The post Investor insights from Thomas Padovani appeared first on Bellone Invest.
]]>A Funderbeam exclusive interview with Thomas Padovani. He is an entrepreneur and investor. Thomas co-founded the Webinfluence Group in 2007, then went on to found the globally successful online media advertising platform Adcash. Stepping back from the Adcash CEO position in 2018, Thomas now focuses on building and investing in new aspiring startups with growth opportunities. Now he is a lead investor for Punch Drinks funding campaign.
As an early stage investor, what questions do you always ask when looking at a business and its management team?
The thing is that I have been through the same stage as they would experience during their growth, therefore it’s quite natural to ask yourself what I would do if I would be in their shoes at the moment. Seeing similarities, affinities, or familiar behavior is something that would make you confident to make the investment.
BUT! That’s not enough, bringing things too close to your heart will lead to emotions. Emotions are very important; but decisions resulting strictly from our emotions can lead to mistakes. This is what Elon Musk calls “wishful thinking”.
More rationally, going through these stages also brought me a lot of experience that I’m using to understand, in a better way, the challenges that the team will face.
Sectors are different; but challenges can be categories in the same way. The industry, the people, the regulation, the trends, and the economic situation. Financials and business plans are important in the rational part of the decision making.
What is the biggest lesson you have learned in investing in early-stage companies?
Two words, “Human factor”. Focusing only on the potentials that the market is giving or the financial data at a certain point give a shortened and misleading overview. Bottom line the humans behind the idea, concept, businesses are the ones that will make the mistakes, and there, nothing is taken for granted. Pick the right humans with the right ideas.
Are you sector agnostic when it comes to making investments as long as they meet your criteria?
We have usually a preference for SaaS and Softwares, but we are looking as well in a wider range of opportunities.
What is the tipping point to you when you decide in favour of investing?
The momentum is basically between Company potential/growth versus current valuation.
Can you tell us about some of your favourite companies in your portfolio?
What areas do you think will present the most opportunity for early-stage investors over the next 18–24 months?
Softwares, health, entertainment, finance.
Where are you seeing the most exciting early stage opportunities? What are the ‘ones to watch’/ most currently underrated?
Estonia provides quite a lot of opportunities for investors in different sectors.
What are your fears as an investor?
Human Factor as described earlier
A book to read or a blog or podcast to follow…
How did you discover Funderbeam?
Through media coverage and successful fundraising of the start-up that was looking at.
What is Funderbeam to you?
A good tool for a start-up to get known and raise funds.
1) If you could be a founder/CEO of any company in the world, what would this be and why?
IKEA, because the model is close to perfection.
2) Would you like to win the Nobel prize, Oscar or Olympic gold medal? Why?
None of the listed above but 1st position at 24h of Le Mans would be a great achievement.
Why? Because after all we love winning and all entrepreneurs must be competitors in their soul.
3) If there’s 1 question in the world where the universe provides you the correct answer, then what would this question be?
What happens after we die.
1) What’s your superpower or secret sauce, how do you help your companies?
As an investor, we must first help people not investing in companies that we believe will not work. It saves time for every one.
Otherwise, when we invest in a company we share our contacts, experience, and whatever is necessary but we don’t interfere. We provide the fuel when necessary the engine is the team.
Article source and credits by Funderbeam. Visit the original article here
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]]>The post Adcash founders invested in Estonian beverage manufacturer to produce disinfectants during the crisis. appeared first on Bellone Invest.
]]>Estonian beverage manufacturer Punch Drinks started manufacturing disinfectants in order to help contain the spread of COVID-19 virus in Estonia. The sanitizers are available in e-shop, Bolt Food and soon pharmacies across Estonia.
„In the light of the corona virus we decided that it is our duty to help our country and people in these difficult times. We had the production capacity and capability, so shifting temporarily our strategy seemed the only reasonable thing to do,“ said Kristjan-Walter Kask, the CEO of Punch Drinks.
Punch Drinks, whose main products are organic craft soft drinks and cocktails, quickly familiarized themselves with the regulations and requirements needed for the disinfectant manufacturing and rearranged their current production processes. “We didn’t hesitate in the production for a second, but were dependent on how we could obtain the needed permits and certificates. We’re glad that the Health Board was on board from the minute we contacted them and fastened the bureaucratic processes to issue the certificates,” explained Kask. He added that Punch Sanitizers are officially approved by the Health Board, for which the biocidal product registration has been issued.
Entrepreneurs share the responsibility to help during crisis
To increase the production capability, Thomas Padovani together with the Webinfluence Group and Bellone Invest made a quick investment decision, when heard that Punch Drinks wanted to expand their activity. “I strongly believe that all entrepreneurs have a responsibility to help to fight this virus, if possible. We appreciate Punch Drinks’s commitment to contribute to the community and safety of all of us,” explained Thomas Padovani. He added that even though they currently invested to help to increase the production of sanitizers, they see great potential of Punch Drinks becoming a strong player. “The ambitions of Punch are strong in our region. There is a clear market demand for organic crafted drinks elaborated by top bar tenders,” noted Padovani.
Padovani brought out that during the crisis they try to be there for all their current investments and partners to go through the crisis together. “Nobody knows at the moment how deep the fall will exactly be. One could never imagine that the world and economy could be paused like this, so this is completely a new situation. Therefore, we do our best to help to ease the situation for our partners,” said Padovani.
Available in e-shop, Bolt Food and pharmacies
Punch Sanitizer antiseptic sprays effectively kill bacteria, yeasts, mold and viruses. In addition, the product is colourless and fragrance-free, and suitable for both professional and home use. “Today we are able to produce around 4000L of sanitizers a day, but we hope to increase that up to 6000L a day. We do our best to ensure the supply of raw materials, which is very unpredictable in today’s circumstances,” said Kask.
He noted that if they find a partner abroad they could also start exporting. “At the moment we have the biocidal product permit only for Estonia and currently there is no single Estonian company who has been listed as biocidal producers abroad. If we find a partner, who would have needed licenses, then we would be ready to export,” explained Kask.
Currently the sanitizers are sold in Punch Drinks e-shop in different sizes and quantities, but soon also available in Bolt Food and pharmacies. “We have sealed a deal with Magnum Medical, which means that our sanitizers will be available in pharmacies across Estonia. We’re actively searching for new retailers to make the product available to all citizens and companies in need,” stressed Kask. He added that their goal is not to earn easy income during the crisis and therefore have kept their pricing reasonable and competitive.
Additional information: https://punch-drinks.com/sanitizer
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]]>The post The booming Baltic startup scene appeared first on Bellone Invest.
]]>Across the Baltics, over €1.5 billion has been invested since 2013, as a result of several large VC rounds such as Bolt, Citybee, Monese, Vinted, Pipedrive, Starship. And its showing a substantial growth since 2013.
Venture Capital investments average growth from 2013 has been rising +88% in Estonia, while Lithuania’s growth rate is booming with +135%. Latvia is still in very moderate stages regarding startup growth and VC investments, compared to Estonia and Lithuania.
By invested venture capital, Estonia is still ranking #1, with €1,173B, while Lithuania is ranking #4 with €375M, according to the latest report.
The Baltic region has created one third of total unicorns in Central & Eastern Europe, and 3% of unicorns in total Europe, worth a combined €12 billion. Estonia is leading the way in Baltics, with 4 unicorns: Bolt, TransfereWise, Playtech and Skype. While Lithuania has just crowned it’s first Unicorn Vinted, who raised €128M in a funding round that valued it at more than 1 billion euros, making it Lithuania’s first tech unicorn.
“For investors, it is surely interesting to keep a look-out to the Baltic and Northern European countries. Estonia has created a strong and proven track record of successful startups and is still strongly moving forward. But it is worth mentioning to keep a strong eye on the other booming countries, such as Lithuania and Latvia, who are showing a growing number of rising stars”, says Thomas Padovani from Bellon Invest.
The investments into Estonian startups are still strongly on the rise and the proven track record of creating internationally successful businesses, creates trust for future growth. “Of course, as the first digital nation on the planet, this also creates extra buzz and attracts more interest to look into Estonia,” says Padovani.
It is already clearly seen that the interest from foreign Investors is increasing in Lithuanian tech startups, especially from Western Europe and the USA. Like Estonia, as the leading country of digital technology and startup business scene, Lithuania is also strongly rising up with their business favourable & regulation friendly environment.
For more details, take a look at the report by Dealroom.co for more insights on the Baltic countries startup ecosystem.
Thomas Padovani, after stepping down from the CEO position of Adcash, is now strongly focusing on investing in to startups all over the world through his investment company Bellone Invest, keeping a strong eye and interest on the booming Baltic startup scene. Thomas Padovani, together with Webinfluence Group, was one of the first investors to the Estonian Unicorn Bolt.
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]]>The post Uber rival Bolt launches food delivery service in Europe appeared first on Bellone Invest.
]]>Competition in Europe’s food delivery market is getting even more heated.
Uber rival Bolt announced Wednesday it will launch a food delivery service in Tallinn, Estonia, where it is headquartered. The Estonian start-up said it would expand the service to Latvia, Lithuania, and South Africa later this year before launching in more markets in Europe and Africa in 2020.
Bolt, formerly known as Taxify, is entering an already-crowded field of competitors in the European food delivery market. Uber Eats and Amazon-backed Deliveroo are aggressively expanding across the region, while Britain’s Just Eat recently agreed to merge with Amsterdam-based Takeaway.com to create the biggest food delivery company outside of China.
Bolt Chief Product Officer Jevgeni Kabanov said in an interview with CNBC Wednesday the company’s strategy with food delivery will be to build on its existing 25 million users and to offer lower delivery prices than competitors. Kabanov added the company will also pay “higher earnings for carriers.”
The company has taken a similar approach in the ride-hailing market, offering steep rider discounts and higher driver commissions. Bolt said the food delivery service would be available through a separate app called Bolt Food.
The Estonian unicorn, which was valued at $1 billion last year, currently operates in 30 countries. Its investors include Chinese ride-hailing firm Didi Chuxing, German automaker Daimler and the entrepreneur and investor Thomas Padovani.
Ride-hailing companies have struggled to cook up profits in the food delivery market thanks to high overhead costs. Earlier this month, Uber CEO Dara Khosrowshahi said he doesn’t expect the company’s Eats business to be profitable in the next two years.
“We would not do it if we did not believe that we have the opportunity to build a profitable business,” Bolt’s Kabanov said.
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]]>The post Year 2018: Records for the Estonian startup sector & support of the ecosystem appeared first on Bellone Invest.
]]>There are currently around 550 startups in Estonia from a variety of sectors including Fintech, Greentech and beyond. While looking at the main indicators – number of people employed (3763 in 2018), employment taxes paid (46M EUR in 2018) – we are seeing a steady 30% yearly growth in the sector.
The top 20 startups in Estonia account for an astonishing 62% of the new jobs created by startups in 2018. TransferWise has been the biggest recruiter (+239) followed by Bolt (formerly Taxify) (+92), Monese (+57), Veriff (+54) and Pipedrive (+53).
Another important element of a successful startup ecosystem are investments. Since 2010, the proportion of investments raised from abroad for Estonian startups has been growing year-by-year, reaching the highest percentage in 2018 (96.3%). The increased interest of foreign investors confirms that Estonian startups are being noticed globally, we have a strong startup ecosystem and a credible, transparent, business environment.
In 2018, investments into Estonian startups have, for the first time, exceeded 300M EUR, reaching 328M EUR announced publicly. By far the biggest investment (150M EUR) was made into Bolt (formerly Taxify) and that investment round upgraded Bolt to unicorn status. Bolt was followed by Pipedrive (43M EUR+8.7M EUR), Monese (51.6M EUR), Starship Technologies (21.4M EUR) and Realeyes (13.5M EUR). So far, Estonia has produced four billion-dollar unicorns: Skype, Playtech, TransferWise and Bolt as well as a dozen other startups valued over 100M EUR each.
Estonian startup ecosystem might be small but it is very international. The key role of increasing the international community over the past two years has been performed by the Estonian Startup Visa. The Startup Visa helps non-EU founders grow their startup in Estonia and it also makes it easy for Estonian startups to hire non-EU talent. In the first two years since the launch, 1108 applications were received from more than 80 countries and 931 people altogether have relocated to Estonia or been granted the right to do so. Although we are expecting more and more founders to find their way to Estonia and become employers themselves, it is clear that the need for talent in Estonian startups is growing significantly. 2018 was a record year of investments in Estonian startups; the funds are directly connected to the increase in available jobs. There are jobs available not only for developers but also marketers, sales people, customer support, designers, etc.
A huge role in the development of our startup ecosystem is played by organisations and service providers who support the growth of our startups. At the end of 2018 we counted 103 such organisations, meaning we have roughly 1 organisation per 5 startups! The ‘’by-product’’ of support organisations is a strong giving-back mentality within its network of mentors, with entrepreneurs who have been active for more than 10 years in Estonian startups like Fortumo, TransferWise, Bolt, Starship Technologies and Pipedrive. The strength of our ecosystem is definitely its people – thought leaders who help to shape the ecosystem with new endeavours.
Source: Invest in Estonia
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]]>The post Estonia’s Bolt (former Taxify): A licence (not) to drive appeared first on Bellone Invest.
]]>“We might have decreased the number of old-school taxi call-centres − meaning dispatchers and taxi company owners − but we have given tens of thousands of drivers an opportunity to offer their services on our platform,” says Markus Villig, the CEO and founder of Bolt (Taxify), a ride-sharing platform that now operates in 20 countries in Europe, Africa and South America with 100 000 drivers and 4 million passengers signed up. Taxify recently announced funding (of an undisclosed amount) from Didi Chuxing, the world’s biggest ride-sharing platform that forced Uber out of China.
Markus and his colleagues can now use the knowhow and the tools provided by their Chinese investors while not leaving their main office in Tallinn, which is based in a recently renovated art nouveau-style limestone building that housed a furniture factory for the best part of the previous century. “We really needed extra space and that was almost the only office of that size available in Tallinn,” Markus explains in his usual modestly self-assured manner.
It’s lunch hour in their office and a buzzing group of young people gathers in the kitchen on the first floor, bringing their meals in from a canteen next door. Looking around in the room it’s obvious that I’m the oldest person in the room as the average age of Taxify employees is about 28-29. “But now we actually do have people younger than I am,” Markus adds. Just to make it clear: he is 23.
In a year they will move a few blocks down the road to a new building, that will be located right next door to another Estonian-born international superstar, TransferWise, which just recently announced a whopping €240M round on top of its previous investment rounds. “As compared to TW, we have been super-efficient in our growth, having made it so far with only €3M,” Markus comments. Taxify probably better deserves a comparison to Uber which has raised €10B. “Compared to them, TransferWise is still very efficient,” Markus remarks.
As to the current employee-count, Taxify’s General Manager Riina Einberg has to look up the most recent number: “We have been adding up to 20 people per week.” The count comes to 320, 160 for Estonia and the same for another 19 countries and 25 cities. There are 30 nationalities in the Estonian office alone.
An early start
One might think that Markus is too young to have pulled off a company of such a multinational scale but he’s actually no rooky in the startup world. In 2010, at the age of 16 he − accompanied by his father Tiit − attended the first ever Garage48 event in Tallinn, which was organized by his older brother Martin who was then working for Skype. Markus happened to be in the same team with Skype founders Jaan Tallinn and Ahti Heinla, and although nothing came of their baby-name-generating app Namefy (other than the ending of the word −fy), he had already lost his soul to entrepreneurship.
In 2012, his brother Martin was organizing another Garage48 event in Kyiv, Ukraine, and tried getting a taxi online, which turned out to be quite a hassle. He then came up with the idea of how to make ride-sharing much easier. Markus picked up the idea and plunged into it. According to his own account, he discovered he had a lot of time on his hands during his high school final exams so he decided to build a platform to ‘get this taxi business in order in Tallinn’. There were 30 taxi companies in Tallinn at the time, all operating on old school call-in devices, with an operator, misogynistically referred to as ‘a Kitty‘, mediating the rides from a central station.
The early start was quite promising. Markus did a Google Docs survey in his school to which he received 600 answers, 90% out of which responded that there is an acute need for a new taxi platform. Nobody had even heard of Uber yet.
Markus started going through the taxi stops and things started going a bit astray: “Of course I had no platform to show yet and being a 19-year-old kid disturbing the drivers from reading their newspaper…” 8 out of 10 taxi drivers would yell at him to get the hell out of their cars. Markus could hardly speak any Russian and that was an obstacle communicating with drivers.
He soon realized that his initial budget of 200 euros was simply not feasible to actually develop a platform. A developer he had found ‘somewhere from the city’ was asking for 7000 euros for a prototype.
He turned to his parents who finally gave in to his pleas and lent him the money they had set aside for his studies at university. “It’s up to you now, what you spend this money on,” they said with a heavy heart. His mother Reet helped a lot with the early sign-ups of the Russian speaking drivers and to this day she keeps in touch with the company, now taking care of the office plants.
Bumps on the road
Other than strong support from his family, it was all downhill for Markus. “We had no money for marketing so we sent press releases to all media outlets in Estonia saying that a 19-year-old is trying to shake the taxi industry in Estonia and luckily it worked, we got our first stream of customers. But the first prototype was full of bugs, drivers who had shared their contacts did not really sign up and people literally could not get taxis,” Markus confesses.
A lot of money had been wasted but there were no drivers and people who had downloaded the app could not use it. Business prospects seemed gloomy. Any less strong-willed person would have given up there and then. But not Markus.
“It was now or never. It was a pretty crazy month. I was working 24/7 to get it to function, learned a lot of mobile development to fix the prototype and spent the rest of the time out on the streets hiring more drivers. By the beginning of September, we had almost reached the critical mass of drivers.” That meant 20 rides a day. These days, a regular month means hundreds of thousands rides in Tallinn, which is only the 10th largest city for Taxify.
Markus had just started his studies at Tartu University and could not continue roaming the streets of Tallinn at night, harassing the leather-vest-clad moustachioed middle aged men who would much rather solve crosswords in their Wunderbaum-scented Ford Scorpios than discuss possibilities of earning extra money by offering better services to their customers with a taller-than-average teenager.
He also realized they needed a real developer. The only person who responded to their ad on php.net forum just happened to be the right person. After the first meeting, Oliver Leisalu called back a few days later and had already built versions of both the driver’s and customer’s app.
He’s now one of the cofounders of Taxify, which really took off shortly after he joined. A year into the business, big brother Martin who had so far held a supportive role also left his ‘day job’ at Fortumo and joined full time.
But the troubles were not over yet. In December 2014, Taxify raised a first round of €1.4M from investors and started developing and scaling very quickly. By March 2015, it was clear that if they keep up the same pace they would be out of money by the end of June. Revenues were still small and some countries were slow to pick up pace. “We had to cut the spending, let some people go and start raising a new round from investors who were less than willing to give us any more money. That was a very tough year,” Martin recalls.
Against all odds, they finally found a scalable model in the cities of South Africa and the company turned cash flow positive. Now, with the latest investment from Didi, they can feel “much more relaxed about spending”. Markus can finally consider actually visiting the countries they are operating in. And not just visit the offices, but get to know the places as well as the people. “What I’ve understood in my years in startup business is that good people are the same wherever you go in the world: they are open-minded, tolerant and… well, just normal.”
Going after the Big Fish
“My ambition from the very beginning has been building one of the biggest technology companies in Europe,” Markus is not shy to announce. And since the transport industry is ten times the size of the marketing sector of the whole world, this is where he sees his challenges.
“It’s only a matter of time until we break the regulations that have been limiting this industry in Europe for decades. There is simply no explanation as to why a company should pay 100 000 euros for an operating licence in a single city and then charge its customers 100 euros for a ride. It’s as if someone would charge you 200 000 euros if you wanted to become a programmer.”
The strict regulations have started to crumble state by state, with Estonia leading the way, yet they stay intact in many countries like Italy, Germany, Spain or our Scandinavian neighbours. The transport regulating office of London recently pulled operating licences for both Taxify and Uber in the biggest city of Europe.
“Uber makes €2 billion of revenue on its rides in the UK only, so probably making a few hundred million in commissions, therefore it’s no small business,” Markus explains their motivation in fighting for the change in regulations. At the time they started, he did not even regard Uber as a competitor as it only operated in a few European cities as a limo service. Things changed when Uber raised billions in investor capital.
Transport is usually considered to be a very local service. Markus brings a recent example when the Kenyan press proudly announced that a Kenyan company raised an extraordinary investment from a Chinese investor. That company was, of course, Taxify.
What to disrupt next?
Riina Einberg, who has experience from helping scale several new companies, claims that the challenges of this startup are different. “On one hand, it’s about sharing economy, using unutilised assets and allowing people to earn extra income in their free time, but at the same time it is about changing the future of urban transport. The ridesharing app and the platform for drivers is just a start. In just a few years it might end up with operating pools of self-driving cars or delivery services or both or who knows what − the whole industry is changing very fast right now.”
It’s obvious that the disruption has just begun as 70% of the cost of a taxi ride today comprises the driver’s salary. Markus is well aware of the social impact of the disappearance of jobs. In the long run, it’s inevitable: “Either building tall walls like some countries do or introducing basic income for all.”
Markus claims that many people simply have not realized yet that it is actually cheaper not to own a car. “I do not have a driver’s licence,” Markus laughs. “So I’m kind of stuck with what I do.”
In March 2019, Taxify changed its name to Bolt.
Article source: Invest in Estonia
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