We are at a three-dimensional crossroads in the history of humanity. It is a critical juncture for climate change, the way we produce our food, and our long-term health. The way we currently feed ourselves is killing the planet, and it is killing us, too.

We have built a food supply system that is a huge contributor to the climate crisis, and which is also responsible for a nutrition-related health catastrophe in many parts of the world. Current global events have also exposed the downside of concentrated production of certain crops (e.g. wheat and vegetable oil from Russia and Ukraine) — it is time to bring production closer to the point of consumption.

A major new UN report found that food systems account for 80% of the planet’s deforestation, 29% of greenhouse gas emissions, and the largest proportion of biodiversity loss.

Humans turn swathes of land into pasture for greenhouse gas-producing cows. We fell rainforests to grow soy to feed those cows and give them antibiotics which end up polluting water tables. Farmers grow crops that consume huge volumes of water in areas with limited resources, spray pesticides which cause damage to soil health and ecosystems, and we transport food over vast distances.

All of this is a major driver of climate change — and most of the food this ravaging supply system produces is massively processed and bad for us. The odds are currently stacked against anyone who is trying to lead a healthy life. Meat comes laced with antibiotics, while most packaged foods contain heaps of added sugar. This has directly led to epidemics of diabetes, heart disease, and much more.

What can we do?

Encouragingly, there are reasons to believe that humanity is going to solve many of these problems and that the rewards will be monumental.

Both entrepreneurs and consumers, especially the younger generation, are more acutely aware than ever before of the climate crisis, and highly motivated to have an impact. As venture investors, we formalised an impact strategy and launched the Balderton Sustainable Future Goals. The magnitude of impact will be defined by the companies that we back. There is so much innovation going on, and while we’ve already been fortunate to back some incredibly smart people, we are constantly searching for more

In recent years, we have looked for technologies and consumer solutions addressing both the climate and nutritional crises — and there is an overlap in many cases. It’s a win-win here, in that we can look after ourselves in a better way and look after the planet at the same time.

We are backing companies that (i) help people better understand the link between food and their health, such as Zoe, the nutrition science company co-founded by microbiome expert, Professor Tim Spector; (ii) make it easier to make healthier, greener choices each week, such as plant-based meal innovator, SimpleFeast, as well as (iii) decentralised agriculture, such as Infarm and Better Origin.

In 2018, we led a Series A into Agritech company Infarm, which has since become Europe’s first vertical farming unicorn. Infarm brings growing closer to the consumer, reduces land coverage, optimises nutritional impact, and saves on water. As we said when first investing, a company growing salad may not be an obvious choice for tech-focused VC, but Infarm is well on its way to solving some of the current problems facing our society. My hope today is that Infarm will soon produce on a mass market scale, offering eco-friendly greens, fruits and more to families at a very affordable price, all grown close to the point of consumption.

Our recent investment in Better Origin, a circular systems startup creating AI-powered insect mini-farms, will see food waste transformed into feed for egg-laying hens, replacing soy-based feed. Better Origin is a great example of a company trying to find a sustainable way to feed animals. It layers in the circular economy, reduces waste, and lessens our climate impact — it’s a very neat concept.

People are not going to stop eating meat, despite its impact on the planet, so you have to find different solutions. While cultivated meat is still not quite ready for the mainstream, it has the potential to slow down antibiotic resistance, and decrease the environmental impact of the meat industry, while improving animal welfare at a large scale. With new research methodologies becoming scalable, meaning larger quantities and more reasonable price points could be reached, as well as a changing regulatory environment, we think this area has the potential to explode in the next few years. Watch this space for more news.

Biodiversity — and biodiversity impact calculation — startups are the next big area to explore. Measuring for biodiversity is still much less straightforward, but companies such as Nature Metrics are starting to find a systematic way to measure biodiversity loss, and we think accountability for this will become on par with accountability for carbon impact. For carbon accounting, we have backed Sweep which is leading the charge of bringing transparency of carbon production for enterprises across scopes 1, 2 and 3.

Venture is good at rapidly deploying money into areas with huge potential and upside. As a result, it can act as an agent of change. We are committed to playing our part in tackling the climate crisis and helping create the change that the planet — and its people — urgently need. And along the way we hope to upgrade parts of the food supply system to help solve food security and provide people with healthier food options.

I have written many times about Sujay Tyle, one of the co-founders of Merama. Sujay has many outstanding achievements in his locker, not least of which was co-founding, building and successfully exiting Frontier Car Group, where we were also investors. Sujay joined us as a venture partner in the middle of last year but we knew it would not be long before he was knee-deep in his next venture. As we had seen before, Sujay has the ability to move at lightning speed while finding incredible business partners and hiring exceptionally well. He did not disappoint when he introduced us to his new co-founders for Merama — Felipe, Olivier, Renato and Guilherme. It has been a pleasure to get to know them and the rest of the team.

As a firm, we have invested in ~20 ecommerce companies over the last 15 years and have become very familiar with what it takes to build category champions. We know this requires excellence across supply chain, logistics, back and front end technology, customer experience and support, brand, product positioning, working capital management and much more. In Europe, the market is well developed and many big ecommerce players have been crowned champions.

With Frontier Car Group we got to know the LatAm market better as they were operational in Mexico and Chile. It will come as no surprise that eCommerce penetration there is much lower than market and growth is higher (in fact Mexico was the fastest growing eCom market globally last year). Out of this, category leaders are beginning to emerge but they have typically not yet developed their tech stacks, supply chains etc to the optimal state. Crucially, it is also very hard for these players to access working capital financing and so they are often constrained on how fast they can grow. Enter Merama, who is partnering with these players (by becoming a majority shareholder) and developing best-in-class tech, marketing, supply chain management and more, allowing its partners to leverage these tools. Merama is also able to secure robust debt facilities which the partners can also access. Together Merama and its partners can turbocharge these businesses.

Merama is already partnering with players who expect to generate $100m GMV this year. They did that in 5 months. Today they announce $60m in equity and $100m in debt which will be used to go even faster. We’re excited to be partnering with Monashees, Valor, Triplepoint and many other outstanding co-investors.

Through Merama, we are watching the LatAm ecommerce market unfold before our eyes.

Event organisers have largely been stuck in web1.0. They have had to rely on third party ticketing platforms to distribute their tickets, ceding control of the relationship with their customers, relying on clunky back-end systems or often having to get customer support to process their requirements or make simple amendments, with little to no control over the presentation layer that a customer sees when buying tickets.

While other areas of online retail have been able to customise their own checkout interface through something as non-technical as Shopify or by using a headless ecommerce engine and having absolute freedom on the front-end, the event organiser has not had an upgrade for too long. Until now…

Enter vivenu who have built an API-first, headless ticketing platform that gives the event organiser complete control of every part of the ticketing experience, eg. dynamic seating plans, loyalty discounts, etc. And the organiser can either build on top of these APIs or create customised ticket landing pages using vivenu’s templates.

vivenu’s current product suite launched just as the epidemic took hold and this provided a massive stress test of the flexibility of the product. They came through this with flying colours, being able to meet multiple new use cases (eg online booking of leisure facilities which had caps on how many visitors they took at any one time) in real-time.

The company’s founders, Simon Hennes, Jens Teichert, and Simon Weber have achieved strong early success. We’re delighted to have just announced that we led a Series A financing into vivenu and support the company as they give event organisers access to ticketing solutions that give them full control and ownership of their customers. The team has delivered product innovation and commercial traction at a breathtaking pace, reflecting the type of ambition, energy and execution that we love to find in founding teams.

Ticket Upgrade was originally published in Balderton on Medium, where people are continuing the conversation by highlighting and responding to this story.

Initially the food delivery ecosystem connected dine-in or takeaway restaurants (from quick-service fast food to high-end eateries) to the delivery network in order to get food from restaurant to consumer. In the last few years various efforts have begun to set up “ghost” kitchens which make meals for delivery, i.e. they have no front-of-house dining space. This makes sense as these kitchens can be set up close to demand and have varied menus to meet the needs of different customers. But it requires finding space (not always easy to find near demand), fitting out a kitchen, devising menus, etc. and so is not very scaleable.

Overlooked in all of this was all of the other kitchen locations where food is being prepared — pubs, hotels, retail spaces, and so on. There are 100,000+ of these kitchens in the UK alone. These kitchens are rarely fully utilised/monetised and often have menus which work well for their patrons but may not be suitable for delivery customers. Enter Kbox Global. Set up by the exceptional Salima Vellani, Kbox has created a truly modern approach to building a franchise business in order to solve this problem. Kbox licenses food brands, menus, and workflow software to these businesses and integrates into their POS, connects them with the delivery networks and helps them with marketing. Overnight, a hotel, for example, can light up a suite of delivery only food brands and start earning incremental revenue. It requires no additional equipment and usually no extra personnel. This is possible by taking a software-centric approach to the franchising — remote training tools, workflow, order management, etc. Kbox also constantly monitors kitchen performance, food demand trends and develops new menus which can be A/B tested and rolled out.

Today, Balderton announced we had led a £12m investment round to help Kbox move at the speed the market is demanding. We are delighted to be working with Salima and the team on this.

It’s not every day a company closes a $500m round at an exceptional valuation. Congratulations to the whole Revolut team of 2,000+ on this incredible milestone. This is a far cry from the $2.3m “late seed/early A” round we led 5 years ago. While big numbers are impressive and this capital gives Revolut the ability to scale to the next level, I think what is more interesting is why and how Revolut was able to conclude this sort of financing round.

Before getting to that I looked back at our original investment memo from February 2015 (and this was essentially the crux of the investment thesis):

“It speaks for itself: a multi-currency credit card & app that works as a local debit card in each country and cuts out all the foreign currency fees and Forex spreads.

This is a very early stage deal — the app only launches this week.

But the guys are really smart and we believe this is a unique and incredibly compelling / disruptive customer proposition in an otherwise commoditised space.”

Image: Revolut investor deck Feb 2015

This was the nub of our decision to lead Revolut’s first institutional round which closed a couple of months later and then we went on to lead the subsequent Series A round and invest a further five times over the last five years.

The guys being “really smart” was a bit of an understatement. The two founders, Nik and Vlad, were exceptionally smart, having excelled academically and professionally and came with deep FX domain expertise and technical know-how. They also had a high level of ambition and convinced us they could overcome any hurdles to succeed.

We had seen the team present at Seedcamp but really engaged when a good friend of the firm’s told us about his experience of spending time with the team.

The initial product was focused but very compelling and acted as a differentiated way to bring people into the Revolut ecosystem. They offered customers the ability to exchange and spend currencies and pay in their local currency based on the spot interbank fx rate — this was ~5% cheaper than what most debit or credit cards would charge. Since then the team has built and launched a variety of additional products and services which their user base has adopted with great enthusiasm. These include Trading, Saving Vaults, Spend Analytics, Bill Splitting, a host of Premium Services and much more. They have also expanded out of the EEA and into several new markets including Australia, Singapore and North America.

This has allowed Revolut to be one of the fastest ever growing fintech companies. In the last year alone they trebled their user base to over 10m consumer accounts. And these users are highly engaged and very profitable.

One of Revolut’s values is “never settle”, and this is a core part of their success — no one is ever satisfied that the status quo is the best way to do things and they constantly look to make this work better and more efficiently, be that product release velocity, the hiring process or compliance and risk systems.

It has not been plain sailing and like most fast-growing companies they have had some challenges. But, as they grew, they learned, and applied their special and unique data viewpoint to every part of the business, including management. They don’t guess. They analyse exhaustively. And so they now excel at what I call “programmatic management” — a robust OKR setup with cascading KPI objectives and real-time monitoring of every part of the business. This provides company-wide transparency to each employee on what the goals are, allows for quick course correction and smart decision making. One innovation that forms part of this is removing Business Debt -which is what they call problems created by a project or person for another part of the organisation, such as excessive support tickets resulting from a feature release

Of course, as a regulated business, there is, quite correctly, a lot of focus on risk, compliance and the control functions. Revolut has been investing heavily in these areas and we are pleased to welcome several industry experts to the Board, including Chairman Martin Gilbert (founder of Aberdeen Asset Management) in November of 2019.

We have been fortunate to be joined along the way by our friends at Index, DST, Ribbit, Point9, Lakestar and many others and welcome new investors TCV and Bond (and others) to the cap table.

One of Balderton’s key beliefs is that the next European giant will be a technology company. Revolut is on its way to proving this.

Vive la Revolut(ion).

My journey on this started several years before our investment, when I met co-founder Sujay Tyle at F.ounders in Dublin. Sujay was at that time something like 17 years old. He had already at that point achieved more than most people do who were twice his age, and by the time we connected in 2016 he had graduated from Harvard, been on the ground floor at two other startups, turned his skills to the investing side of things and much more. He teamed up with Peter Lindholm (demon operator, previously building out subsidiaries of Milicom and Kinnevik) and Andre Kussmann (bringing the technical chops and some domain experience from Auto1). With this bench strength in the founding team, it was not a hard decision to participate in their seed round.

After the seed round, the team quickly went about finding local entrepreneurs in Mexico, Chile, Nigeria, Pakistan, Turkey and Indonesia who would come on board as Managing Directors for each country. They also set up a central team in Berlin where engineering, product, marketing and strategy would be coordinated. In short order by fall 2016 they had operations in each country up and running and were trading their first few cars through the platform. Shortly after that Balderton led their Series A.

Armed with the Series A money FCG was able to scale up rapidly in every market. We joined their Series B in late 2017 and they went on to close a Series C in the second quarter of 2018.

Today, in their 3rd full year of operation, the business now operates in 10 countries with 500 physical inspection points throughout cities in these countries. They are handling an annualised value of $700m in car sales through the platform and employ more than 1700 people. This has not been straightforward. The markets they are in have archaic documentation systems, opaque pricing, a lack of trust in used car transaction processes. FCG has overcome these challenges and provided transparency, trust and professionalism. They have built unique databases, car inspection processes, pricing algorithms and auction systems. They also enabled car dealers ways to scale up their businesses and generated substantial employment opportunities.

It can be hard to build operations in multiple countries, provide leverage through central technology and marketing teams, allocate capital by market, and maintain a strong sense of culture and community in the teams. Often things go wrong when you break through 100, then 200, then 500 employees and what worked before stops working. Doing this in 10 countries on every time zone you can imagine and scaling at a healthy clip makes this even harder. FCG have excelled and found a way to empower strong country leaders while making all markets part of the whole.

18 months ago, through the Series C round, we welcomed OLX (part of Prosus/Naspers) into the investor group and onto the Board. OLX operates leading classified sites across the world and the fit with FCG was clear. The partnership has been very fruitful and today OLX are announcing they are investing up to $400m in FCG, partly in primary capital into the company and partly into a tender process to acquire shares from other investors.

It has been an amazing journey working with the founders, their exceptional executive team and their tireless and passionate employees all over the world. Congratulations to the FCG team on reaching this milestone. We look forward to observing the next phase of their growth.

*Excuse the bad pun based on the exceptional R.E.M. album “Automatic for the People” released in 1992 which, of course, opens with the track “Drive”….

As we said then, a company growing herbs and salad may not be an obvious choice for tech-focused VC. But Infarm is on a journey to solving many of the current problems facing our society: bringing fresh food production into the hearts of cities, reducing the carbon footprint of transportation, providing healthy and tasty produce to customers and helping revitalise and make good use of commercial property that is falling into decay/seeing decreasing footfall.

At the time, they had a few of their innovative modular vertical farms installed in supermarkets in Berlin. Fast forward to today and the company has grown dramatically, scaling across Germany and into France, Switzerland and Luxembourg. They have expanded their range and built production hubs to satisfy demand levels that in-store farms can or satisfy. They will soon launch in the UK and other parts of Europe, and already have advanced plans to move to North America and Asia.

This is an extraordinary feat in such a short time and the combination of global reach, operational excellence and deep technology make Infarm a clear example of what European tech companies can achieve. This is what we are looking for as investors and we are happy to be supporting the companies Series B round alongside lead investor Atomico.

We are looking forward to what the next 18 months (and beyond) will bring.

Since I started working in the tech sector in 1999, the startup and venture capital market in Europe is unrecognisable today from what it was then. After the financial meltdown of 2008/9, the European tech ecosystem has undergone dramatic growth. The amount of venture capital invested into technology companies has grown from $1.9B in 2008 to $17.1B in 2017, with twelve thousand startups financed and a slew of major successful exits. Europe has become a tech-startup region to be reckoned with.

One of the leading indicators we look at for the growth of the European venture ecosystem is the number of companies that have raised more than $20m cumulatively. While a simple measure, this capital threshold is a good litmus test for the health of a business: those that have passed it tend to have achieved a proven and scalable business model. It is a positive signal indicating investors believe these businesses are onto something big and the team is in place to realise a vision.

In 2008, just four(*) technology companies achieved this milestone. By contrast, in 2017, the number of companies to reach this stage had grown 22x to 89. In total over the last 10 years, 813 tech companies have joined this club(**).

Game on!

Throughout the last 18 years, Balderton has been on the journey of company growth with an illustrious group of portfolio companies. As an institutional Series A investor, Balderton stays invested for the long run and we have funds that can hold our investments for as long as it takes in order to help companies achieve a world-leading position and create giant European-born technology companies.

Growth of the European tech ecosystem:

• 2008 — $1.9Bn of venture capital invested in tech companies in Europe
• 2017 — $17.1Bn of venture capital invested in tech companies in Europe
• 2008–4 companies raised more than $20m
• 2017–89 companies raised more than $20m
• 813 tech companies in Europe have raised >$20m in the last 10 years

However, and often for very good reasons, there can be early stage shareholders who need to sell out after four, five or more years in a company. Business angels may wish to reinvest their gains into new investments. Ex-employees may need to access money to start a company of their own. Founders and employees may find life becoming increasingly financially draining, resulting in a focus on the short-term and not the long-term. Seed funds may want to realise some investments to build their track record.

These are all completely normal, and expected indicators of a maturing technology ecosystem.

But whatever the reason, we think that the pressure that may come from these shareholders looking to sell their shares can be a hindrance to a company, as well as delaying the reinvestment of capital into new company formation and initial funding.

So, in order to remove this tension and to help early shareholders reinvest their money (both of which are good for the continued momentum in the tech ecosystem), we came to realise it was critically important for the ecosystem as a whole that this be addressed in a systematic way. Up to now in Europe, while there are ad-hoc transfers of shares (secondary transactions) between two parties, there is no go-to professional venture investor that a company can turn to.

In 2018, therefore, we undertook to raise, and successfully executed on raising, Europe’s first dedicated fund to buy shares from early-stage shareholders in high-growth, scale-up stage technology companies. This fund, which we are calling Balderton Liquidity I, exists solely to acquire equity from early technology startup shareholders

Liquidity I activity will be led primarily by Laura Connell and Daniel Waterhouse

With Liquidity I, we hope to go some way to addressing the demand both from startups and from angel/seed investors for a way to realise a measure of financial gain and return pre-exit, while at the same time giving another set of European companies access to the Balderton family.

Today, that family consists of our Partners (who have themselves built many multi-billion $ tech companies), the broader Balderton team (including our exceptional Heads of Talent and Marketing, who have built invaluable resources for our portfolio to access), the 250 entrepreneurs we have backed in our 85 portfolio companies, the vibrant communities and events we curate for our portfolio, our esteemed Executive Council and of course our wider network.

We are open for business

If you are a CEO looking to find a solution for some of your shareholders please get in touch.

If you are an early shareholder looking for liquidity please also contact us as well. (But an important note here: we are committed to following up only if we get the endorsement of the company you have shares in.)

My colleague Laura Connell and I primarily lead this fund, though you can reach out to anyone to whom you are connected on the Investment team.

With the launch of Liquidity I, Balderton will have raised over half a billion dollars since the beginning of 2017 alone, and a total in our eighteen-year history of over $2.7bn. Today, there are more than 85 companies in the Balderton family, employing over fourteen thousand people in offices around the world. This new fund will help us to take advantage of new investment opportunities arising in the maturing European tech ecosystem. We are excited about the trajectory of the ecosystem, and the part we all have to play in building future European-born global tech companies.

(*) For the purpose of this analysis, we define tech as Software and Internet-powered companies, so this excludes Biotech, Consulting, Energy, Hardware, Life Sciences, Manufacturing, Materials and resources, Robotics, Semiconductors, and Space.

(**) Source: Pitchbook

Hence, we are delighted to be announcing that we have led the Series A investment in Simple Feast, a plant-based meal delivery service based out of Copenhagen. Simple Feast was founded by repeat entrepreneurs Jakob Jønck and Thomas Ambus, who my partner Lars introduced me to when they were at the start of the Feast journey 3 years ago. Jakob, Thomas and the rest of the Feast team spent the intervening time refining how to bring the very best, nutritious and healthy meals to consumers. And we enjoyed sampling the different incarnations of the product during the many times we met up — due diligence was never tastier! They have found product market fit and the product is receiving an incredible reception from the Danish market (not only from millennials who are very aware of the environmental and health benefits but also by older customers who want to explore plant-based food but are uncertain of how to bring great meals into their kitchens), the first of many geographies they will launch in. While there are many ways of getting a high quality nutritious meal conveniently prepared for you (visiting a restaurant, having it put in a box and on the back of a bicycle and delivered, getting raw ingredients and following a recipe from a meal-kit service etc) we believe Simple Feast have cracked the ideal solution marrying quality, convenience, home-eating and doing so in a way that has far superior unit economics compared to some of the aforementioned alternatives. They provide a weekly box of meals that are delivered “almost ready” — this is only possible because of their team of chefs and food scientists are able to devise recipes that can be largely prepared in the Feast kitchens but that can be sustainably packaged and survive being transported to consumers without impairing freshness and taste. The consumer just has to spend around 10 minutes completing the last stages (mixing some ingredients, heating up some items) and the result is a truly fresh, tasty, high quality plant-based meal.

Feast are on their way to building a digitally native, mission-driven, brand with their own supply chain, uniquely high quality product that addresses increasing consumer demand for plant-based meals and doing so with strong unit economics and the plan to go global. Coupled with an extraordinary founding team, this is exactly the sort of company that we at Balderton are excited to be a part of and we look forward to supporting them alongside our co-investors at 14W, Sweet Capital, ByFounders and a very strong group of business angels.

Last, and very much not least, it is with great pleasure to add that Sam Myers, who has been an invaluable part of the Balderton investment team focussed on the Nordics, has joined the Feast team.

Andy Weissman at USV wrote much more clearly than I can about this a few years ago and I keep going back to his article. It includes a perspective on how a good investor can best help the companies they work with:

“Taken a step further, I’ve always thought the most useful thing a venture investor can then do for a company is simply help them come up with that framework, that scaffolding, to throw all those choices into. And not specifically to help make the choices themselves. After all, one of the primary ways venture investors can add value is through having seen dozens and dozens of these chaoses. Presumably, we are well-suited to help determine frameworks for decision making in future, similar chaotic scenarios.”

So I was interest to read this week about Chaos Engineering which recognises that as software is increasingly built on top of a proliferation of services, databases, etc there is the possibility for a small defect in one area to explode into a major error for the overall system. I don’t think investors can help much here but it seems like some frameworks for managing these risks are emerging.

In summary, don’t engineer chaos but do embrace it.