Hello from LocalGlobe

We’ve had our heads down for a few years now, so we thought it was time to share an update on what we’ve been doing and how we’re thinking about the next few years.

2020 was a busy year of development for us

— 5 Team promotions & additions including 2 new GPs, Mish and I, and 3 new Partners: Rhian, Rose & Tom

— 60 new & follow-on investments made, we remained extremely active partnering with founders in New Palo Alto & beyond

— $2bn+ follow on capital raised by LocalGlobe founders, with over $6.5bn raised since 2015

— $370m raised in new LocalGlobe ($150m) & Latitude ($220m) funds, to double down on our core investment themes in 2021

— We’ve built some strong foundations since 2015, but we’re still very much in the early stages for us and our ecosystem

We’ve built some strong foundations since 2015, but we’re still very much in the early stages for us and our ecosystem

Like the founders we aim to partner with, we’ve always taken a long term view of what we’re building and we have always held clear long term strategic beliefs:

1. We have conviction our core markets can generate world-class returns — While contrarian when we started investing in 1999 and began Lovefilm in 2002, tech companies in our core markets have now taken their place at the top-table and have their best years ahead

2. We invest for the long-term in our team and infrastructure — We’ve made deep long-term investments in world-class facilities, our team, tools and training (including Newton) — all of which we believe are fundamental to our long term success

3. We can have a positive social impact as well as make great returns — Building resilience and supporting renewal in our neighborhood, community and ecosystem are critical — great returns and a positive social impact are not mutually exclusive

Our new funds allow us to double down on our core markets and long-term investment approach to innovation

We are in the middle of a multi-decade shift from public to private markets which is increasingly pushing asset allocators and policy makers to develop new approaches to better understanding the levers for long term and sustainable growth.

COVID and climate change pose enormous long term challenges for our next economy and accelerate this critical need. We believe that the innovations generated by science and technology are fundamental to developing the solutions that society needs both to grow and reduce inequality.

Since 2015, we have raised nearly $1bn in committed capital to invest in over 160 pre-seed and seed founders, as well as in breakout teams via our sister fund Latitude who we believe can become drivers of this next economy.

We believe that we are right in the middle of arguably the world’s most exciting innovation ecosystem to make this change — we refer to it as New Palo Alto

Our home at Phoenix Court in London is sandwiched between King’s Cross & Euston stations and this puts us just a four hour train ride away from some of Europe’s great cities like Amsterdam, Brussels and Paris as well as close by to Bristol, Cambridge, Oxford and Manchester in the UK. We call this area New Palo Alto — we think of it as not just an area, but also a state of mind — and this is where over 65% of the founders we’ve partnered with call home and where we overweight our investment focus. We believe some of the most important and innovative companies of the next two decades will emerge from here.

New Palo Alto has some foundational strengths going into the next economy, including being home to 41m people, 7 of the world’s top 30 universities and $128bn of annual enterprise IT spend. It is also already dominant from an innovation perspective with the highest concentration of venture capital raised in Europe & Israel, as well as being dominant in terms of the number of unicorns and futurecorns — private companies valued at $250m to $1bn — already produced.

We think it has taken 20 years to get us to the start line, and now it’s about to get really exciting

In the last two decades, our adoption of technology as consumers, enterprises as well as governments has often been discretionary. While this has already created some incredible success stories, one thing COVID has made very clear is that we no longer have a discretionary relationship with technology — it is becoming non-discretionary in many aspects of our lives and the Internet is arguably becoming a universal basic service.

We believe that this long-term trend will accelerate over the next 20 years and much larger consumer and B2B companies will be built serving non-discretionary spending in areas that are fundamental to our economic wellbeing including finance, housing, education, health, transport, food and energy. To illustrate the point, a music and TV fan might spend $300 a year on Netflix and Spotify subscriptions but an annual travelcard for zone 1 and 2 on London Public Transport costs over $2,000.

LocalGlobe’s focus remains clear and consistent: “be founders’ best partner to get from Seed to a great Series A”

— Having been founders many times ourselves, we know how challenging the road to a Series A can be, in fact in Europe only 17% of companies make it

— Providing founders with the best support on this road is our top priority — in the last 12 months, LocalGlobe founders have raised over $2bn+ in follow-on funding (and over $6.5bn since 2015) from great co-investors

Join one of New Palo Alto’s most engaged & supportive networks for you and your team

— In addition to the structured, tailored and collaborative support we offer one on one, we also know how valuable connecting with and learning from your peers can be

— We also know starting a company can be lonely and confusing at times — we plug you and your teams into our active and engaged community of more than 250 founders and 125 CTOs — plus as you grow we have specialised communities for People Ops, DevOps and Finance among others

— 48 of our Founders are already in moderator trained Peer Exchange Groups, which are small confidential groups meeting monthly, with tens more joining

— We also offer access to our “Fellows Network” which is a group of C-level domain specialists who carry scars from great companies including Farfetch, Deliveroo, Amplitude, Airtable, Zoopla, Tesla, Booking, Expedia, Skyscanner, King and Skype

— We all love what we do, please ask founders what we are like to work with

Strength in numbers — our network comes with extensive knowledge and insights

— The founders we work with believe in the power of data to share knowledge and produce insights — and so do we

— Over the last 5 years we have collected detailed insights from 161 companies with data on more than 1200+ tools and suppliers from law firms, to job boards, to collaboration tools and more — 20% of which are rated 4 or 5-stars

— What (or who) doesn’t work well is sometimes as valuable as what does — and now over 500 people across our community use these insights to help make more qualified decisions

— Founders are also helping each other find talent via Circular with 84 companies sharing job profiles of candidates they interviewed and who could be a good fit for others.

We’ve continued to be sector-agnostic — but have been going deeper into some key themes, with a prepared mind, where we’ve developed real insights, networks and depth.

— New Native APIs: Data infrastructures designed for seamless digital business communication (Payaut, Gordian, Yapily, Canopy, Impala)

— Tools for Indies and SMBs: Bringing SMBs into the digital economy (Melio, Libeo, Travelperk, Breedr, Tiney, Rekki, Parade)

— Finance & Insurance: Regulatory change, innovation and new customer demands (Tide, Cleo, Xelix, Cuvva, Arex, Wagestream, Payaut, Yulife, Zego)

— Business Automation: ML that drives automation and operational efficiency (7Bridges, Storelift, Rossum, Faculty, Tessian)

— Health & Wellbeing: Computation-driven, digitally delivered (AccuRx, Elephant Healthcare, Vatic, Circles, CoMind, Awell, Apheris, Panakeia, Vira)

— Human Capital & Collaboration: How talent grow, work and collaborate (Modulz, Otta, Lunchclub, Cooper, Mona)

We really can’t wait to welcome you back to Phoenix Court

We‘re so excited to get back into our physical space and meet face to face.

In the meantime we’re spending time on Cosmos and are continuing to deliver digital events, both for our portfolio companies and wider community: in 2020 alone, we hosted over 60 events to over 2,000 attendees.

When we signed a 20 year lease on Phoenix Court with Camden Council in 2018, we simultaneously made a long term commitment to making a positive impact in our neighbourhood in Somers Town as well as to the wider Camden community.

We got started by getting to know our neighbours in 2019, and since April last year accelerated our efforts to have a positive impact by redirecting our food budgets to Camden Mobile Food Bank and purchasing laptops for our local schools Edith Neville and Regent’s High for children needing equipment for home learning. We’ll be talking more about Phoenix Court Works, the community engagement arm of Phoenix Court, later this year.

Total Football is in our DNA

We’ve written before about Total Football as a core operating principle and we really love working like this: as a fully integrated investment and operations team, across LocalGlobe and Latitude. We don’t believe in individual attribution, instead our full team contributes to investment decisions and company support. Everyone across both the investment and operations team’s compensation includes carry in all funds and profit share.

We have eight General Partners across LocalGlobe and Latitude, each one of us is weighted towards either LocalGlobe or Latitude, and each one of us majors on themes we are particularly passionate about:

— Mish is our machine learning, data, cyber, and Israel expert: quiz him about Melio, Rossum, Rezilion, Papercup, Modulz, Sharework, Meilisearch

— George has a passion for both ends of the spectrum — comfortable on consumer tech as well as B2B: talk to him about Rekki, Travelperk, Avant Arte, Streetbees, Infarm, Libeo, Storelift, Taster, Cosmos, and you can read his thoughts on the SMB playbook, the Collecting Economy and join his Exec Call Clubhouse sessions

— Remus is our fintech and insurtech guru: latest insights on benchmarks and breakouts are here — with a side gig in job search and skatewear — Tide, Cuvva, Yapily, Breedr, Copper, Canopy and of course Otta and Parade

— Suzanne works across consumer and enterprise companies in regulated markets. Chat to her about how policy and regulation create hurdles and opportunities for tech companies, from GDPR to gig economy employment status. Currently spending time on the future of learning and work. Tessian, Zego, Lingumi, Motorway, Tiney, WeFarm

— Julia spends most of her time in healthtech at the nexus of clinicians, medical research and data science: companies like AccuRx, Vatic, Panakeia, Elephant Healthcare, Comind, Awell, Apheris, and some of her recent advice for Founders is here

— Julian is weighted more towards Latitude (join him for his IPO Drop on Clubhouse) but he is indulging his passion for all things travel by starting to invest at pre-seed and seed stages

— Saul is across both funds and as he says himself “is interested in everything”

— Robin isn’t leading investments in our latest fund (nor has he in our last 2 funds), but is very active with existing companies, Latitude in particular (see his latest thoughts on capital markets here) and mentoring the team. He recently developed a module on what it takes to be a great venture investor and we’re all loving going through it with him. The module will also be available through Newton, a VC training programme we launched with LBS to improve access to venture capital (the first cohort will also be 50% funded by Phoenix Court Works)

Our team spans 3 generations from Louis (21) to Robin (73) and is 48% female.

22% of our investment partners are female, which outperforms the 83% UK VCs who have 0 women on their investment committees, and we are committed to continuing to improve this metric over time.

We can’t wait to start investing from our newest LocalGlobe and Latitude funds — and oh, by the way, we’re hiring…

We plan to add significantly to our investment team this year both at the Partner level and Associate level, as our first cohort comes to an end.

We want to keep investing where we are investing, but plan to go deeper into areas such as enterprise infrastructure, frontier tech and healthcare — if you have domain expertise, or amazing friends who do, we look forward to meeting you.