Project A is one of the leading VC funds in Europe with offices in Berlin, Munich, and London having €500M in assets under management. The fund combines financial capital with a wide range of operational support services for its portfolio companies. This includes more than 100 experts from key areas such as software engineering, business intelligence, marketing, recruiting, and many more. Project A was founded in 2012 and since then has supported over 70 startups in 12 countries. The portfolio includes companies such as Catawiki, WorldRemit, Homeday, Spryker, sennder, KRY, Trade Republic, and Voi.
Fund Strategy Overview
Geography: Europe
Preferred industries: Generalist investor with selected focus industries: Digital Health, Enterprise Software, Developer & Data Tools, FinTech, Education, Real Estate & Construction, e-Commerce, Media, Mobility
Investment ticket: Initially $1M to $8M. Up to $30M in total.
Company stage: Seed and Series A investments, post-product, and some initial traction
Product type: Software and tech-enabled business models
Product stage: Post-MVP
Revenues: Pre-revenue
Q&A with Uwe Horstmann, Partner
What are the 5 main things you look for in a startup?
For us, a startup should show the potential to disrupt their industry, embodied in a great founding team with the willingness to learn quickly and the conviction to get things done. Imperative is a solid understanding of the market and the capability to scale team, product, and business.
What disqualifies a startup as your potential investment target?
There is no disqualifier per se, but not all startups are VC cases. Key indicators that qualify an investment target are the market size, high revenue potential, a passionate team that can build a product and hires the right people as well as an effective marketing and sales organization that is in place.
What in your opinion differentiates the best founders from the rest?
Great founders should display the agility to adapt. Especially when things don’t turn out as planned which they never will in the beginning. This is the key moment where good founders stand out from the rest.
What startups should take into account before making a deal with a VC fund?
Founders should follow a simple checklist to find out whether venture capital is right for them:
- Do I really need external funding?
- How much do I really need?
- How much ownership am I going to give away?
- How much am I worth?
- Which investors do I need to approach?
- And how can investors be of help?
What is your approach to startup valuation and preferable share in the company?
We are always aiming for market standards. While we of course would like to have a fair share, the founding team must remain in the driver’s seat and the ownership structure must be sustainable in the long term.
How do you support your portfolio companies?
We combine capital with operational support so that founders get exactly what they need. Project A is an operational VC with over 100+ in-house experts who support our portfolio companies in all areas such as software engineering, product, marketing, business intelligence, design, recruiting, communications, organization building, and business development.
For our portfolio companies, our experts serve as a sparring partner to advise in any business-concerning issues or they work actively as team members in their specific fields at those companies on a short to midterm basis to help grow the business and the organization.
To put it into perspective, our Project A recruitment team handles over 15.000 job applications for our portfolio companies each year. Thus we help our startups get the employees they need on an operational level.
What are the best-performing companies in your portfolio?
They include Trade Republic (Fintech), sennder (logistics), Spryker (Business software), KRY (Digital Healthcare) Catawiki (eCommerce), World Remit (Fintech), and Voi Technology (Mobility) - as well as many others.
What are your notable lessons learned from investments that didn’t work out as expected?
One lesson learned is that while being a VC, you never can be 100 percent sure about anything. That is just the nature of the industry as we have to predict what might happen when we do investments. And this is also what will be proved painfully when an investment doesn’t work out.
Another key takeaway from investments that didn’t work out as expected is that you should aim for optimizing for a great syndicate of constructive people in a startup rather than just maximizing your ownership stakes.
What are the hottest markets you currently look at as VC and where do you see the biggest hype?
We are excited about developer tools and platforms and are very actively looking into commercial open-source companies to disrupt the legacy enterprise software market. Other topics include digital health, logistics, supply chain, AI, and industrial robotics.
In your view, what are the key trends that will shape the European VC scene coming years?
The European startup scene will be much stronger, and we will continue to close the gap between US and European ecosystems, especially in Deep Tech and more complex B2B markets. The European VC ecosystem comes more and more together.
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