Doing our job while weathering the crisis
As for everyone else, this troubled period has been intense at Elaia. However, we feel very lucky to have been able to keep working with awesome entrepreneurs and close a good number of great deals. We’d love to share the good vibes here, and to thank all the entrepreneurs who are braving these rough times.
Yes, it has been tough; and no it’s not over. However, it has also been an interesting and fruitful period. Entrepreneurs never give up and, whether struggling or thriving, startups are still alive and fighting! Now that summer is upon us and hope is back (please all keep being cautious and safe however: we don’t want a second wave), we wanted to share the faithful and transparent version of what happened for us these past 3 crazy months.
Let’s start with the facts:
March 2020: 6 investment committees with approval to issue term sheet.
March-June 2020: 8 deals closed (learn more below), 2 deals made 100% during the Covid, 0 deals dropped & a new term sheet signed.
1/ We did our job: Backing tech disruptors (remotely)
Same same
As Warren Buffett said, “It’s only when the tide goes out that you learn who’s been swimming naked.” And since March 2020, the tide has gone out like never before: we can expect that some investors might have to leave the floor.
At Elaia, we continued doing what we love: backing tech disruptors. Obviously, we spent a lot of our time fighting fire alongside those of our entrepreneurs who were the most impacted within our portfolio entrepreneurs. On top of attending every specific situation on a case per case basis, we shared some general direction : SOS Crisis: Love ❤️, Wisdom 🤓 & a Playbook 📕. We also financed a few bridge rounds but overall close to all our portfolio companies are safe.
Nevertheless, the entire team also spun-up furious efforts and time to continue discovering and engaging with new startups too.
But different
However, we had to change our processes and prepare for a new normal. This meant:
1/ Doing deals remotely while keeping it nice & smooth for the entrepreneurs
The tools we regularly use played a critical role in redesigning our internal processes to be able to embrace deals remotely. Luckily, investing in tech means our entire team and processes were ready and operational for distributed work.
2/ Adapting the terms, they can’t be as favorable as they were 6 months ago
In order to be sustainable, Venture Capital must yield repeatable performances; which means regularly backing the best entrepreneurs, at the right terms. Read more in our previous article about how crossing a crisis impacts the performance and the timing of the fund.
In these unprecedented times with a blurry and uncertain future, we needed to sometimes adapt our deal terms ; we did it in a fair, transparent and minimal way, as the entrepreneurs themselves did adapt their plans. And as a result, we managed not to lose any of the 8 deals we made in Covid times.
We also asked the companies to be more prudent in their business plans and to prepare several scenario for their post-COVID development. By the way, we asked exactly the same from our portfolio companies too!
3/ Exploring the sectors that are eating the world
Our best prediction for the future is that it’s mainly unpredictable. However, it is safe to say that some sectors have been nastily impacted (airports, hospitality, restaurant, IRL entertainment, physical retail etc); others are just in slow motion mode; and some will actually benefit from the crisis: the digital transformation of the corporation now appears as mandatory, FinTech is thriving, eCommerce and Retailtech accelerate, Digital Life Science is the future of health and the underlying Cloud Infrastructure and associated tech (devops tools, cybersecurity, etc) which sustain the digital economy become more critical than ever.
We have been and will continue hunting these sectors, that we already loved, as you can see here below:
2/ Weathering the crisis with smooth remote processes
We have always articulated our investment thesis around 4 key elements:
Here are the stories of recent investments made in Covid times. As you will see they are very different — in terms of sectors, stages and teams. Entrepreneurs, thanks for letting us be part of this awesome adventure!
The Hotels Network helps hotel brands grow their direct channel thanks to predictive personalization which enables hotel website users to enjoy a better booking experience and hotels to fuel their direct booking growth. Back in February, we lead their Series B. Our investment thesis stands on:
1/ Team : A complimentary team combining knowledge of the travel industry, performance marketing and entrepreneurship.
2/ Product: Must have, the usage of their product by their clients increased of 120% during the first weeks of the crisis.
3/ Market: Huge! The global market estimate is between 1.2 and 4 billion dollars.
4/ Business Model: A proven Saas business model with 5000 hotel customers in 96 countries.
On top of:
- Exceptional execution with low cash consumption
- Ambition: become a major global player in the hotel tech industry.
We are convinced that THN will be even more of a must have post crisis for the hoteliers!
Fun Fact: THN and the Elaia team haven’t had a physical board yet!
When everyone left the table, we stayed and picked up the phone. That’s how, we managed to take the lead of the specialist platform for multi-currency transaction’s Series B while we were meant to be on a jump seat at the beginning.
Our investment thesis stands on:
1/ Team: A serial entrepreneur with an awesome track record and domain expertise that made a strong impression and a both experienced and impressive team — particular praise to the customer success team for the unique experience their create for their clients — always the greatest asset of any Company!
2/ Product: An intuitive platform for international payment.
3/ Market: A €10 billion market and that’s only in France! so imagine a €200+ billion market worlwide.
4/ Business Model: A competitive transaction field with over € 1 billion monthly paiements with customers all over Europe.
On top of:
- Metrics: A 3 digit growth since inception (sorry we can’t share much more; but the execution so far has been stellar)!
- Covid: A crisis resilient activity.
- Ambition: The ambition to become a reference in financial services for companies with an international activity.
Fun fact: During the Zoom Investment Committee, Pierre-Antoine Dusoulier was wearing a suit and a tie (that was the only part we saw) and a swimsuit below!
This deep tech startup is building the world’s first universal error-free qbit, which is the basic component of the quantum computer.
Quantum Computing is one of the must followed tech trend of the day; not a week without a Google, IBM or Honeywell announcing a record breaking, mind-blowing achievement — the very term of quantum supremacy was not ill-chosen! But who really knows what it entails and how far from a business reality we are? Thanks to our academic partners and our long term love for deep tech, we were able to understand Alice&Bob’s technology, their challenges, their objectives, and how they could change the face of tech.
Our investment thesis stands on:
1/ Team: A complementary (awesome) research team.
2/ Product: Alice&Bob’s mission is to solve quantum errors and their first prototype has already reduced their rate of occurrence by a factor of 300! We’ll let you image their ambition!
3/ Market: A huge market of €400 to €800 billion.
4/ Business Model: There is no doubt that when developed the qbit will sell easily.
On top of:
- Deep Tech: French academic excellence at the heart of the project with 6 academic laboratories (INRIA, ENS Paris, Mines ParisTech (within the Quantic team), ENS de Lyon and CEA) supporting the project.
This deep tech startup based in Rennes is on a mission to make live video streaming over the internet more reliable and cost-effective, while improving the user experience. Our investment thesis stands on:
1/ Team: 4 deep tech & serial entrepreneurs who have been working together for ages!
2/ Product: A tech to allow the next Netflix to happen, based on a highly innovative product with numerous patents to make live streaming tomorrow’s television.
3/ Market: The addressable market is huge with the mass increase for video content, on-demand, even for live. Finally, their cloud-native solution, built to run on the edge (closer to the end user) perfectly fits with the current cloud trends.
4/ Business Model: Already 4 large customers validating the future market.
On top of:
- Impact: reducing the carbon footprint to the bare minimum needed to stream live events to a massive audience.
- Use case: 2024 Olympics in Paris will be the first event where the streaming audience is expected to be higher than traditional broadcasting.
Shipup is on a mission to maximize customer retention from purchase to delivery. Our investment thesis is based on:
1/ Team: A complementary and execution-focused team that has managed to get impressive metrics in just 2 years.
2/Product: A software product that clients don’t unplug — even in times of crisis!
3/ Market: A humongous market! E-commerce prevails throughout the crisis and will drive the growth of Shipup.
4/ Business Model: While annual growth in e-commerce was already very strong before the coronavirus crisis, at 15% per year, Shipup saw orders from its e-commerce customers increase by 40% in April 2020, during the lockdown, compared to April 2019.
On top of
- Metrics: Over 200 clients worldwide, Shipup tracks several million online orders per month.
- Ambition: Become a key player in the post-purchase experience.
Fun Fact: Small world, two of the cofounders were in class with our CMO!
inHEART, improves the treatment of cardiac arrhythmias (heart rhythm disorder) thanks to imaging, AI & digital simulation. Our investment thesis is based on:
1/ Team: An experienced and complementary team of scientists, health professionals, and executives.
2/ Product: Cloud-based medical image analysis solution for cardiac interventions on patients with arrhythmias.
3/ Market: A 5B€ market that includes healthcare giants such as Johnson & Johnson, Abbott, Boston Scientific or Medtronic.
4/ Business Model: classical & proven software for medtech play.
On top of:
- Metrics: Already 2000+ patients in over 40 centers around the world.
- Deep Tech: Based on the research outcome of top-tier institutes in cardiac electrophysiology (IHU) and computer science (Inria).
Honing Biosciences’ mission is to develop and improve cell-based therapies. Our investment thesis stands on:
1/ Team: Scientific founders that are recognized worldwide for their expertise.
2/ Product: Their product has numerous use cases from immunotherapy of cancer and other chronic diseases.
3/ Market: Booming international market with billions of euros of investments.
4/ Business Model: A technology licensing business model well established in the sector
On top of:
- Deep tech: This life science deal is a spin-off from the Institut Curie
- Impact: A our portfolio company that can say that it will help save lives
Fun Fact: Franck Perez and Franck Lescure could have meet years ago as their wives know each other and so do their kids!
We also welcomed another non disclosed (yet) deal in the FinTech space.
😍 We are super happy that all these amazing entrepreneurs joined the Elaia Family 😍
So what is next?
Everyone is wondering what will happen next and no one knows. But if we take a step back: could tech be the next Gold Standard? We strongly believe it at Elaia and that’s why we will keep raising funds and backing tech disruptors to surf this wave.
Thanks to Marc Rougier, Samantha Jerusalmy & Xavier Lazarus for their precious help in writing this article.
🙏 If you liked this article, feel free to clap, follow Elaia and share it! 🙏
