Fund profile: Fidelity Growth Partners (Europe)
Today I am profiling the fund of my friend and co-investor Davor Hebel who is an investor with Fidelity Growth Partners Europe.
Davor is a super smiley Croatian. HBS-grad as most of the venture community it seems, but I would not hold that against him as he also holds a real degree from Carnegie-Mellon. He's been in venture for 5 years now and is "one to watch" in the European venture community in my book. He and Simon Clark are the "historic" investment team at FGPE and they were recently joined by Chris Barchak (who I always found excellent) from Index Ventures.
The group formerly known as Fidelity Ventures recently split into Volition Capital which is taking off on its own, with the great talents of Larry Cheng, Roger Hurwitz and Rob Ketterson and co. taking their show on the road. Navigating this proved to be smooth sailing for the European group who has recently announced its new dedicated £100M European vehicle.
The group always had a strong rep in entreprise software (and clearly gamed thefunded well, what a set of reviews !!) and has branched out into consumer facing opportunities, first with Seatwave and now with Innogames, the first investment out of their new Euro fund. I thought this would be a good time to catch up with Davor and share their strategy with all ye' entrepreneurs out there. Here we go for the Belgian-Croatian face off.:
- Funding: All Fidelity money, same configuration for the India and China funds.
- Sectors: start with software (vertical solutions, SaaS, healthcare IT), add internet (e-commerce, marketplaces), mix with digital entertainment (gaming etc) and season with some cleantech (cautiously, tech-enabled clean such as energy efficiency, smart grid). No surprises there.
- Geo: "Eurovision countries" including Israel and Eastern Europe.
- Investment strategy: "turn good businesses into great businesses"; as opposed to investing in concepts, they invest in businesses, so need proof of business model, fast growth (30%+) and some revenue traction ($2M+) … combined with a great level of ambition. By exception may do seed, but 90% of fund will be acceleration. Like to be last institutional money in ideally. Even better is to be first and last money in.
- Sweetspot deal: Innogames, a fast growing, double digit millon revenue company with 50M users that never raised outside money and was founded by school dropouts (impressive for Germany). Will also happpily play with others such as for Newbay, Seatwave, both venture-backed business where FGPE bring the "scaling capital"
- Obvious competitors: Index Growth, Kennet, Accel, Balderton and sometimes Summit Partners, occasionally US players (I assume Insight, Bessemer)
- Value add and creation focuses on 5 things:
- Geo expansion: going global or regional depending on the company. Sister funds and global network comes to play. Helped AssetControl win first deal in China.
- Business development help. Helped Neverfail get an OEM relationship with VMWare.
- Recruitment. Help craft organisation and hire full N-1 managers
- Strategy: worked with AssetControl ahead of investment to define long-term growth plan with incoming CEO
- Exits: proactive engagement with the buyers to help determine the optimal exit path and timing
Ultimately its "all about backing entrepreneurs with aspirations for greatness". Davor himself "gets a kick out of [his startups] beating the big guys and making money along the way". So No talk of doom and gloom but real fighting talk from Mr Hebel who is very bullish on the future of European entrepreneurship and the ability to build $1bn+ companies "and why not $10bn".
I always liked underdog mentality. You can reach davor at fidelitygrowthpartners com.