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33N Ventures raises €150 million to invest in European, Israeli and US cybersecurity and infrastructure software companies. The fund will primarily target Series A and B investments, with an average ticket size of around €10 million, with his €20 million investment capacity already committed by Alantra and its strategic partners.
Co-founders and managing partners Carlos Alberto Silva and Carlos Moreira da Silva have made over 20 investments in cybersecurity and infrastructure software in Europe, Israel and the United States over the past decade.
This Help Net Security interview discusses the cybersecurity investment landscape in Europe, strategies for finding the right company, and more.
Company founders typically think primarily of California and Tel Aviv when discussing information security investments. What are your thoughts on the current state of cybersecurity VCs in Europe?
Carlos Alberto Silva: When it comes to cybersecurity, there is no doubt that the US and Israeli startup ecosystems are in the spotlight. But that doesn’t mean there are no success stories in Europe. Take IriusRisk, an automated threat modeling platform that just weeks ago raised a $28.7 million Series B round.
Naturally, Europe should be the world leader in this field. There is a lot of talent here and a very large market. The challenge for European companies is that unlike their US and Israeli counterparts, they often lack the professional support they need to compete.
Although there are some specialized funds in Europe, most funds are naturally focused on only one country or region and tend to invest in very early stage companies. As a result, most entrepreneurs face a choice between working with US investors (who lack local knowledge) or working with generalist funds who may not be able to open the right doors. increase.
That’s why we decided to create a fund with a truly pan-European focus. There is tremendous opportunity here for companies that are underserved in the current market. We’re still investing in a few companies in the US and Israel — put simply, there are some great opportunities we don’t want to miss — but we’re taking advantage of this relatively untapped opportunity in Europe. I am most excited about…
What challenges and opportunities do you face today? What is your main focus?
Carlos Alberto Silva: I just launched the fund last week, so I haven’t faced many challenges yet. That being said, of course, the economic climate is not the best. This is a challenge that all venture capital funds and companies must face.
Cybersecurity as a whole is well protected against economic recessions. That’s because strong cybersecurity isn’t a nice-to-have, it’s essential. That remains unchanged – from digital transformation to national security, cyber continues to be a top priority for governments, institutions, businesses and investors around the world, with the market expected to reach $162 billion by 2022. I’m here. Growth projections for numbers over the next few years – so the companies we look at have some built-in resilience.
How can you find the right balance between finding promising new businesses and researching potential investments?
Carlos Moreira da Silva: This is usually not something we struggle with. This is probably because we follow a dissertation-driven approach, which means we spend a lot of time considering the areas we want to cover before making an investment decision.
Of course, we stay up-to-date with the industry, consult all public sources and attend the most relevant cybersecurity events in Europe, Israel and the United States. This is all pretty common sense.
But we rely heavily on our own network of close-knit VCs and advisors. Our network is always invaluable when trying to identify the best leads for future investments. Brian NeSmith (Arctic Wolf), Eyal Hayardeny (Reblaze), Nuno Sebastião (Feedzai), Pierre Polette (Hackuity) Our strategic advisors, including leading entrepreneurs, experts, and cybersecurity decision makers such as, are all founders of companies we have invested in. With an incredible depth and breadth of sector-specific knowledge and experience in the past, our own plus our ability to identify and support founders and companies with the greatest breakthrough and scaling potential It’s really helpful for
We ideally spend a lot of time talking with our investee companies to find out where we can help them as early as possible. For example, if you can refer potential customers, do so even before you make an investment. We have worked hard to build an industry reputation that supports the entire industry. This is very important to us.
How much research does it take to identify a company you want to invest in? When it comes to cutting-edge technology, it’s hard to distinguish between what seems important but not important and what seems unimportant but important. There are cases.
Carlos Alberto Silva: For most first-time funds, the process of identifying the right companies to invest in such a vast geography is difficult. But our team has been together for years. We may be the first fund, but we are far from the first team.
We know this space well and have strong networks across the US, Europe and Israel. In fact, much of the research you refer to has already been done virtually. They already have a list of companies they are interested in and often have already started the conversation.
We want to help forward-thinking companies in emerging sectors. We want to invest in the first person to solve a particular problem, or one of the first to solve it. In our view, jumping on the bandwagon or entering an already saturated market will inevitably lead to marginal returns. Once you enter the ground floor, there are more rooms to grow.
What advice would you give to cybersecurity startup founders looking for investors?
Carlos Moreira da Silva: Beyond the obvious (how much are they willing to invest), there are some very important things founders should look out for. First, look at their track record. Cybersecurity is an area where deep technical knowledge is very important. Think of it this way. If you have to use metaphors or hand-helds to explain what your company does, they probably won’t help you much more than provide cash incentives.
The second thing to look at is the network. A well-connected investor with good cybersecurity contacts can prove invaluable. Most venture capital investors have a long list of contacts. You can pick it up by attending the right events and spending enough time in the space. Someone who has a relationship. A good referral can make a big difference for a company, so it’s important to have a strong investor network.
What are your tips for maintaining a good relationship with a company founder? How to build a quality relationship?
Carlos Moreira da Silva: It may sound obvious, but in our experience, the most important thing in building trust is a solid understanding of your business. It’s important to be by the founders’ side in the good times, but especially in the tough times when they really need extra help. need to understand.
But more than that, you need to understand everything from your customer pain points, to the talent market in that sector, to your growth opportunities. This is not something that can be learned overnight. Entrepreneurs are good at picking people with real knowledge from boasters.
And in our case, we can share a global perspective on the wider market landscape. You can offer great value here.
I also think it helps that I’ve been in their position before. More than just an investor, we have held senior management positions in cybersecurity companies and built them effectively from the ground up. So we understand the nuances of day-to-day business operations and help build a foundation of trust. This is really essential for a successful relationship.
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