1. What’s happening in the tech and venture
ecosystem …
&
Opportunities for Nordic & Baltic Startups
Ben Holmes, Index Ventures
Riga – February 12th 2013
NVN Annual Members meeting
May 23 2012

2. About Index Ventures
• Founded 1996 in Geneva
• Offices in Geneva, London and San Francisco
• Current funds
– Index Ventures VI - €350m (2012) also does seed investments
– Index Growth II - €500m (2011)
– Index Life Science I - €150m (2012)
• Over 100 investments historically including …
NVN Annual Members meeting
May 23 2012

3. We the Nordics & Baltics
NVN Annual Members meeting
May 23 2012

4. A special time to be in the tech ecosystem
Proves we are in the right industry …
• Exceptional time for entrepreneurs to build
disruptive companies
• Unparalleled opportunity for investors to make
big multiples and great IRRs for LPs
NVN Annual Members meeting
May 23 2012

5. Key Dynamics in Venture Ecosystem
Suppliers (LPs)
• Constraining commitments to venture in Europe
• Elongated exit timeframes in existing portfolios is limiting ability to reinvest
Subsitutes New Entrants
Industry Rivalry
• Crowdfunding, • Wave of new seed
(VCs)
marketplaces, investors
• “Full service” pitch
clone factories, • Big new “late-
• Aggressive PR
incubators stage” players
activity
Buyers (Companies and Entrepreneurs)
• More capital efficient models shift power to buyers
• Increasingly brand conscious
NVN Annual Members meeting
May 23 2012

6. Sector Trends
• Each an incredibly disruptive investment theme
• All really kicked off at the same time in the same place (
Cloud Mobile Social
• Big trends all happening in the same place at the same time
• Each theme laden with investment opportunities
• Disrupting tech landscape and investment landscape
NVN Annual Members meeting
May 23 2012

7. “Product” is king
• Product used to be
• Product used to be the functional payload a customer received.
• Product relied on many other divisions and facets of an organisation –
brand & marketing, sales, manufacturing, operations and distribution,
customer service
• The “product” is increasingly consuming the organisation
VC’s Experience of Company- Success or failure often reliant
building process often on
no longer applicable 1 or 2 key employees
NVN Annual Members meeting
May 23 2012

8. The Seed Phenomenon
• $ required to build a product / service far lower
• Mobile platforms and appstores
• Facebook, Google
• Cloud and open-source
• New prototyping and user-testing techniques
• $1m to $100m+ valuation jump can take a few months
Everyone has …but vital to be
noticed >> lots of Returns may be active in seed in
seed money & more driven down… order to intercept at
on the way venture stage
NVN Annual Members meeting
May 23 2012

9. Reinventing VC approach
VC Provides
• Capital • Full service offering
• Sound Advice + • Inhouse teams for
recruiting, marketing, finance, prod
• Introductions
uct advice…
Deal-sourcing approach
• Blogs, PR and media to drive
• via network + inbound
Winning deals on • Entrepreneur sets price
• Relationship; and • Win on brand and perceived
• terms breadth of offering
NVN Annual Members meeting
May 23 2012

10. Clones
• Enormous respect for level of commitment, energy, capital and human
capital being deployed
• More than half of VC losses are down to business model or product
design failing – the cloners take no risk on these elements
[Website + Business
Either need
Model + Salesforce] … complex product
substantial capital
becomes easy to or technology at core
to roll out fast…
clone quickly
NVN Annual Members meeting
May 23 2012

11. Where to build your startup?
Silicon Valley Riga
• Nice and warm • “Refreshing” climate
• Biggest enterprise and • Small home market
consumer market • Fragmented European market
• Homogenous home market • Emerging tech clusters
• Epicenter of software and (London, Stockholm, Berlin, Hels
internet industries inki, Tel Aviv)
• Can “hire team at Starbucks” • Lots of tech talent, maybe fewer
(Really ??) salespeople and marketeers
• Abundance of cash from eager • Increasing levels of interest from
VCs and angels investors -- but not yet a tidal
wave
NVN Annual Members meeting
May 23 2012

12. How can we build global leaders from the Nordics &
Baltics
Global
Product Leverage open Capital
By
Centric platforms Efficient
Default
Exposed to
Global sales Global partner
local
operation network
regulations
Where we can win…
Challenging Sectors
Social media
Ecommerce
SaaS
Enterprise Software
Games
NVN Annual Members meeting
May 23 2012

13. Thank You !
Ben Holmes
www.ben.vc
www.indexventures.com
benh@indexventures.com
NVN Annual Members meeting
May 23 2012