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Point Nine Capital - vc of the month
17 May 2021·6 min read

Magdalena Balcerzak

Manager, Vestbee

VC Of The Month - Point Nine Capital

Point Nine is a seed-stage VC fund focused on startups in B2B SaaS and B2B marketplaces verticals. They have been amongst the first investors that supported companies like Algolia, Brainly, Contentful, Delivery Hero, Docplanner, Mambu, Loom, Typeform, Revolut, and Zendesk. They invest mostly at the seed (AKA the v0.9 stage) and aim to help startups develop and succeed - more than 55% of the companies they backed at the seed stage raised a $5M+ Series A from international Tier 1 VC funds.

Fund Strategy Overview

Geography: Geo agnostic
Preferred industries: B2B SaaS and B2B marketplace
Investment ticket: €500k - €3M
Company stage: Seed
Product type: Any
Product stage: MVP onwards
Revenues: Pre-revenue

Q&A with Paweł Chudziński, Partner

What are the 5 main things you look for in a startup?

To begin, we primarily look for B2B SaaS and B2B marketplace startups at the seed stage. We invest early, sometimes even off the back of a simple MVP and great team so we’re fairly flexible in that respect. Aside from that, we look for exceptional founders with a unique insight into the market or the problem they are trying to solve. Ideally, the target market should be large enough for us to believe that the business idea could eventually turn into a successful billion-dollar company. On top of that, there should be something in the startup we consider funding, that differentiates it from existing competitors in that category.

What disqualifies a startup as your potential investment target?

We generally don’t invest in later-stage funding rounds, so if a company is raising a very large Series A or B, this wouldn’t be a good fit for us. Moreover, we are strongly focused on supporting technology-enabled businesses, so we wouldn’t look at many D2C companies for instance. 

What in your opinion differentiates the best founders from the rest?

As mentioned above, we believe that many of the best founders have a unique insight or approach to the problem they are solving, so we do appreciate their innovative and fresh perspective that pushes the business forward. They also tend to be extremely determined and, at times, obsessed (but in a positive way) with achieving their goals. Founders we seek are great at seeing the big picture, as well as the small details, and they know how to put their ideas into action.

What startups should take into account before making a deal with a VC fund?

This is a really important decision for startup founders to pick the right VC fund with the same objectives, as a VC most likely will be involved in their company for a very long time. The key is to find a VC fund that really understands the business and, ideally, has experience in supporting startups from a similar field or with a similar business model. Most of all, it is important that, in the beginning, companies choose a partner that they get along with and can see themselves working with for the long term.

What is your approach to startup valuation and preferable share in the company?

In terms of share in the company, we strive to get to ideally 15% ownership. When it comes to valuation - this really depends on the stage of the company, so in our case, it varies significantly.

How do you support your portfolio companies?

We work with our portfolio companies very closely and always strive to be the best possible partner and sounding board for them. We get involved in both operational and strategic discussions, from helping them build their first KPI dashboard to structuring their sales team, hiring their first Head of HR, or iterating on their product roadmap. In particular, we get very involved when it comes to fundraising and ensuring our portfolio startups get the very best follow up investor on board. So far this has been working pretty well as we have the highest Seed to Series A conversion rate in Europe and our portfolio companies have raised with all the Tier 1 VC funds in the US over the past 10 years.

What are the best-performing companies in your portfolio?

Some of the most valuable companies of those that we have ever backed are DeliveryHero, Revolut, Zendesk, Mambu, Chainalysis. Clio, Algolia, Contentful and Tier. 

What are your notable lessons learned from investments that didn’t work out as expected?

We always learn something from every investment that doesn’t work out and needs to be improved in the future. One clear lesson is that it’s very difficult for companies to find product-market fit, particularly if they are building horizontal tools that can be used across different users/industries. This is why, before making a final decision to invest (even if it’s very early), we try to get some indication from the market that users really want or love the specific product/service or that the product is solving a clear need for a certain type of user.

What are the hottest markets you currently look at as VC and where do you see the biggest hype?

Well, honestly, we’re seeing a lot of hype and hidden potential across all industries these days. There are more investors and capital available than ever before and according to some predictions, 2021 is set to be a record year in terms of the total amount invested by VCs. Aside from that, there are certain markets that get a majority of the hype - anything to do with remote working has taken off. Aside from that, crypto is hot again and we’re seeing investors are becoming increasingly more interested in certain subsets of it such as Defi or NFTs. 

In your view, what are the key trends that will shape the European VC scene in coming years?

That is a very good question. As remote work has taken off, we think that the European VC scene will start developing globally. Nowadays, when US VCs do not necessarily have to travel all of the way over in order to invest, we’re seeing them increasingly more often investing in Europe. Ultimately, we are really bullish on the European tech ecosystem and have no doubt that more and more unicorns are going to come out of the region and potentially rivaling Silicon Valley.


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