Archive for the ‘Entrepreneurship/Venture Capital’ Category
S2 Capital
About a year ago, my close friend Sejal & I made a series of repeated observations. In particular, we saw talented, enterprising young people building high-impact businesses around the world but not attaining VC funding— growing interesting, innovative ventures exhibiting tremendous promise and already creating measurable social value, but struggling to find the growth capital they needed. These companies interested us because they generated both IRR (although generally lower than what a typical investor looks for) and social ROI. And so we decided to support them.
We’re thrilled to announce the launch of S2 Capital, a private social seed fund not affiliated with any venture capital firm. In our spare time, Sejal & I look for and support these young people creating products or services that are changing lives. We invest up to $30,000 in each company in a mix of debt and equity instruments. We’ve invested in three cutting edge companies, have formed a partnership with Ashoka Japan to support young entrepreneurs in the Tokohu nuclear disaster region, and are close to closing a fifth investment, this time in Ghana. Our Current Portfolio:
1) Skydrop Enterprises (Kenya) – Founded by Joel Mwale, currently 20 years old, Skydrop Enterprises is a producer and bottler of low-cost purified drinking water, milk and other dairy products, and canned fruit products in Kenya. Founded in December 2009, Skybox now employs 20+ staff members and serves a community of more than 2 million people in Kenya and Uganda. The company is expanding its operations across Africa and is on track to sell a million water bottles in 2012.
2) AYZH (India) – Founded by Zubaida Bai, AYZH is a for-profit social venture providing health and livelihood solutions to impoverished women worldwide. In 2010, AYZH launched its first product, JANMA, a clean birth kit, which provides women all the components recommended by the World Health Organization for a safe and hygienic birth, using environmentally friendly and culturally appealing materials. Additional products under development include: a newborn kit, a post partum hemorrhage kit, and a groundbreaking sanitation and hygiene solution for women.
3) Angels Finance Cooperation (Uganda) – Founded by George Bakka Wilson, AFC is a business incubator, accelerator, and investment vehicle for youth in Uganda. AFC houses the Mara Launchpad, Angels Ventures, and other initiatives to directly mentor and spur initiatives that emerge out of their programs.
Check out our website for more! www.s2cap.com
LearnUp & NEA
In the oasis that is Silicon Valley, it is often forgotten that the USA isn’t a place where your employees are constantly being poached by other employers who offer more lucrative compensation packages and growth opportunities. As this Wired piece on LearnUp states, the USA is really a place where “the unemployment rate has shot above the national average, employers are flooded with applicants, and education must result in immediately marketable skills”. But the USA is also a place where there are many job openings that aren’t getting filled.
Enter LearnUp, a startup building a platform where employers can create video content, tutorials, links to certifications, and other resources for applicants to get highly relevant, targeted vocational training for open positions. For example, Staples’ trainings for a manager position include a YouTube tutorial on QuickBooks, a Harvard Business School “Working Knowledge” article on “Making the Move to General Manager,” a Buzzle.com article on “Retail Store Management Tips,” and a TED talk on the “Eight Secrets of Success.”
We at NEA are excited to partner with Alexis Ringwald, CEO of LearnUp and a good friend, and Kenny Ma to help launch a company that solves the skills gap that exists between many employers and job applicants. As Alexis says in the Wired piece, “We’re not launching a start-up, we’re launching a movement. We’re on a mission to re-skill America.”
Decreasing unemployment, one position at a time.
This Wired article is terrific and was the source of some of the above content.
An Unreasonable Group
I spent the past week in Boulder, Colorado at the Unreasonable Institute. It’s a six week incubator, an accelerator, and a one-of-a-kind life-changing experience for some of the most inspirational and courageous entrepreneurs solving big problems in some of the toughest places around the world. It was founded by three visionary people—Dan Epstein, Teju Ravilochan, and Tyler Hartung—and supported by an army of volunteers, staff, mentors, and capital partners. It is based on George Bernard Shaw’s quote about the unreasonable man:
“…the reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man [and woman].”
This batch had 22 companies. Here is a quick snapshot of 6 of them:
1) Aquaphytex (Spain) – purifies wastewater through plants; have generated $4 million in revenue, employs 45 people, and currently provides clean water for 300,000 people in Mali, the Bahamas, Kenya and Spain. Pedro, the CEO, didn’t speak a word of English a few months ago but was nonetheless the most popular Spaniard in Boulder.
2) Liberation Chocolate (Liberia) – Reinvigorating the once abandoned practice of cocoa farming due to civil war, Liberation Chocolate empowers Liberian farmers to take back their fields and provides former child soldiers jobs by supporting production and bringing their products to market. Founded by a man who fled Liberia during the war then returned 14 years later.
3) Musoni (Kenya) – Making microfinance cashless for the first time in history, using mobile payments to disburse over $5 million to 7,500 clients.
4) Own Your Own Boda (Uganda) – Establishing a pathway out of poverty for Ugandan moto-taxi drivers by providing loans in the form of a new motorcycle, eliminating dependence on indefinite renting. In two years they have dispersed over 70 loans, with 22 of them already paid back in full.
5) Mobile Agribusiness (Congo) – Run by a former Congolese child soldier turned entrepreneur, Mobile Agribusiness connects farmers, who make up 80% of Congo’s population, to vital information via mobile phone that enables them to prepare, produce and price their crops effectively and competitively.
6) Quetsol (Guatemala) – Quetsol brings light to the poorest homes in Guatemala through a solar powered box. They’ve sold over $500,000 worth of solar home systems in 16 months, illuminating over 3,000 homes and benefiting around 16,000 people.
I’m absolutely blown away by what the entrepreneurs have accomplished, and by what Unreasonable has become. I can’t wait to keep supporting them and am so proud of the Unreasonable founders & team.
My Next Move
A lot has changed over the past month. I bought a gym membership in New York, then had to cancel it. I made some really great friends in the city, then had to have quick good bye dinners over the span of a week.
I have decided to join New Enterprise Associates, or NEA, in Menlo Park. It all happened really fast; in fact, it happened over the course of essentially 72 hours and most of it in New York, over Skype, and phone calls. And I’m really excited.
The past two years that I’ve been a part of the Bessemer family have been an absolute blessing and privilege for me. I started in Summer of 2010 as a Summer Analyst in New York and never really left. I stayed involved during the 2010-2011 school year while working for BVP’s portfolio company, Skybox, and coming into the BVP Menlo Park office multiple times per week. I was running around the bay area and on my phone all the time speaking with companies, and the day after my graduation from Stanford, we issued an investment recommendation for Snapdeal. I spent just as much time outside the country (mainly Asia) as in the USA while at BVP, and ended up being actively involved on a number of deals that went through (Matrimony.com, Skybox, and Black Swan Solar) and even more that didn’t.
The more time I spent at Bessemer, the more in awe I became of the people and the firm’s history. A hundred years is a LOT of time in the venture business, an industry known for its risky investments and high turnover & churn. And it has everything to do with the type of people that Bessemer hires. They are some of the most genuine, down-to-earth, caring people in the industry. They also happen to be really, really good investors. I wish I could tell you some of their numbers, but all you need to do is look at some of the acquisitions, IPOs, or massive financings from the last year to get a taste: Yelp (IPO), Pinterest (Series A), Millennial Media (Seeded & Series A before IPO), LinkedIn (IPO), Traffix (acq. F5 Systems), Vertica (acq. HP), OMGPOP (acq. Zynga), Verastem (IPO), and the list goes on!
Leaving wasn’t easy. I know everyone at the firm, and I have a close personal relationship with a majority of the investment professionals. It’s never easy to leave a place you love.
Still, every once in an a while, an opportunity comes along that you feel like you have to take. Something in your gut tells you that the people are something special. That was the case with NEA. I’ll be a part of the US tech team (specifically the consumer team, led by Scott Sandell and Tony Florence) and the India team, while continuing to look at other emerging markets. NEA is an investor in Groupon, Bloom Energy, Workday, and many others. And they are a really great, welcoming bunch of people. I could go on about the NEA people and their investments, but I’ll leave it at that for now.
I’m excited for a wild ride ahead.
Skybox – TR’s 50 Most Innovative Companies for 2012!
A hearty congratulations to Skybox, a cutting edge, atypical Silicon Valley company for being recognized by MIT’s Technology Review as a Top 50 Innovative Company in 2012. And congratulations to co-founder and current Chief Product Officer Dan Berkenstock, one of the most high energy and thoughtful founders I’ve had the privilege of working with, on being named a Top Innovator under 35 by the same publication. I joined Skybox in 2010 as a “consultant” right after Bessemer led Skybox’s Series B, working 45-50 hours a week as one of two non-engineers in our small team of less than 20. And now, the team is 50+ people (with many rocket scientists!) and ready to disrupt a stodgy industry.
Skybox is a company building low cost satellites that provide timely high resolution imagery and video. Imagine being able to see the protests of the Arab Spring in high resolution video, get timely imagery of the damage done by Hurricane Katrina so FEMA can more effectively act, plan construction sites without ever making a visit, or monitor and defend your national borders with video or imagery feeds. It’s pretty amazing stuff, and use cases go on and on. It’s a company built on transparency with the belief that critical information should be available in high quality and low cost to many government agencies and the masses.
CEO Tom Ingersoll (a remarkable, almost paradoxical combination of an aerospace executive and entrepreneur), Dan, and the rest of the founding and broader team are going head on in an industry defined by its staidness. And they’re attacking it with the zeal, mobility, and leanness of a Silicon Valley team.
The sky is the limit…except in this case.
Article on our SE Asia Trip
I didn’t realize this was being written, but a well-written post by SGEntrepreneurs on my colleague & my recent trip to Southeast Asia. The article, taken from some of the things we spoke about at HackerSpace, highlights some of the reasons I’m excited about the region.
Singapore’s Government & Dollar Leverage
Singapore is an eclectic array of cultures, a dynamic business hub, a free port, and the least corrupt country in Asia (and maybe the world). Last week, I was having coffee with an entrepreneur at Fusionopolis, a government planned, built and supported massive 21st century tower that houses science and technology innovation. Part of our conversation went something like this:
Me: “I’m amazed by all that the government is doing here. How do they have so much money?”
Him: “Every government has money. It’s just that Singapore’s government isn’t corrupt. It actually uses it for it’s people.”
One of the most interesting pieces of information I learned is the way government officials are compensated. While Obama makes $400,000/year, the President of Singapore makes $3,355,270 in US dollars. The government benchmarks the salaries to slightly below the mean of public company CEOs, thinking that government should attract the best talent and such salaries prevent (or, more realistically, reduce) the need for corruption. When students from the best universities are polled in Singapore, their ideal jobs are either in the government or for a large MNC. Government jobs are seen as very prestigious.
On the entrepreneurial side, the Singapore government created the Technology Incubation Scheme through the National Research Foundation to jumpstart seed investments into startups. They will invest up to 85% of the total investment (up to a maximum of $500,000 Singaporean dollars). And, the NRF offers an option for its shares in the investee company to be bought out at a price of 1.1x the capital in the first 2 years or 1.15x the capital in the third year. It effectively means private investment leverage of greater than 4:1.
As I leave Singapore tonight, I marvel at what an efficient, highly skilled, and uncorrupt government has been able to achieve.
Bessemer, BharatMatrimony, and 9:44 AM
I’m excited to announce Bessemer’s investment in Consim, the holding company of two tremendous assets: BharatMatrimony.com (India’s leading match making site) and IndiaProperties.com (India’s leading property listing site). 98% of Indians get married and one’s son or daughter’s wedding is often the biggest expenditure of a household, even more than the house itself, and BharatMatrimony is helping facilitate these marriages both online and through offline centers. Property values are booming and the real estate market is moving from being fragmented to more centralized, a trend that IndiaProperties is leading. We’re very much looking forward to working with the whole team led by someone who we think is one of the best entrepreneurs–and grinders–we’ve seen: Murugavel (Muruga) Janakiraman.
I could give a number of anecdotes about Muruga, but I’ll give one which should show the type of leader he is and why we’re so thrilled to back him. Every morning (note: every morning, rather than only every Monday morning like most companies), Muruga holds an executive team meeting where all the key managers of Consim get together to chat about the previous day’s accomplishments, the current day’s goals, the various challenges that may have arisen, and any progressive topics that may require a collective brainstorm. The meeting isn’t meant to be a full-on brainstorming session – after all, it only really is a 15 minute update meeting – but it sets the tone and makes sure everyone is on top of their game each and every day. Culturally, it keeps the company sprinting to beat any competition in the space and set their targets higher and higher.
But perhaps the most impressive part of this whole ordeal is the time the meeting starts. It’s the same every day and, if you’re one minute late, you can’t enter until the next day.
9:44 AM
Love it.
Snapdeal & Bessemer
I’m thrilled to announce Bessemer’s investment in Snapdeal. We led the Series C in this innovative, rapidly growing company that is not merely a Groupon clone, but a company that is trying to change e-commerce in India through the best deals available. I was most impressed by the entrepreneurs behind the company – Kunal Bahl and Rohit Bansal – who are wildly creative, very ambitious, but also highly analytical. They have an ability to both be highly detail oriented yet able to see the larger picture. And equally as important, they are adamant about changing the business culture in India to be more philanthropic.
I, and the rest of the BVP India internet team (Rob Chandra & Abhijeet Muzumdar), can’t wait to help Kunal, Rohit, and the Snapdeal team build a business that we hope can revolutionize commerce online in India.
India Internet & Mobile
I spent the past week in New York City at Bessemer’s All Hands meetings. On Wednesday and Thursday, it was just the India team, of which I am also a part.
Tomorrow, I fly to Mumbai. I’ll be in India for two months leading the development of our India internet and mobile investment practice. India has 81 million internet users, a number that is predicted to triple by 2015, and has the fourth largest internet population in the world. India also has over 800 million mobile phone subscribers, meaning that more people have access to a mobile phone than a flushing toilet.
BVP will continue to invest in sectors in which we’ve had considerable success in India–infrastructure, cleantech, financial services, etc–but we’re also going to going to ramp up our efforts on the web and mobile front. We’re going to tap into some of the US internet expertise from our investments in Yelp, LinkedIn, Quidsi, Skype, and Cornerstone to give entrepreneurs a wealth of resources to help them grow their companies.
Let me know if you hear of some exciting internet or mobile entrepreneurs in India who are in the process of, or want to build great businesses. We can’t wait to help.
Innovations & Inspirations 