Visionaries Club, a Berlin-based VC firm, has raised a new €400 million fund to invest in B2B technology. This is divided into three separate funds: a €150m seed fund; a €200 million early growth fund to invest in post-Series B startups; and a new €50 million Tomorrow Fund, which will focus on pre-seed and seed science and technology investments.
What is Visionaries Club money spent on?
The Visionaries Club, launched in 2019 by partners Robert Lacher and Sebastian Pollok, focuses on two main areas: digitizing the supply chain of companies, spanning everything from procurement to sales (think process mining unicorns like UiPath and Celonis and digital freight forwarder sender), and tools that enable employees to work remotely.
Lacher says he’s also excited about B2B fintech: things like buy now, pay later, which were “very trendy” last year, as well as B2B Payment Stack because “there is no PayPal for B2B yet”.
The Visionaries Club also looks at SaaS for small businesses – “the most underserved sector when it comes to software, but the largest market globally overall,” says Lacher. It already supports companies like HR tech giant Personio and Taxdoo that offer automated tax compliance services.
The company reserved 60% of the seed fund for follow-up investments and only 30% for the growth fund – Visionaries is “not ownership-oriented there,” he says Laugh.
The new Tomorrow Fund has a very different focus, trying to tackle big world issues like climate change and pollution. The €50 million fund will go to start-ups in healthcare, transport, agriculture, construction and mobility.
“There is simply a lack of ‘brave capital’ paired with entrepreneurial experience used in these areas. We’re excited to do our part to make both more accessible from now on,” says Pollok.
The strategy, he explains, is to “get in very early in the pre-seed or seed phase” and invest between €500,000 and €3 million to help companies get their solutions to market and take them globally to scale.
What is the Visionaries Club’s track record?
- Visionaries Club closed two $85 million funds (a pre-seed and seed; a growth fund) last May – a strategy the company is now repeating on a larger scale with its new €150m seed fund and €200m early growth fund .
- Two micro funds give visionaries some flexibility, says Lacher. From the seed fund, it can lead and carry seed investment deals €1-5m (average ticket size €2.5m). And with the growth fund, it can co-invest in Series B rounds with large multi-stage VC funds — without having to compete with them. Visionaries Club typically invests €5-10m in growth stage startups with an average ticket size of €7.5m.
- In his portfolio are B2B unicorns such as chocolate (software for restaurants and suppliers), Personio (HR software) and TrueLayer (Open Banking Infrastructure).
- Visionaries’ backers include some of Europe’s best founders, such as Personio’s Hanno Renner, HelloFresh’s Dominik Richter and UiPath’s Daniel Dines. German family offices, which work for entrepreneurs such as Felix Fiege, Selina Stihl and the families behind the bakery multinational Dr. Oetker and the Bitburger beer group have invested in the funds.
How is B2B affected by the downturn?
The B2B market has been red hot in recent years. In 2021, funding for European SaaS peaked at €41.5 billionaccording to Dealroom data, and startups in the industry 39 rounds over $100 million.
Now the valuations for late-stage deals are starting to drop slide in the midst of the downturn, with Klarna’s 85% drop in the rating is the most notable example.
So, is the golden era for B2B SaaS nearing its end? Lacher has a few thoughts.
“We don’t really see the current situation as a crash, but as a healthy correction,” he says. “In our view, 2020-2021 was an unhealthy year with too much money pouring into the ecosystem, too many rounds expiring too quickly, and valuations being too aggressive.”
Now B2B technology companies are being evaluated 10x sales multipliers in the public market – return to the average level of the last 15 years.
Investors are generally more cautious about using big checks at later stages when they “don’t know if the valuation is justified,” Lacher adds. Series A, B, C, and D rounds are “pretty slow right now,” he adds, while seed rounds are becoming increasingly competitive, with Series A funds like Accel, Index, Sequoia, General Catalyst, and Lightspeed all around the same deals compete.
The Visionaries Club is pretty relaxed, says Lacher, given the circumstances. If you look at past financial crises, B2B companies with strong earnings weather downturns well because “they’re not like gorillasor Flink, or “consumer internet companies” that need a lot of money to function.
Each of the Visionaries Club’s growth portfolio companies has 30- to 80-month trajectories, which means they don’t have to raise new funds right now, he says.
Despite being a young VC, Visionaries Club already has a strong track record of B2B investing at the age of five of its 32 companies, unicorns, as well as several companies (including Taxdoo, Yokoy, Pigment, and Leapsome) are on track to hit $1 billion. It also has an interesting USP: it is backed by both family businesses from the old economy and well-known digital entrepreneurs, both of whom can bring valuable B2B experience to founders.
It will be interesting to see which companies the Visionaries Club bet on after the B2B market is slow it down – as well as how his Tomorrow Fund will hold up against sector-focused VCs with arguably more experience in certain areas.
Miriam Partington is Sifted’s DACH correspondent. She also covers the future of work, co-authors Sifted’s Startup Life newsletter and tweets from @mparts_