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Check out my interview with James Williams for Digital Rubicon
I'm a software engineer and computer scientist now a Deep Tech "super angel" and founding partner of the VC fund Silicon Roundabout Ventures
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In this series I will share my views as a tech entrepreneur and venture capitalist, as well as research, data and interviews I will conduct to shed light on the startup and worlds
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The VC Fund Pitch Deck That Got Me To The First Closing Of My First Solo GP Fund
How can Europe overcome its fragmentation, harness deeptech to navigate a de-globalising world, and redefine its role on the global chessboard
Written by James Williams
Originally published on 'Digital Rubicon', Feb 2022:
Since Silicon Roundabout hosted its first London meetup for tech entrepreneurs in 2011, it has grown to become one of Europe’s largest innovation hubs boasting over 15,000 members. Such has been its success that the platform’s founders, Francesco Perticarari, a Computer Scientist, and Paul Dinulescu, a tech entrepreneur, are now launching their first VC Fund, Silicon Roundabout Ventures.
It is a propitious time to be backing Europe’s digital/tech leaders of the future. Last year, the region recorded $116 billion of investment dollars according to Crunchbase. A decade ago, that figure was a measly $8 billion. More importantly (as far as investors like Silicon Roundabout Ventures are concerned), $40 billion of last year’s investment total went to seed and early-stage start-ups.
The community-based Silicon Roundabout Ventures fund will invest in European start-ups developing next generation technologies across computer science (i.e. advanced software) and physical sciences (i.e. hardware and material sciences).
As part of the fund launch, the team invested its own capital in companies that are being transferred at cost into the fund portfolio. Companies such as: Axiom.ai, a browser automation solution; ORI Industries, an edge cloud technology provider; ApTap, a subscription management platform leveraging Machine Learning; and EcoSync, an AI-powered energy management system.
When asked about browser automation, Perticarari explains: “You've already got successful RPA companies such as UiPath, that have gone public and mostly target large corporates whereas Axiom.ai is trying to do what Zapier did for API's, by using a bottom-up approach where even people with no coding experience can start to build custom bots.”
The mission at Silicon Roundabout Ventures, in keeping with the ethos of the Silicon Roundabout hub, is to help nurture tech entrepreneurs and help them develop their business models and products from until they are ready for their Series A.
What makes the fund unique is the close affinity it has to the community, which not only provides a reservoir of potential investment opportunities, but also enables tech founders to connect with other technologists and companies through meet-ups and networking events, as well as seek out talent and investors.
Back in 2016, the team started running pitch competitions focused on big data and frontier technologies. Some of its community start-ups include companies such as Monzo, Crypto Quantique and CausaLens.
On 28th January 2022, London-based CausaLens announced a $45 million Series A fund, led by Dorilton Ventures and Molten Ventures.
“Over the years we have selected Silicon Roundabout competition winners and helped launch what, at the time, were very early stage, that is seed/pre-seed companies. Two of them have become billion dollar companies,” says Perticarari.
“Between 2017 and 2019, we started to focus ever more increasingly on those sectors that we found struggled the most with brand visibility and capital in the early stages, like robotics, advanced machine learning and artificial intelligence. These niches had potentially even more long term potential, in terms of disruption of society and helping the planet and making an impact but struggled in the very early stages to raise capital.
“Silicon Roundabout was a way for us to give them brand visibility, and to help them reach out to engineers, potential investors and potential business partners.”
When Covid-19 struck two years ago, it necessarily led to a cessation of physical meet-ups and it was during those early months of living through the pandemic that Perticarari started to back companies as an angel investor. That led to the idea of launching a VC fund.
“Fast forward to today, and we're preparing to launch the first externally backed pool of capital. We're still in the process of getting FCA regulatory approval. Hopefully that’ll come in the next couple of months,” he says.
The primary focus of Silicon Roundabout Ventures is the UK but with over 5,000 companies using the Silicon Roundabout platform, there is plenty of scope for the team to explore wider European opportunities over the coming months and years.
“I think this year is going to be figuring out how the community integrates with the fund,” says Perticarari. “We want to keep the brand and media presence of the platform but equally, we're probably also going to ramp up our investments into the ones that we think might be future leaders. Our focus is on advanced technologies, and the more advanced parts of computer science, creative new ways of using algorithms, and I would say mostly data-driven solutions – AI-driven solutions, cloud computing. We don't really do anything related to biotech or genetics.”
I ask Perticarari how he views the progress of Europe’s VC industry, especially in relation to backing pre-seed and seed stage companies. With the US having created the modern version of venture capital – indeed, Silicon Valley inspired the name of Perticarari’s platform (Silicon Roundabout is an area of East London home to a cluster of technology companies) – it is fair to say that Europe still lags behind. This is in part due to its more conservative mindset and less of a willingness among Europe’s academia to aggressively pursue commercial avenues for their ideas and innovations.
“I think Europe is now perfectly placed to play a leading role. The only caveat is there’s still a little bit of a hole in the UK and Europe in the pre-seed and seed stage. If you look at AI mega rounds, the amount of money flowing into deep tech finally started to go up. But for funding rounds that are $5 million or below, they are still in the minority of investments; the latest figure I saw suggested they only account for 13% of deals.
“There is still a lot of fear and conservatism when it comes to backing spinouts from universities. This is a field that existing venture capitalists and family offices are still not accustomed to investing in. There’s a knowledge gap and risk gap in respect to early-stage venture investing,” opines Perticarari.
In his view, if VC funds can create more awareness at the academic level, such that when academics come up with a new technology they can go the spinout commercialization route, it will help put Europe’s VC industry in an even stronger position.
Looking ahead for the rest of 2022, one industry trend that the Silicon Roundabout Ventures team will be keeping an eye on is next generation technology developments in cybersecurity; for example, how companies are using AI and specific machine learning applications to provide more than merely threat detection.
“I think we're going to see something different, where cybersecurity companies start using AI for things such as threat forecasting to anticipate attacks before they happen. What I'm looking for are companies that can use AI in a different way than threat detection per se,” concludes Perticarari.
