Scaling Europe
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.
00:19:27 · Sebastian Johnson
[00:19:27] S0: And that increased level of competition, we're seeing a lot more, a lot more larger funds across Europe with more money. We're seeing a lot more increased presence of US investors across the continent. How does that change the job? You know? Does that mean you've gotta move quicker? You know? That's that's always what I hear is that American investors move a lot quicker. Do you find that to be true again to match their speed? Is it becoming harder to win allocation to win deals?
00:19:52 · Raffi Kamber
[00:19:52] S1: That's not exactly the way we approach the problem. I think the situations where you need to be faster than American funds and, it's a bidding war and all these things, it's the moment deals become consensus especially. It is obvious deals in the market. They raise larger rounds. It's... It becomes pricier. It's not exactly the the type of situations we're we're exploring in majority. The types of situations we we we're exploring a lot is before they become consensus. So we obviously have great American investors and investors from other nationalities that get interested into these companies. I think we we have to build the conviction faster and differently compared to the rest of the market. If we want to continue assembling a portfolio of companies we work with, that is different and that makes sense. And that's what we've been doing in the past five, six years. We have amazing... It's it's extremely respectable companies that we're fighting. Right? The intellectual capital and the human capital is just amazing there. If we were just a $400,000,000 fund trying to fight a $5,000,000,000 platform, I mean, we can win, but it's not exactly the same weapons we're using. Right? So we will have these types of situations and we we will win. We we actually win quite a lot in these situations. But the realities of what we're doing is that we're... We have forged ourselves an identity for finding interesting things slightly earlier, slightly differently, different industries, and you... That's the portfolio you see today, which is very different from what you would see in in other funds, I guess.