Four Years In: Doubling Down on Series A

Published on
October 7, 2018
Toby Coppel
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Four Years In: Doubling Down on Series A

We founded Mosaic in 2014 as a "Silicon Valley" style firm to serve the most ambitious founders in Europe at Series A.

Our confidence in the quality and ambition of entrepreneurs on this side of the Atlantic has been validated by IPOs such as Spotify and Adyen, and 50+ European tech startups worth over $1 billion today. Having spent our formative years professionally working at leading West Coast startups ($30-50 billion outcomes), at Mosaic we love to back founders who dare to swing for the fences. We have now invested in more than 20 such teams across the continent, from Basingstoke to Berlin, Tallinn to Tel Aviv, and beyond.

When we look back over the past four years, the common thread across our bets are an ambitious team, attacking a huge market, driven by a mission to build or fix something important in the world. In the Mosaic portfolio, there are numerous examples including:

  1. Blockchain: proving financial empowerment through an easy and safe way to access cryptocurrency
  2. Nexar: aiming to rid the world of car crashes with software and machine vision to protect drivers
  3. habito: making mortgages better for everyone, saving each customer time and money
  4. EF: making technology entrepreneurship the career of choice for the most ambitious people globally
  5. Clue: every woman's daily companion for better understanding their body

Our most recent announced investment, in Auterion, is in a similar vein. Zurich-based founders Lorenz Meier and Kevin Sartori have been pioneers in the open source drone community for 8 years, and are building the Android for commercial drones.

We have engaged with thousands of startups in the last four years. We continue to believe the best entrepreneurs in Europe enjoy relatively few focused, experienced business partners to choose at Series A: a crucial moment in the life of a startup as it (hopefully) grows to achieve escape velocity.

By "Series A", we mean the first institutional funding, after angel or seed, into a startup that is just starting to find product-market fit - not necessarily indicated by massive traction, but typically with some kind of early signal. The round size would likely be $3-10 million (a range that covers >80% of European Series A financings since 2016) to invest in the product, go-to-market, and team. As lead or co-lead, we back 5-10 new companies each year, typically with a $3-7 million first check, reserving funds to support follow-on rounds. Of course, there are a small number of $15-30M financings announced as "Series A" each year (we have even participated in a couple of these ourselves!), however these are much rarer than in the US, typically only when product-market fit has been fully achieved.

This approach is predicated on patience and partnership, and often there will be other investors (VCs, angels) in the mix as well - many of which we have worked alongside before. Over the past 20 years, we have co-invested with most of the leading venture firms in the US in scores of financings (personally backing 70+ startups, including Alibaba, Criteo, Etsy, Squarespace and TransferWise; and indirectly investing in 200+ more through our previous firms). Building strong investor syndicates is an important feature of Mosaic's approach too - since we started, including with Benchmark, Greylock, Index, Lightspeed, Ribbit, True, Union Square and YC Continuity. We are also enthusiastic to work closely with leading local co-investors and have partnered to date with a range of firms including Aleph, Atomico, BlueYard, Index, Lakestar, LocalGlobe, and NGP.

There are different blueprints for successful venture firms: some grow in size to scale across multiple geographies, as well as multiple stages. Since the beginning, our ambition has been to craft a close, tightly woven partner group, who take a thoughtful and collegiate approach to early stage venture investing. Mosaic is a collaborative and flat, equal partnership, small by design. Founders are our customers, as well as business partners. We share the core belief that venture capital would not exist without them.

In terms of business model, we focus on platforms, marketplaces (or more generally: network effect driven businesses), SaaS ... and occasionally open source. We are high conviction, theme-driven investors, concentrating our time in areas where we come with a prepared mind. We have invested in over 20 startups in our core themes, areas in which Europe has world-leading capabilities:

  • Blockchain, crypto and the decentralized web. Decentralized ledgers and programmatic trust mechanisms facilitate radically new structures of exchange. We were early: three of the first four investments in 2014 were blockchain startups. London and Berlin have emerged as leading nodes.
  • Computational health: continuous bio-tracking combined with newly codified biological knowledge (especially from -omics data) enable near real-time diagnosis, as well as adaptive and personalized therapeutics. Our venture partner Dr Jack Kreindler is a thought leader in this space.
  • Machine intelligence. We believe the impact of machine learning will be pervasive across all industries and businesses. Proprietary access to broad, low cost, well-labeled, unique training data with long duration relevance is critical. Europe has an extraordinary depth of technical talent here - including DeepMind, arguably the foremost commercial AI lab in the world, walking distance from our London office.
  • Mobility and Location Services. Communities and mobile connectivity are bringing transformative fluidity to the movement of people, goods and sensors, both in the urban context and beyond. Historic talent in mapping, computer vision, and of course the automotive industry are a demonstrably firm basis for company creation here.
  • Finance 2.0. The combination of previously siloed financial data and novel interfaces can create newly empowering products, unbundling banks and insurance companies into best-of-breed services both for individuals and enterprises. London's status as global financial centre and talent pool has naturally led to fintech becoming a core theme.

Our experience in these spaces coupled with our small size means that we can move fast and make decisions quickly and transparently.

Doubling down on Series A with Mosaic II

We're very excited to have added three incredibly talented new folks to the investment team over the past year: Bart Dessaint, co-founder of a healthtech business, and formerly of Andreessen Horowitz; Juliet Bailin from Insight in NYC, and Jacob Goodwin, a data scientist with an early stage operating background. They join Julia Qiu and Michael Odai, our operations lead who has been with us from the start.

We plan to continue to grow the investment team, including at the senior "check-writing" level. We'd also like to call out those who have helped us during the first chapter of our journey including Mike Chalfen, who has now refocused as an angel / solo investor.

With this team, we are thrilled to announce a second $150M fund, Mosaic II, closed over the summer. This money is committed to back a further 20+ outliers, the "shapers" whose mission is to make a dent in the universe. Investing Mosaic's first fund since 2014 has validated our strategy and the overall opportunity for a European, thematic, Series A focused firm. Many entrepreneurs adapt or pivot, evolving their initial idea, but now four years and one fund in, we could not be more thrilled to double down on the original thesis. Onwards!