The future’s so bright I’ve gotta wear shades.
It’s been often commented lately that ChatGPT and Bard and AI in general will render us all useless and redundant. Perhaps, in some dystopian future that might be true, but I’m sensing that we’re some way off and being optimistic, to paraphrase Timbuck 3, “the future’s so bright, I’ve gotta wear shades”. Being serious for a moment, the truth is AI won’t take our jobs, but someone who really know’s how to use AI might.
This is the story about Carmoola’s journey from launch to Series A in only 10 months…
Carmoola launched on the 1st of April 2022. Bringing consumers a cheaper, easier and faster way to finance a used car. And wow, it feels like a lifetime ago. So much has been achieved in less than 10 months. Multiple funding rounds, massive technology build out and thousands of happy customers! All with a very small team of driven, hard working and incredible people.
What have been your biggest learnings whilst being a Board member/observer at Toqio, Zift, Phrasee, Solidatus, and Clear Review?
My experience from over 20 years of investing at Series A and partnering with founders is that almost every successful company goes through a period when things don’t go to plan. This makes the clarity and alignment of objectives absolutely paramount. Firstly, the exec team and investors should spend time agreeing what the key strategic objectives are, what the short and medium term targets are to achieve these objectives, agree how to measure progress and assign clear responsibilities. We do this every time we back a new company, in a systematic way. Then the investors need to make sure they speak with a unified voice. How they achieve that depends on the size of the investor syndicate, but founders should not have to deal with disparate investor priorities. Another key lesson is that founders should not waste time in building a high calibre C level team as soon as they take on investment. It takes time to find the right people, bring them on board and allow them time to make a material contribution. In the context of a 24 month period between funding rounds, there really isn’t time to waste. Lastly, we operate in fast moving markets and those who win embrace agility and speed of execution and we overindex on founders with these qualities.
What were your biggest learnings whilst working at Goldman Sachs and subsequently driving FirstMinute’s work into South Africa, Nigeria, Pakistan, and Egypt?
At Goldman Sachs, I worked in the Financial Institutions M&A Group working on transactions for Banks, Insurance and Payments Companies. I’ve always been fascinated by the plumbing of the Global Economy! At firstminute I’ve spent a lot of time looking at the startups trying to modernise this system – both traditional fintechs and crypto infrastructure companies. What’s so exciting about Emerging Markets is how much white space there is to build critical infrastructure in financial services and the value capture for companies as these regions move from cash to digital. The talent in these regions is amazing and Covid really changed the fundraising dynamic as meetings shifted online.
What were your biggest learnings as a founder?
Being a founder is an ongoing learning experience. You make so many smaller and bigger mistakes. You learn from them, adapt and move on. If you only see the media it is easy to believe that you are the only one where its not smooth sailing towards unicorn status. That is why it is crucial to have a network of fellow founders. You will quickly find out that everybody has their own set of struggles behind the scenes. They also understand what you are going through, how lonely it can be and will give you honest advice based on their experience without any hidden agenda.
What inspired you to become a VC and was there a ‘lightbulb’ moment?
As the founder of a bootstrapped company, and an early employee twice over (most recently at Airtable, where I built our first growth team and led partnerships), I get my energy from the messy, early stages of company building. After I left Airtable, I assumed I’d take a few weeks to catch my breath and then get back to building. But I was really drawn to what Gil Dibner had built over at Angular Ventures for one major reason…Angular invests early.
What were your biggest learnings as Partner at SURFnCode,Board Member at Hadean,Co Founder of Luminous Ventures and Mentor at Entrepreneur First?
I think the biggest takeaway throughout my tech career is that this sector (no matter whether you are a founder or VC) is not easy. For me, it’s all about the quality of the founder – rather than the idea – to increase the odds of outlier success (or big bang failure).
What were your biggest learnings at Citigroup and DailyInternship?
I would define my Investment Banking and entrepreneurial experiences as complementary. One could expect that the biggest learning from a banking experience would be related to modelling / financial analysis but personally I have learnt how to perform under pressure and prioritise tasks while covering a variety of business models and sub-sectors. On the other hand my experience as entrepreneur was substantially valuable, particularly in the context of my current role as a VC investor, to appreciate that (i) it’s okay to make mistakes: embrace them as a chance to grow and learn and (ii) you can’t be everywhere: the single most important thing you can do as an entrepreneur is to hire the right team and give them space to execute.
What inspired you to become a VC investor and was there a ‘lightbulb’ moment?
Ever since I was a child, I have been fascinated by the positive impact that tech can have on the world. I was initially more focused on the consumer side (e.g. When I was 13 I remember asking a few restaurants in my city to set up a website to help facilitate online deliveries) but over the years I realised that technology can improve not only our personal lives, but also companies’ performance and have an impact on the whole society. I am an extrovert by nature and when I discovered that there was a job allowing me to speak with ambitious entrepreneurs every day, develop your own thesis on a particular sector and contribute to transforming an industry, I went all-in.
What opportunities, threats and risks does the current economic downturn have for the fintech market?
We’ve come from a market that rewarded pure growth to a market which now values efficient growth, and clearly raising funds is becoming more challenging in the current macro-economic context. That being said, the traditional financial system is still inefficient, slow, often built on obsolete technology. Therefore, I believe there continues to be ample opportunity for founders to provide better products and customer experiences, especially in sectors such as B2B FinTech infrastructure, embedded finance, open insurance, payment analytics, climate fintech and so on.
What advice would you give to Founders looking to raise funds in the current climate and what Terms should they focus upon?
Founders are naturally wary of lower valuations in the current climate, but this market reset should not spook early stage businesses. For SMEs that are hopefully years off an exit, valuations are not the ultimate mark of success and should not be overly embellished. With future financing, valuations will likely increase, and an accurate number will reduce the likelihood of a later down-round.
Attracting financing is crucial for any startup looking to grow, but founders should also take the opportunity to carefully select investors who can help guide their business and realise their vision. It’s a two-way street.
What do you see as the key pitfalls that can sink a startup?
Let’s call out the elephant in the room. We may not officially be in a recession yet, but the market we’re operating in is incredibly different right now.
Over the past few months, we’ve seen hiring freezes and layoffs, as well as VC companies taking caution with where they put their cash and telling portfolio companies to find a “path to profitability”. Gone are the glory days of 2021 when valuations were sky-high, VC investment almost doubled and close to 600 new European unicorns were created (compared to just 167 in 2020).
But whilst some tech companies are making cutbacks, this won’t be the case for all.
