Investing in 2020 with Carolina Brochado (Softbank Investment Advisors) and Andrei Brasoveanu…

From Excel Andre brazo vienu and your Moderator Connie loiza swarm welcome Please Hi good morning Thank you guys for joining us today Thank you Um so we're all meeting for the first Time and I thought we could do everyone Here service who wants to sort of Understand both of you better by talking A little bit about who you are what you Focus on Um do you want to start Carolina so I Know that you studied in the U.S uh yeah Yeah so hi I'm Carolina thank you again So much for having me my pleasure I'm um I'm originally from Brazil I moved to The U.S for universities spent over 10 Years in the US Have worked in in large cap private Equity have worked at a pre-launch Launch failure startup And then have spent a lot of my time in Europe which has been seven years now at An earlier stage VC called atomico Investing at series a and series B and Most recently for the last year I've Been at SoftBank Vision fund Um investing at the growth stage so SoftBank is the hundred billion dollar Fund investing in technology companies That are you know changing the way People live and I can talk about more About that later sure

Yeah so I I'm uh Andre I've been with Excel for six years Um originally from Romania spent 10 Years in the states like Carolina Studying and working in New York in high Frequency trading Um here at Excel I've been focused most Of my time in Enterprise software and Financial services and I've been very Excited to back European Founders you Know from London all the way to Bucharest at Excel we're one of the few Valley-based Venture firms with on the Ground presence in Europe we've been Here for 20 years and we really believe In having a local approach uh to our Investing Okay thank you both So currently I think Your background again is so so Interesting especially because you Studied foreign policy and international Relations at Georgetown Um and then you as you said you were With atomico whose Partners we were on Stage with you yeah I saw it so you Switched from atomico to SoftBank this Year why switch firms Um I think there's a lot of um Push and pulls with with these sorts of Things Um I think what remains true for me and Having moved to Europe in 2013 Um is that Europe is such an incredibly Exciting place right now and you know to

Be totally honest back in 2013 I didn't Totally see it but over the years you Realize how many incredible Entrepreneurs how many incredible teams And the opportunity that lays ahead and I think firms like Excel and like Atomico were Paving the path of the Capital structure in Europe which is Actually very young right yeah maybe the Past 15 years there's been VC in Europe Um and now you start to see the fruits Of that and the exits and so on so and Forth so part part of what it was for me Was actually I think there's great funds At the early stage but there's still a Lot of underfunding at that later stage And so I was really excited about doing Growth in Europe and putting significant Amounts of capital behind Founders who Want to go for the really big outcomes Right so aside from a stage early versus Later there's a lot of fascination with Soft ink I'm just wondering you you've Got an Insider's view of these two very Important firms what are some of the Biggest differences Um aside from I guess the stage like Maybe some of the processes or yeah of Course look I think There's obviously a difference in size Right Atomic owes 70 people and SoftBank Is a 500 person organization Um There is an interesting

Um Founder-led approach to both Organizations they are both very Mission Vision driven by Founders who want to Change the world and by Founders who Want to be the best at what they do Which is really exciting Um I think the one of the key Differences that SoftBank is it's a Really Global firm so we have offices Everywhere we have offices in the U.S we Have office in Asia we have offices in Europe which for me has been a really Interesting platform to see what other Great Founders are doing in other places Of the world right and then just because Of the sheer size of the organization You have a group of 50 plus operating Partners who may have really deep areas Of domain expertise like talent but also Who are helping our companies do Business development and who can look at Our ecosystem which today is over 85 Portfolio companies and make connections And win business and actually win Profitability for for companies that Cross and within that ecosystem great So you're both in town from London right Now though you're from different parts Of the world originally do you run into Each other it in deals or are your Worlds like vastly different right now Yeah I mean I would say we have quite Different Focus areas so we we're very

Much early stage focused series a is our Sweet spot Um and you know some of our companies When they get to that very mature stage May benefit from from working with SoftBank okay great we try to stay very Close to the great companies at Excel so That they'll nudge us when uh when it's Time Um so I'm just wondering who else are You seeing uh come into deals maybe who You might not have when you Joined excel in 19 or I'm sorry 2014. Yes it's very interesting we Um you know even since I joined Excel The the quality of institutional Investors in Europe has increased Dramatically Um so we've seen Um Quite a few Um you know former operators for example So a very um Successful Founders who are now starting And starting their own funds we've seen More you know family offices enter enter The industry or U.S capital in the Market and in general I think that's Helped you know raise the bar in terms Of the the quality of capital available To to Founders across Europe and um you Know many of these folks especially the Local players have been good partners For us great and I talked to some VCS

Yesterday and they were saying much more Money is coming in from China I saw I Don't know if it's closed but I saw Bob Dylan was forming a 400 million dollar Fund to invest in Europe are there other Sort of parts of the world that are Um sort of you're seeing Yeah I I think everyone is interested in Europe and I think it's a testament to The growth of the ecosystem yeah I think We've seen unprecedented Um create company creation and a cohort Especially technical Founders who are For the first time Be managing what's possible and and Really pursuing new Ventures so it's It's only natural that we see the same Level of interest and investment as the Us or China sees what about corporates They've like taken over are investing in The U.S is that happening here to the Same degree to a lesser degree yeah no Absolutely and I think what's really Exciting to see is I think it used to be The case that Founders had to take Flights and go cvcs they had to go to The valley or they had to go to Asia and Actually now I hear stories about VCS Chartering planes to go to remote areas In Europe to meet you know a really Exciting company right and I think that Corporates are Very sophisticated in what they do in Their areas of domain expertise and are

Spending a lot of time and are spending A lot of that time early with companies Seeing how they develop early on maybe Co-investing helping them with Partnerships and relationships and I Think you know in Europe you have really Big corporates as well from Europe as Well as the ones from Beyond and Increasingly there's an interest in Spending time with with the the Innovators in the in the specific spaces Okay great great Um so we're here in Berlin huge Hub I Interviewed Clarin as CEO yesterday They're opening a an actual like Tech Hub Um here to employ 500 people I'm just Wondering what other parts of Europe are Kind of like bubbling up I mean everyone Says everything is on fire but Um more specifically where are you Seeing um more sort of Founders Coalescing yeah sure I would say it's Quite interesting so outside of the Let's say obvious ones like Berlin Paris Stockholm at Excel we've been probably The largest software investors across Europe over the past decade and many of These companies especially given the Technical universities uh pop up from All over the place right so we've backed Amazing companies like uipath in Bucharest or humanaris or salonis in Munich and we see quite a few quite a

Long tale of um really interesting hubs With quality Talent where companies Emerge from which also points to why Europe is so hard to cover off the plane And you need a very strong local network Um and you know be here on the ground to Find and support these companies early On And you're here today in Berlin tomorrow You're off to Spain to see one of your Portfolio companies what about you what Are you where are you seeing um yeah I Completely agree with that I think the Interesting thing about Europe and There's some huge benefits about the the Synergies and being part of Europe but Europe is made of many different Countries and actually one of the Interesting things when I was reading The state of European tech report is That there are billion dollar companies In 20 countries across Europe so again There's there's enormous amounts of Success everywhere I think one of the Areas we've been spending more time on Outside of the obvious you know places Is is in Eastern Europe Um where I think there are there's a lot Of talent Um and there have been big Winners Already Um and you're starting to see increasing Activity of new business models or very Interesting technology in some of these

Different places right and you must have Sort of special insight into that having Yes I know I've I've been there for 18 Years and I go back with pleasure so That's terrific okay so for the founders In the audience Excel series a uh Specialist what are you looking for what Do you need to see to write a check We're very long-term focused so we're Really we love backing original Founders Um folks who have very bold ideas and we We open our doors as soon as Founders Are ready to work with us and um you Know we're we're support Founders for 10 Years plus Journeys and we have the Ability to support them from series a to IPO what do you need to see in terms of Maybe of traction in terms of Revenue Users more specifically yeah we've been Very flexible especially because there's No one-size-fits-all form you know for Successful companies and many companies We back our pre-revenue or even Pre-product Um and what we seek is a very unique Market Insight a very Um strong team a strong team doesn't Have to be repeat team or very Experienced team with back many teams Out of college but just Founders to have A very unique approach to attacking a Very attractive Market okay Okay in Carolina You think the the initial message is the

Same we're looking for Teams that I have technologies that are Disrupting a specific sector we love Large sectors that are undisrupted by Technology because we believe that those Of the you know large impact right Fintech Logistics Mobility real estate And so on Um we do invest a little bit later at The growth stage in larger quantums of Money so we expect the core engine of The business to be working so we expect That there to be you know proven Economics on the most mature Market if It's a Marketplace or part of the Business Or you know early Lighthouse customers So there isn't necessarily a parameter On what Revenue needs to be Etc but you Do need to show that the capital you'll Be using for growth as opposed to Finding you know product Market fit Right Well I have to ask you because you're With SoftBank and SoftBank again my Fascination for a lot of people Including I'm sure in this room I'm just Wondering if anything's going to change So it's had sort of a rough last six Months uh it looks to have made a big Bet on Uber that it looks like it's Overpaid right now Um we work looks like it overpaid right Now wag

Um it sort of you know parted ways with Amicably after investing a lot of money In the company your CEO masa's son had Said recently Um he sort of attributed it to um he Said there was a problem with my own Judgment that's something I have to Reflect on Um is the mission going to change the Mandate the sort of scope anything going Forward in 2020. look it's um it's the Question on everybody's mind so I'll try To address it Um the mission of investing in great Teams in mission-driven companies that Are changing the way people live will Not change Um and I think I really appreciate the Fact that you said right now because SoftBank and and Masa himself they're Very long-term thinkers right and I Think hopefully the message that you Know is that Founders took away from Wework and the way soft think behaved Um you know after the the IPO didn't go Forward is that we really will work with Founders for a long time right and we Will hold you know stock in the public Markets because we believe that you know This is a 10 20 100 Year Vision Um and so if we believe that a company Will change that sector we will commit To that right and I think luckily we Have the amount of capital where we have

The ability to do that so we won't be Kind of you know fair weather investors We're really there and we have the Infrastructure and the capital to to Support these companies through thick And thin well I wondered too if you want To sort of address the Narrative widespread perception that Vision fund might not be able to raise a Similar size fund so you right now you Have a lot of resources you've deployed A lot of those resources so again what Happens in 2020 is it going to be a Smaller fund so I can't really comment On the size of the fund I think um We have a really strong relationship With our LPS it's a really close Relationship Um and they're also aligned on on the Vision of the fund I think on an Execution level we both spend there There's going to be a lot of attention Now on things like governance and on Things like unit economics which I think Is actually really healthy and really Positive Um and the vision fund is two years old Um and people sometimes forget that yeah Absolutely Um so so I think there's a lot of Learnings there is definitely going to Be a way forward And the mission will remain the same One last question yeah

Um You talked about your LPS one of these LPS your major LP in the vision fund Saudi Arabia Um There's been a lot of sort of concern About Saudi Arabia the Civil War in Yemen this Washington Post journalist Who was murdered Is Vision fund is the relationship with Saudi Arabia changed do you have any Qualms about Deploying money on behalf of Saudi Arabia look I think Masa has spoken About this publicly right and about what A what a terrible tragedy that was right Um and the fact that of course SoftBank Doesn't condone violence in any way Right what SoftBank is trying to do is Use Capital to bring technology to areas Of the world that might not have access To that kind of deep level of technology And so the effect that soft being is Trying to have with that capital is Actually quite positive Um which you know I think maybe is a Message that sometimes gets missed and You know if you meet Masa he is a very Inspiring guy and that really is his Life mission and that really is the Legacy that he wants to to leave you Know even Beyond himself Oh Andre I have to ask you you know so In in the U.S SoftBank is sort of the

Bull in the china shop aggravating a lot Of investors changing things driving Evaluations in many cases or it has been In the last couple of years how is how Is SoftBank viewed by Excel Yeah I would say I mean many of the you Know broader events uh definitely shed Some You know more focus on on running Businesses effectively I would say Whether it's good you know lean times or Bad times we've always been very focused On building a long-term sustainable Business and helping Founders Um focus on the long-term price and I Think Um you know certain situations you know In recent times have um you know helped Shed more light and kind of focus on Having good operational metrics and and Pass the profitability long term Um but I would say it doesn't quite Change what we do we've always been Focused on The you know building something that's Long lasting Um yeah for for a generation Um before we go I did want to ask you And I talked to some of the investors on Stage about this yesterday but Um You're obviously going through a lot in London right now Um well specifically today this

Election's happening uh I'm wondering um How does what's happening in the U.S Impact what's happening here Um is there a sort of is anyone are you Seeing more people come to Europe Because maybe they're trying to flee the Us or less inclined to move to the U.S Uh who might have moved there at an Earlier point in time just because Things are kind of you know Yeah it's interesting for us we kind of Look back and pretty much in every Single year you know we've had major you Know Billion Dollar Plus companies Um being founded and many of them which We've backed Um and I think some of the best Entrepreneurs Thrive through times of Crisis or or Thrive uh times of big Macro uncertainty specific around the US Many European companies we work with Have very Global Ambitions and for them The U.S market continues to be critical So regardless of the the regime or or Kind of the Yahoo may be in power will Still encourage many of the companies we Work with especially in Enterprise Software to build routes in the US Quickly and um yeah pursue them Aggressively and then in terms of We were talking backstage about this If Boris Johnson and the conservative Party wins brexit is Likely to happen and possibly soon what

What I know it's probably too soon to Know what's going to happen obviously But I mean anecdotally what are you Seeing are fewer people setting up shop In London do you feel like it's already Been sort of you know It's hard to tell I think it's um It's been happening since 2016 and so I Think the and I think what Andre said is Is spot on which is that entrepreneurs And dynamic teams are by Nature they Thrive in in these times of uncertainty They innovate and I think what we've Seen is a lot of Founders have had the Time to kind of hedge if there is any Any risk in any of those parts of the Business Um and and are staying ahead of that I Think there may be effect an effect on Talent so perhaps people who would have Started a company in London now started Elsewhere Um but it's also true that there's still Um big centers of excellence in in the UK you know places like Cambridge and Oxford and Imperial where there's a lot Of innovation coming out of those places There's still money so I think it's too Early to to have any data to back any of These things and we'll just have to see How it plays out great Andre you agree Fully agree great thank you both so much Really appreciate you coming thank you Thank you thanks everyone

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