Metavallon Venture Capital—Transforming Technology Companies in Greece

MAR-APR 2018|BY BUSINESS PARTNERS
A Q&A with Yorgos Mousmoulas, Partner at Metavallon VC, a €32 million pre-seed and seed-stage venture capital fund

Tell us a bit about Metavallon VC and about your interests.

Metavallon VC’s mission is to engage at the very early stage and invest in companies that will operate at the forefront of business and technology. We specialize in B2B technology investments and work alongside ambitious entrepreneurs, helping them build transformational businesses across multiple stages, geographies and industries. We focus on pre-seed and seed investments and provide founders not just capital but also the opportunity to connect with experts, mentors, experienced entrepreneurs, industry partners and investors that help accelerate their company’s growth. We are a well-rounded team of four partners plus two operations staff.

What are the hottest tech market segments you are currently looking at for investment?

As mentioned above, we are focused on B2B applications and look for teams that are at the right phase of the hype curve, i.e. technologies that will become mainstream in two to seven years from now. We can’t ignore the fact that use of artificial intelligence and machine learning is exploding and is set to lead market changes in the coming years. Same goes for blockchain, which, ICOs aside, has the potential to disrupt any industry that is interested in tracking its supply chain and processes. In terms of sectors, there are niche segments where Greece has a competitive advantage, such as maritime, energy and cleantech, transportation, and mobility. We also see opportunities in microelectronics, as well as in aviation and space.

What are your investment criteria? What type of companies are you looking for?

We like investing in technology companies with a strong innovation element. Ideally, we want to see intellectual property and projects with a defensible competitive advantage. Our targets need to be growth oriented and globally minded from day one. Founders must have domain expertise coupled with passion and the ability to communicate their business ideas and their product to different stakeholders. We enter into long term partnerships with our portfolio companies, so we want commitment. Above all, we need a demonstrated ability to execute; without that even an excellent idea is void.

In your opinion, what are the critical success factors for technology companies in Greece?

We believe Greece has an abundance of raw talent in science, technology and deep tech. It is not by coincidence that technology leaders such as Tesla and Samsung are setting up R&D centers here. The challenge is transforming innovation coming out of universities, research centers and entrepreneurial ideas into scalable businesses that can deliver products and services with commercial value to the international market.

To achieve this, there are three critical factors. First, startups, especially in the B2B sector, need to connect early with corporates and industry to refine their offering and make it relevant to mature businesses. Even in cases where technology is truly disruptive, adoption is slow as it depends on large companies changing their ways. Second, companies need to be globally minded and seek international expansion from day one. The Greek market is small, so using it in silo or even as a test market can only work in limited cases. Last but not least, execution of the business plan, including quickly scaling a business with the right human resources, is particularly challenging in Greece, where middle management skills and large corporate structure and culture are lacking. We believe that the companies tackling those three elements will be tomorrow’s winners.

To your first point, how can mature companies in established industries collaborate with startups?

In contrast to B2C solutions, where adoption is user-led and hence faster, technology advances have found it difficult to make their way to businesses, especially larger corporates as opposed to SMEs or startups.

There is now a new, open innovation model developing in the corporate world, where incumbents seek ways to embrace new companies and technologies, to become more relevant in a fast-changing world. This shift towards innovation takes many forms, from corporate VCs to incubators, “garage” establishments within a company, and supporting startup events and accelerators. On the flip side, early stage startups are eager to partner with large corporates in running pilots of their technologies and to ultimately incorporate them into larger systems and processes. At Metavallon VC, we believe that a collaboration can be a win-win opportunity, and the time is right for establishing long term bridges with our industry partnerships.

What about opportunities in the U.S. market in particular?

From the onset, we have invested heavily in establishing links with the U.S. market; we see it as an inevitable part of the evolution of companies that want to stay close to the cutting edge of technology. As part of our pre-seed investment strategy, at the end of our acceleration phase, we include a trip to San Francisco. There, companies are exposed to market leaders, other startups, investors and potential clients. More recently, we also became members of the Draper Venture Network, a global network of VCs working closely to advance opportunities for their portfolio companies. The network was started in the U.S. by VC legend Tim Draper and, in expanding through Europe, sees opportunity for a new pipeline of investees operating in different market conditions.

Finally, what is your vision for technology startups in Greece?

We believe there is a unique opportunity for Greek startups to thrive. In addition to the abundance of talent, there is also risk capital available, and with focus and a lot of hard work, we believe that a virtuous cycle can start, leading to exponential growth and potentially reversing the brain drain as well. In five years from now we envision our country as a European center of innovation at the leading-edge of technological development.

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