's that experience been like? How does that compare to kind of doing venture in a different world in a in a different way? [00:18:21] S1: I think the the the main difference, we we had a lot of freedom in what we were doing before, so I... I'm not sure it's coming from there. But the main difference is that the the market has matured extremely quickly between what we were doing ten years ago and what we're doing now. Is one of the thesis behind Singular. When we started it, Europe was coming to maturity. There's been a tipping point between 2015 and 2020 as to the quality of the tech ecosystem, the time density, the distribution across Europe. All these things have compounded all at once. And we we we started Singular thinking there was a pretty exciting space that we could address and and hopefully some value we could bring to to the founders. The thing is that right now, it's an extremely competitive market compared to what it was ten years ago, and that's the main difference. The founders have access to any type of funding, any type of investor at a global scale. So the game for us is to to be able to be benchmarked against the best funds in London or in The US because that's the market standards by now. And that's what's what's turning us on. Basically, it's it's the cool part of the... Of building.