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?

BOLT.

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…

Ray Dalio — PRINCIPLES

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.

Questions from Kaidi Ruusalepp, Funderbeam CEO and Founder:

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.

Question from previous respondent Madis Müür:

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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Fan and ticketing data analytics and marketing optimization automation start-up FanSifter raised $300,000 in the pre-seed investment round and is the first Estonian start-up to join the leading music tech startups accelerator program Techstars Music Los Angeles.

„FanSifter is a machine learning-powered fan data analytics platform which helps music, entertainment, and sports events to sell more tickets thanks to powerful segmentation, profiling and enrichment tools,“ said FanSifter founder and CEO Aivar Laan, who has been active in the live events industry for the past 25 years. “The last 5 years of building value at the intersection of data-driven technologies and live events, gave birth to FanSifter based on our clients’ feedback and market insights,” described Laan.

He added that FanSifter does not only exists to tackle a large problem and inefficiency in the live events industry, but also helps users to save valuable marketing hours as the platform allows hyper-personalized communication of the right offer to the right audience. “This means events can now launch smarter campaigns by email, text, Facebook or Instagram and deliver more personalized experiences to fans. Everything is end-to-end trackable down to a granular fan profiles’ performance,” explained Laan emphasising that FanSifter employs AI across the platform.

FanSifter is also the first Estonian startup to join the 2020 class of the mentorship-driven accelerator program Techstars Music Los Angeles, the world’s leading music tech program run by Techstars in partnership with member companies Warner Music Group, SONY, Concord, Peloton, AVEX, Bill Silva Entertainment, RecoChoku, Royalty Exchange, Q Prime Management and Entertainment One.

The FanSifter’s team moved into the Techstars Music office in Los Angeles, where over the course of 13 weeks they are mentored by a 300 person-strong list of global music and tech executives, venture investors and global-scale artists. “Techstars Music Los Angeles is not a tech acceleration program like others. It is the singular best, bar none, for music and live events business, which has always been part of my DNA,” said Laan, adding that this opportunity is a fast track to the North American music and live events industry. Laan also noted that it is not an everyday thing to get personal time and advice from senior VPs and CxOs of the likes of Live Nation, AEG, Ticketmaster, Warner Music, Sony Music, Avex, , Disney, TikTok, or founders of Soundcloud, Splice, top tier US VC investors, or world-class artists in residence, like Jillionaire, D∆WN or Brad Delson from Linkin Park. “It is very humbling but also incredibly empowering,” noted Laan.

One of the lead investors in the pre-seed fundraising round Thomas Padovani, who is actively investing into different ventures through his investment company Bellone Invest, predicts huge success for FanSifter. “When choosing our next investments with Bellone Invest, we always strive for entrepreneurs that are solving real problems, this is what the market is always buying. FanSifter is offering a solution for which there is a gap in the market and that is beneficial for many verticals in events. Also, ticketing companies could benefit from their platform by learning how their customers act and how to target them better,” stated Padovani.

Furthermore, Thomas Padovani is committed to develop and mentor FanSifter’s technology team on proprietary technologies developed in-house by FanSifter. “With Adcash we focus on faster and more efficient digital tracking. Our senior technology team can most certainly contribute to making FanSifter’s tracking even more precise and effective,” noted Thomas Padovani.

Lead investors in the round were Techstars, Bellone Invest and Webinfluence Group, joined by Change Ventures Fund I and Siena Capital. FanSifter is targeting to raise up to $500,000 in this investment round.

Techstars is the worldwide network that helps entrepreneurs succeed. Techstars founders connect with other entrepreneurs, experts, mentors, alumni, investors, community leaders, and corporations to grow their companies. Techstars accelerator portfolio includes more than 1,900 companies with a market cap of more than $25 Billion.

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EU-Startups.com ranked Estonia among three of the best European countries to set up a startup. Estonia is an attractive destination for startups because of its powerful educational system, highly digitized procedures, ease to obtain work and entrepreneurial visa.

According to EU-Startups.com, Estonia is different from any other region in the world. The online publication points out that Estonian government has long advocated entrepreneur-friendly tax policies and has created aggressive incentives to attract foreign investors, especially in IT and some other niche segments like FinTech.

In terms of the entrepreneurial employee activity and competitiveness Estonia ranks the first in Europe and in terms of number of startups per capita – third. There are 550 startups in Estonia ready to conquer the world, following the four Estonian unicorns: Skype, Playtech, TransferWise and Bolt.

EU-Startups.com also points out that Estonia has a very flexible corporate tax framework that attracts many foreign companies to start their activities here.

The country has no corporate income tax on retained and reinvested profits. This means that the tax system is particularly suitable for companies that are planning rapid international growth – you can spend the funds you would otherwise pay as taxes to the government, on innovating.

Estonia’s e-Residency program is world-famous as it was the first of its kind anywhere on Earth and as the country’s e-residents can manage their Estonian company remotely.

Forbes reported already in June 2019, that upcoming startup hubs such as Tallinn are attracting heavy investment, with still plenty of room to grow.

World-class human capital, unique digital capabilities, a competitive business environment with advantageous tax system make Estonia a smart, agile location for businesses with global ambitions.

Source

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Artificial Intelligence is taking the world by storm. Where does Estonia stand in the AI ecosystem? Are Estonian businesses ready for AI?

We know that tech giants like Amazon, Baidu, Facebook and Google have AI advantages like collecting enormous amounts of data, access to top talent, huge investments to R&D, over smaller companies. However, the possibilities offered by AI are not reserved only for the largest companies and biggest economies.

Estonia is looking for ways how to attract international talent and investments; and on the other hand, its small size with limited resources requires the public administration and government to work efficiently. No wonder that in Estonia, both government and companies have noticed the potential of AI technologies to solve these current demographic and economic challenges, as the impact of AI on GDP in the Nordics alone is expected to be considerable: 9.9% of GDP (1.8 trillion).

Where does Estonia stand today in terms of AI readiness?

There is a large spread of AI readiness in Europe, but even the most advanced countries are lagging behind the US AI frontier. Yet, Europe’s ability to capture the full potential of AI varies significantly among countries. According to the mapping of Europe’s AI ecosystem four countries stand out as dominant players in driving Europe’s AI ecosystem — UK, France, Germany and Spain — and are known to have most vibrant and mature AI landscapes in Europe.

According to study by Roland Berger and France Digitale, Estonia has excellent prerequisites for benefiting from the application of artificial intelligence and is becoming influential AI player in Europe.
Whereas EU leaders of AI application are home to 67% of AI startups, Estonia with other Nordic and Baltic countries shows density dynamism i.e high number of startups per population size.

Compared to dominant players and other governments working on their AI strategies, Estonia sees its strength as an AI implementation leader for startups and AI applications.

For example by 2020 Estonian government has launched 50 different AI applications in public services and the country’s most well-known scaleups (Bolt, TransferWise, Pipedrive) as well as early stage AI-powered startups (Sixfold, AlphaBlues, Feelingstream) have turned to data and machine learning to maximise their product delivery.

At the same time Estonia doesn’t let the AI frenzy and need to speedy implementation of AI compromise data privacy and safety. Estonia plans to keep AI applications safe for its people and for the protection of private data. Estonia wishes to be the place where AI applications are developed in accordance with privacy and safety requirements.

Era of AI implementation

In his book AI Superpowers technologist Kai-Fu Lee argues that “Much of the difficult but abstract work of AI research has been done, and it’s now time for entrepreneurs to roll up their sleeves and get down to the dirty work of turning algorithms into sustainable businesses.”

Which Estonian companies are riding on the implementation wave right now?

But first you might ask, what makes a startup into an “AI startup”. For this article we call both producers and users of artificial intelligence as “AI startups”. It’s hard to calculate the total number of startups and companies in Estonia as AI is not a single technology, but consists of various elements.

Read more here to find out about the 13 examples of AI-powered companies from early stage startups to mature scale-ups, and bring out a few government AI applications that are using data and machine learning to either reshape product, automate, and on the other hand, bring out some more transformative companies who have created new business models with data.

Source

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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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