Due to a relatively small number of startups that are developing solutions for the industry, the corporate fund Kolektor Ventures is increasingly focusing on the knowledge and competences of teams. If, for example, a startup excels at predictive analytics and is offering it to the financial market, this can also be interesting in the context of an industrial or manufacturing company with a suitable pivot. The case is similar with machine learning, sensorics, robotics, AR/VR/MR, artificial intelligence and simulation models. All mentioned technologies are in the investment focus of the Kolektor multinational, which works in the field of highly specialized industrial manufacturing, but they can successfully pivot into solutions for industrial 4.0 or smart factories with the right approaches and a suitably experienced and flexible strategic investor, says the managing director of Kolektor Ventures, Mateja Lavrič. And she adds that the industrial or manufacturing activity is where numerous opportunities are hiding for startups, which can quickly and effectively develop, test and launch their innovative ideas with the support of Kolektor.
Kolektor is joining PODIM as a corporate partner for the third year in a row, and we interviewed Mateja Lavrič to reveal the most important experiences and approaches that Kolektor has gained on the Slovenian and regional startup scene in the year and a half since its foundation, after nearly 300 meetings with startups and currently four promising startup investments.
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So which projects are your portfolio startup teams currently working on and how did you succeed in including them in the existing activities of the Kolektor corporate group?
VIAR is currently working on a project of video instructions for the industry and on remote assistance. Ektimo is developing solutions that are based on advanced analytics and machine learning and intended to optimize our manufacturing processes connected to machine vision. The development focus in the Smart Optometry team is still the same, meaning software solutions for eye exams and eye health. Airnamics is also still working on drones, while at the same time they are innovating a simulation platform for new product development, which Kolektor could use in industrial robotics. This project is incredibly interesting for us because we have been looking for ways to speed up the development part of the prototypes and products, namely how to cut back on time and decrease the costs as well as lower risks. And the mentioned platform is promising to bring truly big savings.
The projects you are describing sound very promising … but if you look back, when you were closing the investments into these companies, what was it that actually convinced you the most?
In one of the first interviews for the PODIM Conference, I said that the people, the team, are the most important. And I haven’t changed this opinion so far. Of course, you shouldn’t disregard the product, business model, and market potential, but the team, their knowledge and values, work attitude … that’s still what personally convinces me most. The business model and product can change, pivot, and that’s also what happened in our invested startups, such as VIAR and Airnamics, while Ektimo, for example, is moving from the financial industry to the industrial sector.
What do you think about collaboration with startups today, compared to May 2016 when you launched Kolektor Ventures? What are your key discoveries and experiences, but also challenges or unfulfilled expectations?
Much has changed in about a year and a half, which is nothing unusual. Usually, you get a different view of things with experience. The key challenge for us was the realization that there are few startups that develop solutions for the industrial environment. That is why in finding new investments, we started to focus on the knowledge and competences of the teams even more. If, for example, a startup is excelling in the field of predictive analytics and offering it to the financial market, this can also be interesting in the context of an industrial or manufacturing company. it’s similar with knowledge from the field of machine learning, artificial intelligence, virtual reality, which can be pivoted into certain industrial solutions.
What turned out to be best practices that you could maybe recommend to other corporations?
Collaboration with the local and regional startup community turned out to be the most effective channel for finding and choosing startups in which we invest. I would especially highlight recommendations from people from the startup ecosystem because we got such recommendations for three of our portfolio startups. In the second place, I want to place events to which investors and startups are invited, such as various demo days, meetups … Conferences are interesting too, but really good startups usually don’t look for investors in such a way, unless they are still in the early development stages.
How do startups today, compared to a year and a half ago, look at a corporate investor from the industrial environment? Are the opportunities and problems that they can successfully address with their solutions clear to them?
Startups still don’t know the industrial market well. They don’t know what the needs, problems, and potential solutions or opportunities are. Maybe also because certain processes in the industry are actually still covered with pencil and paper. But on the other hand, digitalization and the mentioned technologies are becoming our reality and bring big opportunities. Another fact is that big IT players with their solutions don’t address specific problems in the industry and manufacture, and this is where there are numerous opportunities for startups and talented individuals who can quickly and effectively develop, test and launch their innovative ideas to the market with help of an experienced and flexible strategic investor.
What about understanding the role of a corporate investor? Do startups still see you more as a potential buyer or do they already understand your strategic role better …
This understanding has changed. In a year and a half, Kolektor Ventures has gained significant recognizability. The fear of startups that the corporate culture will swallow them whole is smaller, especially because that hasn’t actually happened to any company that we invested in. What’s especially positive for us is that we aren’t a traditional financial investor, and we have an offer due to which we stand out from the investor crowd. We offer domain knowledge and a test polygon for industrial solutions. In the future, we will probably be even more interesting due to our Kolektor Labs platform, where startups will be able to collaborate in the development or projects with the newest technologies, where they will learn from top-notch experts and work according to the principles of lean and agile startup entrepreneurship.
And how did your approach to startup valuation turn out, having taken into account the law of supply and demand, and following the “win-win” principle and achieving satisfaction on both sides?
It’s interesting that in all this time, we actually didn’t make use of any official means of company valuation for any startup because there is no universal method for companies that do not have tangible resources and aren’t creating income, but they do have a vision, an idea. For us, the most successful method turned out to be negotiations after which both sides are happy with the relationship between the value and ownership share.
What about your integration in the business operations of startups and their inclusion in the operations of Kolektor?
Most startups that we invested in collaborate with Kolektor in one way or another, in the form of pilot or commercial projects. I must admit that we are definitely seeing differences between the startup mentality and way of working and corporate culture, but in none of the cases did our portfolio startups lose their speed and agility. I think we did quite well in creating new value with startup teams in such a way that both sides contribute the best from their world. As an investor, we, of course, monitor the work of startups on a monthly basis, meet with them, inspect whether the set milestones have been reached, and provide support that the startups need.
And where do they need you most often?
Our range of supporting activities is broad. To the invested startups, we offer mentoring, consulting in the legal, fiscal, accounting and logistics field, use of our equipment, access to our partners, opening doors to potential customers, access to the academic sphere, and so on. This year, we are adding Kolektor Labs to this, which is a sort of an incubator for the newest and most advanced technologies in the field of digitalization. Startups can join Labs teams in various ways, from pure business collaboration to project collaboration or joint development of certain products.
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Get in touch with Kolektor Ventures!
If you wish to introduce yourself to the team of the Kolektor Ventures fund or have a suggestion for a project that could be interesting to Kolektor Labs, send an email with a short presentation of your business idea to mateja.lavric@kolektor.com or get in contact with them through the contact form on their website www.kolektorstartup.com.
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More information on Kolektor’s investment activities for startup companies:
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A presentation of Kolektor and its role as this year’s PODIM Challenge corporate partner can be found here: http://www.podim.org/sl-si/investicija
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Kolektor
Kolektor Ventures
Mateja Lavrič
PODIM 2018
