UNIQA Ventures is the venture capital fund of UNIQA Insurance Group AG, founded in 2016 and based in Vienna, Austria. The fund invests in innovative business models and outstanding founding teams with a clear vision to transform their industry. Their investment focus is on startups with an existing product-market fit and solid traction in the late seed or early growth stage in sectors such as FinTech, InsurTech, and HealthTech across Europe. The UNIQA Ventures portfolio, currently consisting of 30 tech startups, including one unicorn, has had five exits since 2016 as well as solid double-digit returns to date.
Fund Strategy Overview
Geography: CEE
Preferred industries: FinTech, InsurTech, HealthTech
Investment ticket: €1-3M
Company stage: Series A
Product type: scalable (digital) business models, B2C and B2B but mainly B2B(2C) focus
Product stage: proven product-market fit
Revenues: around €1M ARR (or 80-100k MRR)
Q&A with Andreas Nemeth, CEO
What are the 5 main things you look for in a startup?
The most important aspects of a startup that we pay attention to are team, market, product/tech, traction, and finally the potential exit scenarios.
What disqualifies a startup as your potential investment target?
We are very selective and usually only invest in 1-2% of the startups we see. We like to discover fast growing enterprises with double-digit MoM growth rates and strong revenue doubling year of year. What’s more, we look for outstanding founder teams with a good combination of market, tech and business competencies and an established product-market fit.
Also, the stage of the company has huge importance for our investment decision, we only invest in Series A companies. Seed or even pre-seed opportunities are too early for us.
What in your opinion differentiates the best founders from the rest?
It’s all about their attitude and persistence as well as the ability to inspire others. Some of them are humble, some are loud, some love to explore while others are extremely focused. Profound industry knowledge in combination with the willingness to shape or disrupt the future of key industries is a plus. But never ever would you only admire them for their technical skills and knowledge but for how they act and for being a true source of inspiration for the startup team.
What startups should take into account before making a deal with a VC fund?
If you approach VCs you have to understand the basic rules of the venture capital industry. Keep in mind that they are looking for fast-moving high growth opportunities and that they don’t invest to take a long-term position in your startup but have an investment horizon of maybe 6-8 years in order to rapidly scale the company and prepare for a profitable exit. Do your homework, understand and find out who is the right type of VC for your specific business and industry. There are many VC funds out there but be aware of the power law of venture capital and that attracting the right and most prominent investors for your company can be a strong signal for others to follow.
What is your approach to startup valuation and a preferable share in the company?
Valuation is a function of your team’s execution power and growth trajectory. UNIQA Ventures usually aims for stakes of 5% to 15% but always co-invests with other VCs. Subsequently, valuation is a triangulation of traction, dilution, and round size.
How do you support your portfolio companies?
Our focus is to act as a financial advisor as well as to provide our portfolio companies with strategic support and intelligent capital growth. Our investment includes the added benefit of deep industry expertise, particularly in financial services, insurance, and healthcare, as well as a strong network in our core markets of Austria and Central and Eastern Europe (CEE).
What are the best-performing companies in your portfolio?
We are super excited about the performance of an investment in the Vienna-based FinTech startup Bitpanda, a digital assets platform used to facilitate the buying and selling of cryptocurrencies. In the InsurTech space, we are happy investors of Luko, a Paris-based home insurance for startups. A recent addition to the portfolio is Wayflyer, an Irish startup providing revenue-based financing to e-commerce shops in Europe and the US. In CEE our best-performing startup is Twisto, the Czech Fintech pioneering buy-now-pay-later in the region which received a bid from Zip Money, an Australian Payment Provider that is seeking to acquire it soon.
What are your notable lessons learned from investments that didn’t work out as expected?
Failure is an integral part of the venture capital game - it’s better to accept that it’s inevitable. The biggest mistake is to ignore early warning signals as investors and founders are the only ones that can save startups from great disaster by taking unpleasant but necessary action as early as possible. No matter what’s your plan A you always have to have a plan B in reserve.
What are the hottest markets you currently look at as VC and where do you see the biggest hype?
UNIQA Ventures invests in three main verticals: InsurTech, FinTech, and HealthTech but we are also looking for possibilities to expand our investments to promising startups from other verticals with embedded finance propositions, e.g. mobility sector startups offering car subscription or startups at the intersection of Healthcare and Insurance offering medical services by means of insurance plans. Next to embedded finance and insurance, we like models connected to the booming e-commerce space and marketplace or platform models. In HealthTech, we consider mental health, telemedicine, and digital therapeutics as hot topics to watch.
In your view, what are the key trends that will shape the European VC scene in the coming years?
We see that European VCs are outperforming their US and Asian peers in recent years. Consequently, we expect a further inflow of US and Asian VC money-seeking investments in Europe and fewer but bigger deals in the next 12 months. Exit markets are extremely attractive still and we forecast M&A to further pick up also leading to some consolidation and cross-country mergers among startups as well as many notable IPOs and more European Unicorns. Although the UK, Germany and France continue to be the main European VC markets, we expect to see more activity in peripheral Europe. In summary, we consider European tech startups as a very attractive investment opportunity and would expect a persistently positive market environment in the rest of 2021 and into 2022.
Related Posts:
VC Of The Month - Iron Wolf Capital (by Magdalena Balcerzak, Manager, Vestbee)
VC Of The Month - Point Nine Capital (by Magdalena Balcerzak, Manager, Vestbee)
VC Of The Month - 212 (by Magdalena Balcerzak, Manager, Vestbee)
