9 Berlin-based VCs discuss how COVID-19 has changed the landscape

A breeding ground for European entrepreneurs, Berlin has a knack for producing a lot of new startups: the city attracts top international, diverse talent, and it is packed with investors, events and accelerators. Also important: it’s a more affordable place to live and work when compared to many other cities in the region.

Berlin ranked 10th place in the 2019 Global Ecosystem Report, trailing behind only two other European cities: London and Paris. It’s home to unicorns such as N26, Zalando, HelloFresh and pioneers of the scene such as SoundCloud.

Top VCs include Earlybird, Point Nine, Project A, Rocket Internet, Holtzbrinck Ventures, and accelerators such as Axel Springer Plug and Play Accelerator, hub:raum and The Family.

To get a sense of how the novel coronavirus has changed the landscape, we asked nine investors to give us an insight into their thinking during these pivotal times:

Jorge Fonturbel, Target Global

Which trends are you most excited about investing in, generally? 
Mobility, logistics, automotive, industry automation, supply chain.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
70% Europe and Israel, 30% rest of world.

Luis Shemtov, Lunar Ventures

Which trends are you most excited about investing in, generally? 
We invest in the overlap of deep tech and software. in 2020 we’re focused on low data machine learning, private computation, shift to MLops, edge cloud, dev tools consumerization expanding into other software fields.

What’s your latest, most exciting investment? 
Latest is Neurolabs.eu — developing a platform for computer vision synthetic data.

What are you looking for in your next investment, in general?
Pre-seed/seed global minded technical founders.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
We’re Europe-wide, less than half in Berlin.

How should investors in other cities think about the overall investment climate and opportunities in your city? 
Berlin is rapidly evolving from its consumer/rocket past into a global hub for diversified software technology.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
At pre-seed stages, there are still major advantages to hubs by A stage and Silicon Valley by B stage, which remote work cannot solve.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times? 
None. We invest in hard software. Some go-to-market strategies slowed down, but we’re not seeing correlation so far.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
So far most of the portfolio startups have accelerated. The biggest worry is investor behavior in line with the LP fundraising environment uncertainty for seed/Series A.

Mike Lobanov, Target Global

9 Berlin-based VCs discuss how COVID-19 has changed the landscape

A breeding ground for European entrepreneurs, Berlin has a knack for producing a lot of new startups: the city attracts top international, diverse talent, and it is packed with investors, events and accelerators. Also important: it’s a more affordable place to live and work when compared to many other cities in the region.

Berlin ranked 10th place in the 2019 Global Ecosystem Report, trailing behind only two other European cities: London and Paris. It’s home to unicorns such as N26, Zalando, HelloFresh and pioneers of the scene such as SoundCloud.

Top VCs include Earlybird, Point Nine, Project A, Rocket Internet, Holtzbrinck Ventures, and accelerators such as Axel Springer Plug and Play Accelerator, hub:raum and The Family.

To get a sense of how the novel coronavirus has changed the landscape, we asked nine investors to give us an insight into their thinking during these pivotal times:

Jorge Fonturbel, Target Global

Which trends are you most excited about investing in, generally? 
Mobility, logistics, automotive, industry automation, supply chain.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
70% Europe and Israel, 30% rest of world.

Luis Shemtov, Lunar Ventures

Which trends are you most excited about investing in, generally? 
We invest in the overlap of deep tech and software. in 2020 we’re focused on low data machine learning, private computation, shift to MLops, edge cloud, dev tools consumerization expanding into other software fields.

What’s your latest, most exciting investment? 
Latest is Neurolabs.eu — developing a platform for computer vision synthetic data.

What are you looking for in your next investment, in general?
Pre-seed/seed global minded technical founders.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
We’re Europe-wide, less than half in Berlin.

How should investors in other cities think about the overall investment climate and opportunities in your city? 
Berlin is rapidly evolving from its consumer/rocket past into a global hub for diversified software technology.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
At pre-seed stages, there are still major advantages to hubs by A stage and Silicon Valley by B stage, which remote work cannot solve.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times? 
None. We invest in hard software. Some go-to-market strategies slowed down, but we’re not seeing correlation so far.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
So far most of the portfolio startups have accelerated. The biggest worry is investor behavior in line with the LP fundraising environment uncertainty for seed/Series A.

Mike Lobanov, Target Global

Rolling updates on Beirut, a city and a tech community devastated

It was only relatively recently, in October 2018, that TechCrunch held Startup Battlefield MENA to unpack startups in the Middle East and North Africa. When TechCrunch went looking for a city in the region to host the event in, it quickly became clear that Beirut was the one for us. Vibrant, full of creative entrepreneurs, and a fantastic startup scene made it a natural TechCrunch choice.

That year Beirut came into its own as tech cluster, with the ongoing emergence of the Beirut Digital District, Antwork and similar initiatives and spaces in the city.

Beirut has created many stand-out startups including Instabug and MYKI, as well as local VC funds including BeryTech Fund and Leap Ventures among others.

Startup Battlefield MENA was a huge success and helped shine a light on that ecosystem.

But it goes without saying that both Lebanon’s financial and political crisis last year, combined with the COVID-19 pandemic, has hit Beirut very hard.

We have therefore witnessed the explosion yesterday, which devastated the city and so many lives, with enormous sadness. Our hearts go out to everyone there.

So this post will not be a traditional TechCrunch post about startups and investors.

This will be kept as a rolling list of updates and stories from the tech enthusiasts, entrepreneurs and investors in a city which is close to TechCrunch’s heart and will be updated as we get information, and put into sections.

Any tech founders or investors in Beirut can email me a statement about how they are doing, if they are well, how their team are doing, if their office was damaged etc. Any stories AT ALL can be sent to mike [AT] mikebutcher.me and I will assemble them for publication here. Put “Beirut” in the subject line.

URGENT NEEDS:
Maps of Shelters, Initiative to Locate Victims https://helplebanon.carrd.co/

FINANCIAL DONATIONS:
You can donate to the Disaster Relief Fund, Lebanese Red Cross and others here.

Lebanese Red Cross donations should be done on desktop (not mobile as their app has some glitches).

Impact Lebanon, a non-profit organization, is a social incubator for driven Lebanese around the world and is raising a crowd-funder here.

Life Lebanon is a relief fund created by the Lebanese in Finance organization (a serious organization formed of expats mostly in UK and US)

DONATE BLOOD:
To donate blood in Lebanon: https://dsclebanon.org/who-we-are | http://www.redcross.org.lb/SubPage.aspx?pageid=317

Vetted and reliable NGOs worth supporting:
Lebanese Red Cross
Offre Joie
Chance Association
Bank to School
Arc En Ciel
Bassma
Sesobel

VOLUNTEERING:
Offre-Joie is an organization that is very respectable and has done good work in reconstruction post-civil war, it’s now seeking volunteers and raising a relief fund here.

MEDIA / INFORMATION:
The961 is one of the leading Lebanese English media/news sites and nd one of the handful of independent and non-politically backed media outlets in the country. Check their Instagram page for pictures/details of missing people by families and friends following the explosion. They are working with a couple of full stack developers from the dev community in Lebanon to develop a platform of some sort where people can submit missing people and their info. It will be set up directly on The961.com as an extension to the news site. It’s also launched a fundraiser for the Lebanese Red Cross through their NGO (legally registered in Canada).

STORIES FROM THE GROUND:

• Entrepreneur Omar Itani: “Yesterday I lost a lot, my car, my house, my phone, one of our shops. The shop was inaugurated less than three months ago, we have poured hundreds of hours of work into the shop and invested thousands and thousands of dollars. Since its opening, the shop has been doing tremendously well and became one of the city’s fashion landmarks. Today the shop is only a memory nothing remains, all vanished in a second.” Read here.

• Business Empower is a Beirut-based technology company that offers e-commerce, data analytics, security and cloud solutions for several local and multi-national companies. The business has sustained significant damage from the event. It was stablished in 2008 by founder Mouhammad Fakhoury. Fakhoury, a Syracuse University alumni and previous Software Engineer at Adobe Systems and Microsoft, who moved to Lebanon to start his own company. Thankfully no one was physically hurt, employees were working remotely due to covid-19 restrictions.

MORE UPDATES WILL FOLLOW….

(Image credit: AP Photo/Hussein Malla)(Hussein Malla)

Hear Cloudflare and PlanGrid’s amazing journey from founding to exit at Disrupt 2020

How and when should startup founders think about the “exit”? It’s the perennial question in tech entrepreneurialism, but the how’s and when’s are questions to which there are a multitude of answers. For one thing, new founders often forget that the terms of the exit may not eventually be entirely in their control. There’s the board to think of, the strategic direction of the company, the first-in investors, the last-in. You name it. We’ll be chatting about this at Disrupt 2020.

Exits normally happen in only one of two ways: Either the startup gets acquired for enough money to give the investors a return or it grows big enough to list on the public markets. And it just so happens we have two perfect founders who will be able to unpack their own journeys on those two roads.

When Cloudflare went public last year it certainly wasn’t the end of its 10-year journey, and nor was it PlanGrid’s when it was acquired by Autodesk in 2018.

Cloudflare’s Michelle Zatlyn saw every nook and cranny of the company’s journey towards its IPO, which received a warm reception, even if there were a few bumps along the road leading up to it. What comes after an IPO and how to do you even get there in the first place? Zatlyn will be laying it all out for us.

PlanGrid’s journey to acquisition by Autodesk was equally fascinating, and Tracy Young – who, as CEO and co-founder, shepherded the company to an $875 Million exit – will be able to give us an insight into what it’s like to dance with a potential acquirer, go through that (often fraught) process, and come out the other side.

We’re excited to host this conversation at Disrupt 2020 and expect it to fill up quickly. Grab your pass before this Friday to save up to $300 on this session and more.

The Great TechCrunch Survey of Europe’s VCs — Be featured in our survey

TechCrunch is embarking on a major new project to survey the venture capital investors of Europe.


Over the next few weeks, we will be ‘zeroing-in’ on Europe’s major cities, from A-Z, Amsterdam to Zurich, and many points in-between.

It’s part of a broader series of surveys we’re doing to help founders find the right investors. 

Our survey will capture how each European startup is fairing, and what changes are being wrought amongst investors by the Coronavirus pandemic.

We’d like to know how your city’s startup scene is evolving, how the tech sector is being impacted by COVID-19, and generally how you things will evolve from here. 

Our survey will only be about investors, and will only be sent to investors.

The shortlist of questions will require only brief responses, but the more you want to add, the better.

The deadline for entries is the end of next week, August 7th and you can fill it out here.

Obviously, investors who contribute will be published in the final surveys.

What kinds of things do we want to know?

Questions will include trends are you most excited? What startup do you wish someone would create?

Where are the overlooked opportunities? What are you looking for in your next investment, in general?

 How is your local ecosystem going? And how has COVID-19 impacted your investment strategy? 

The survey will cover almost every European country, on the continent of Europe (not just EU members, btw), so just look for your country in the menu on the survey and please participate (if you’re a venture capital investor).

Thank you for participating. If you have questions you can email mike@techcrunch.com

The Great TechCrunch Survey of Europe’s VCs — Be featured in our survey

TechCrunch is embarking on a major new project to survey the venture capital investors of Europe.


Over the next few weeks, we will be ‘zeroing-in’ on Europe’s major cities, from A-Z, Amsterdam to Zurich, and many points in-between.

It’s part of a broader series of surveys we’re doing to help founders find the right investors. 

Our survey will capture how each European startup is fairing, and what changes are being wrought amongst investors by the Coronavirus pandemic.

We’d like to know how your city’s startup scene is evolving, how the tech sector is being impacted by COVID-19, and generally how you things will evolve from here. 

Our survey will only be about investors, and will only be sent to investors.

The shortlist of questions will require only brief responses, but the more you want to add, the better.

The deadline for entries is the end of next week, August 7th and you can fill it out here.

Obviously, investors who contribute will be published in the final surveys.

What kinds of things do we want to know?

Questions will include trends are you most excited? What startup do you wish someone would create?

Where are the overlooked opportunities? What are you looking for in your next investment, in general?

 How is your local ecosystem going? And how has COVID-19 impacted your investment strategy? 

The survey will cover almost every European country, on the continent of Europe (not just EU members, btw), so just look for your country in the menu on the survey and please participate (if you’re a venture capital investor).

Thank you for participating. If you have questions you can email mike@techcrunch.com

With Robinhood’s UK launch delayed, eToro to bring out UK debit card following acquisition

Investment app eToro is to launch a debit card, following its acquisition of Marq Millions Ltd, the UK based e-money business. Marq Millions will now trade as eToro Money and will be the issuer for eToro’s card. The acquisition was for an undisclosed amount, and the Marq Millions management team stays on.

The card will initially be available to eToro Club members in the UK, then Europe, and will later be extended to non-eToro users. eToro has over 14 million registered users and expects take-up of the card to be strong.

A spokesperson said the card could now provide instant ‘cash-out and cash-in’ functionality to customers, a feature which their user-base has been requesting for a while.

The debit cards won’t launch immediately but will launch first in the UK, followed by other markets. eToro Money has a Principal Membership with VISA and an EMI License permission from the Financial Conduct Authority . This means they are likely to hit the ground running, subject to approval from the FCA.

Commenting on the acquisition, co-founder and CEO of eToro, Yoni Assia, said in a statement: “The launch of a debit card is a natural next step for eToro as we broaden the range of services that we provide to our users… The debit card will provide instant cash-out and cash-in functionality, greatly improving the user experience. We expect to see a strong take-up of the card – initially from our client base.”

eToro allows customers to invest in stocks and commodities, as well as crypto assets like Bitcoin. It claims to have 14 million registered users, all of whom share their investment strategies, similar to a social network. It’s regulated in Europe by the Cyprus Securities and Exchange Commission, by the Financial Conduct Authority in the UK and by the Australian Securities and Investments Commission.

Mahmood Kamran, former COO of Marq Millions and now Managing Director of eToro Money, commented: “We are incredibly excited to become part of the eToro Group. The backing of this leading global fintech, will allow us to issue a debit card which we are confident will become a market leader globally.”

The context to this is that eToro is racing to build up it’s UK user-base ahead of a potential launch by competitor Robinhood . The US-based investment platform , which has made waves in the US, has had to delay its UK launch “indefinitely” after one of its customers killed himself in the US, with the consequent regulatory interest in its activities.

Robinhood previously said it had a waiting list of more than 250,000 people in the UK ahead of a launch planned for this year, showing that there will likely be strong demand for eToro’s services, given it now has a ‘head start’.

eToro has had over 256,000 new registrations in the UK since it launched zero commission stocks in May last year, (over 3 million globally), and says it can afford to offer zero commission as it is multi-asset and global.

Russia’s BestDoctor attracts international investors for its $4.5M round

The private medical insurance market is expanding year on year by over 5%, and that includes in Russia where the insurance market – which grew by 4% in 2019 – has reached a value of almost $22 billion.

So it’s not that surprising that Russian insurtech startup BestDoctor has now closed its third round of financing for $4.5 million. Lead investors AddVenture, based out of Moscow, and Target Global, based out of Berlin, were joined by the London-based LVL1 fund, which had previously invested in the company.

BestDoctor is an online medical insurance platform offering private medical insurance for companies and their employees. As well as insurance, its also delivers 24/7 health support and medical consultations via its mobile app. Users can also get access to recommendations on preventive care and online support from BestDoctor physicians. The idea is that users save up to 23% on their annual medical expenses, and up to 95% of users renew the contract after a year.
 
Its clients largely consist of Russian corporates including Voximplant, Faberlic, Ivideon, Prisma Labs and Rambler Group, which add up to over 30,000 people. It also collaborates with 11,000 clinics across Russia.

Mark Sanevich, BestDoctor’s CEO and co-founder says the need for online medical services was amplified during the pandemic: “Our business received a strong boost. Now we are going to focus on establishing a comprehensive platform on the basis of medical insurance.”

Target Global Managing Partner Mikhail Lobanov said: “BestDoctor is a rare example of a company that combines medicine and high-tech, while directly connecting employers with medical clinics. High-tech private medical insurance, with the ability to consult a doctor 24/7 ensures transparency of all expenses.”

AddVenture managing partner Maxim Medvedev said: “By summer 2019, BestDoctor had a good head start: it had large enterprise clients, the company figured out the market’s problems and needs, and dozens of product ideas were tested.”

BestDoctor plans to spend the newly raised funds on developing its software and also plans to expand its sales activity, concentrating on new product segments.

Eco-friendly laundry goods subscription service smol raises £8M from Balderton

Smol is a startup that delivers eco-friendly laundry capsules and dishwasher tablets on subscription through letterboxes, which undercut the price of the leading brands, to people’s homes. It’s now raised £8 million in a Series A funding round led by Balderton Capital with participation from JamJar Investments. The funding will see smol push into new product categories, expand further into new markets and expand its team. Before this round smol had been funded by seed money from private investors.  

Created by former Unilever employees, Paula Quazi and Nick Green in 2018, its also launched its own-brand, animal-fat-free, vegan fabric conditioner and a 100% plastic-free, child-lock packaging for its laundry and dishwashing products, as well as fabric conditioner made from 100% post-consumer recycled plastic which as recyclable. Smol also offers a returns scheme for refill and reuse.

P&G and Unilever currently dominate the market, while smog hopes to become ‘the dollar shave club’ of laundry.

Paula Quazi, Co-founder of smol said in a statement: “Having seen how the industry has barely innovated in over a hundred years we launched smol to take the hassle out of washing for families whose laundry needs have been ignored for decades.”

Suranga Chandratillake, Partner at Balderton Capital said: “When people think of technology disruption, it is normal to think of digital products and internet tools. However, technology has the power to make life better for us in the most unexpected ways and we believe Paula, Nick and their amazing team have tapped into just such an opportunity at smol.”

Eco-friendly laundry goods subscription service smol raises £8M from Balderton

Smol is a startup that delivers eco-friendly laundry capsules and dishwasher tablets on subscription through letterboxes, which undercut the price of the leading brands, to people’s homes. It’s now raised £8 million in a Series A funding round led by Balderton Capital with participation from JamJar Investments. The funding will see smol push into new product categories, expand further into new markets and expand its team. Before this round smol had been funded by seed money from private investors.  

Created by former Unilever employees, Paula Quazi and Nick Green in 2018, its also launched its own-brand, animal-fat-free, vegan fabric conditioner and a 100% plastic-free, child-lock packaging for its laundry and dishwashing products, as well as fabric conditioner made from 100% post-consumer recycled plastic which as recyclable. Smol also offers a returns scheme for refill and reuse.

P&G and Unilever currently dominate the market, while smog hopes to become ‘the dollar shave club’ of laundry.

Paula Quazi, Co-founder of smol said in a statement: “Having seen how the industry has barely innovated in over a hundred years we launched smol to take the hassle out of washing for families whose laundry needs have been ignored for decades.”

Suranga Chandratillake, Partner at Balderton Capital said: “When people think of technology disruption, it is normal to think of digital products and internet tools. However, technology has the power to make life better for us in the most unexpected ways and we believe Paula, Nick and their amazing team have tapped into just such an opportunity at smol.”