2021 Investment Letter
We’ve now finished our 2nd year of angel investing and board advisory and thought we’d give some transparency into our investment portfolio. We continue investing in our own names (to benefit from the SEIS and EIS schemes) and being an LP in Outward VC’s FinTech focused fund.
Our skill set
We have realized that the skill sets we have, the experience we have gained and the network we have developed is of value to founders and early-stage companies and we would like to leverage that through angel investing and board advisory work. We are your stereotypical operating exec investors and believe this type of investing is a win-win for us and the founders we invest in.
Where we invest directly, we give limited support and where we are asked to additionally be a NED or Board Advisor, we give up pre-agreed amounts of time / month (which is always exceeded!).
Investment Philosophy
First off, well done to the UK government for continuing the support the Seed Enterprise investment scheme. This scheme allows angel investors to make riskier investments based on what-ifs, rather than minimal-risk scenarios. This is how the UK will get successful moonshots.
Hence, we started investing using 3 basic core principles which we continue to stick with:
Is the problem described a real one that needs to be solved?
Is the solution being pitched a possible and likely solution to the problem?
Is the founding team capable of executing on the solution and do we think we can work harmoniously with them to help them?
Note: We obviously do granular due diligence to confirm all 3 principles too!
We should highlight the 3rd point as we are married couple with time consuming jobs and 3 daughters. As such, we are time poor and if we are going to sacrifice time to spend with founders (there is always a sacrifice), then we want to ensure the help is both wanted and appreciated.
Having such a light investment thesis also means (rightly or wrongly) that we are willing to invest cross verticals (for now!).
We will take each tax year and reassess if we wish to continue actively investing or slow-down and (hopefully) wait for some exits, giving us capital, we can redeploy into investing.
Deal flow
As investors who have full-time jobs, continue to not actively look for investments and only rely on in-bound interest. These come through our:
1. Airtable form which is on our LinkedIn and Twitter profiles. Note: We openly stole the idea for an airtable form from Shefali Roy;
2. Recommendations from co-investors in our portfolio firms (this increases with each investment);
3. VCs who have co-invested or like the firms we have invested in; and now also
4. VC scouts like Sameer Singh.
2021 Investments
First off we’d like to apologise to all the start-ups we did not invest in. In 2021, we invested in 8 new start-ups, all at the pre-seed stage. We also did a follow-up in 1 of those start-ups. However, 1 is still in full stealth mode and one is not a ‘tech’ investment though EIS eligible, so we have only written about 6 of the investments. The 6 public tech investments are in 5 verticals and 3 of them have diverse founding teams. Details are tabulated below and written up at length, further below.
However, we actually started the year with a follow-up in investment in a 2020 investment (Howbout) and the successful close of their 1st crowd round. This was also the 1st time we had supported a crowdfunding round!
Algbra
Algbra were our 1st FinTech investment and we closed it in Q1. At a first glance it may seem like a counter-intuitive one, with challenger banking looking very saturated.
What drew our attention to Algbra was who they wanted to provide banking services for and who the founders were. Zeiad and Fizel explained their goal of (eventually) offering a full service ethical banking solution and this is something that resonated with both of us. One of the ironies of the digital age is that it is very un-inclusive if you are either socio-economically disadvantaged (don’t have a smart phone let alone an iphone etc) or do not want to buy vanilla products (start-ups need scale to make unit economics work, so they only offer vanilla products to vanilla customers). The vision of the algbra founders was to match the services offered by the new trendy FinTechs but offer them while meeting the ethical (religion, ESG etc) requirements of customers.
Since investing, we’ve seen some incredibly exciting and prominent new investors come in and the market will be hearing a very exciting funding announcement from Algbra shortly, and this only excites us further on the possibilities.
Konvi
Our 2nd FinTech investment in 2021, was in Q4 and in Konvi. We were contacted directly through our Airtable form, which was filled in the by the co-founder and CEO: Ioana.
Konvi is a marketplace for funds dedicated to alternative assets (collectibles). Allowing retail investors in the EU to buy shares in SPVs which own a specific alternate asset class such as watches, wine, whiskey etc… Something we’ve seen be very successful in the US with companies like Rally Road.
Weirdly, Amir had been investigating this space for a while, with the idea of venture backing a startup to do something similar, so was already very familiar with the market and the regulations around it. Amir also happens to be a big collector of comics, so there was also an element of serendipity to this investment.
What due diligence calls with Ioana and Lena showed us, was that Konvi has solved all the regulatory issues of allowing retail investors to buy shares in the SPVs that would own the assets, while protecting their funds but making the administrative burden cost effective for a start-up.
They had also in-house built their own full-stack tech stack to power their idea with just 1 technical co-founder.
Aisle 3
Aisle 3 were one of 2 e-commerce investments we made in Q4 and the introduction to their founder Thomas, came from a co-investor in Howbout.
Thomas had identified the problem of how difficult it is to search and find the cheapest retailer for a specific product and how there is consumer demand to solve this problem.
Aisle 3’s solution is a proprietary and in-built one that leverages AI, ML and machine vision to be able to scrape the required data from retailers and present a single clean results page that overcomes the lack of standardized product data feeds. From this it was easy to then see the possibilities in terms of both embedding Aisle 3 in other platforms or adding FinTech capabilities into Aisle 3.
Quiver
Our 2nd e-commerce investment Quiver also came from a recommendation from an Angel called James but a different one! A year ago Amir had a CCO conversation with James around his capacity in supporting YourParkingSpace. A year later James approached about investments he was making, which was Quiver.
Investing in Quiver was a quick and easy decision, though they really were very early stage. The conversation with co-founder and CEO Matt went very well and it was clear that both the tech stack and developer portal were built to an excellent standard.
The actual solution, an API driven delivery solution for e-commerce firms that gives instant, pre-checkout delivery price and timings, that in-turn drives higher conversions, was compelling and the unit economics of each delivery were enough to make the decision. As the majority of commerce shifts to online channels, retailers will constantly strive for solutions that both differentiate them and drive higher conversion rates. We believe Quiver can do both and through a very simple integration.
Fertility Circle
We invested in Fertility Circle, our 1st FemTech investment, in Q1. One of the co-founders Jo had been researching successful crowd rounds and had seen our crowdcube video for Howbout. Jo contacted us directly through LinkedIn as a result.
Due to our personal struggles (despite our 3 daughters) in this area, this was a very personal topic for us, so we were hoping they had identified a real problem and solution and as a founding team they were credible.
We had our call with Abi and Jo and went through all the details. Interestingly they had identified a B2B gap in the market around regulatory mandatory psychological support for couples going through IVF, that all clinics in the UK and US had to provide.
Their platform offers clinics a turn-key solution to this regulation, which would give their IVF couples with a cutting-edge tech solution providing them not only support but also a community of others going through the same scenario.
We happily invested and were delighted to support their successful crowdcube campaign and then see the recognition they got from Virgin and Holly Branson.
Lapse
End of Q2 2021, we made our 2nd investment in the social space (after Howbout) and it was in Lapse. Lapse was brought to our attention by Sameer Singh, who is a scout for Atomico and a co-investor in Howbout.
Sameer felt that Claire’s experience across Meta and Snap would be perfect for Lapse and hence we were introduced to the founders Ben and Dan.
Investing was a quick and easy decision, as the idea (closed group disposable camera app) resonated with us very quickly and the founder’s experience was both exceptional and relevant (which was later proven by how viral the app went). We were also amazed at the quality of the other angels and VCs funding the round.
I think we were the last investor before the round closed at the end of Q2. We then saw the app launch at the end of Q3 with a waitlist of 150k people, which in turn took it straight to the top of the app store.
Post launch the organic growth continues to be phenomenal and we were unsurprised to hear about the inbound VC interest the Lapse team got. As such only 5 months later (in Q4), we participated in their seed round led by Octopus and Google which achieved an amazing increase in valuation!
PS
If you’re wondering about the image accompanying this investor letter its an AI generated piece of art using the ‘Wombo Dream’ app and typing in ‘angel money’ as the key words….
