Yellow, a new VC firm from Glovo founders and Atomico investor, is betting on Southern Europe

it’s always interesting when a new venture capital firm emerges with a new team of partners. And with Yellow, is interesting in multiple ways. Founded by Oscar Pierre and Sacha Michaud, the founders of Glovo, as well as Adam Lasri, former investor at the venture capital giant Atomico, Yellow is a new €30 million pre-seed fund that wants to invest at the earliest possible stage (i.e. say, 32 dollars). million at the current exchange rate).

In addition to this unique founding team, the venture capital firm’s approach is also quite different. While most venture capital firms operating in Europe focus on the United Kingdom, France, Germany and the Nordic countries, Yellow wants to put more emphasis on southern Europe, and especially on some key markets in the area. , such as Spain, Italy and Portugal.

Last week I spoke with Adam Lasri about the new fund and the team’s investment thesis. Yellow will be an opportunistic technology fund, meaning it doesn’t plan to focus on one particular vertical. The company will invest in B2B and B2C startups across different industries.

“Over the years, I have had more and more access to early-stage deal flow. Often, while I was at Atomico, I would talk to companies that were in the ideation stage and that we couldn’t invest in,” Lasri told me. “And I found that frustrating, because a few months later, you could have Index or others making investments, while it was not part of our thesis to invest at an initial level.”

He also added later in the conversation that he has no ill feelings toward his former team. He only wants to invest in the initial (or pre-seed) stage.

“Founders love to talk to another founder who has successfully sold their company” Adam Lasri

And yet, Yellow will not be the main investor, as it plans to invest between 200,000 and 500,000 euros per operation. Instead, he believes he can be the first to believe, attract other investors and provide advice at scale. “We are never leaders, only collaborators,” Lasri said. According to him, many early-stage companies face the same problems: how to set up a team, how to format a pitch deck, how to navigate the VC ecosystem, etc.

And of course, Glovo’s founders also know a thing or two about creating a startup. “Founders love talking to another founder who has successfully sold their company,” Lasri said. This could be why Atomico, founded by Skype founder Niklas Zennström, has been so successful.

“Oscar, who is the CEO? [of Glovo], spent much of his time with businessmen. I didn’t know how to expand the time I spent with them, but every time I invested in a company, I talked about all these aspects: how to go from 0 to 1, how to expand your team, how to think about hiring, all of that,” Lasri said.

“Last year they sold their company to Delivery Hero for just over €2 billion at the time. And they were thinking about how to professionalize their investment business. “I was already thinking about my next steps and then we started talking a lot,” he added.

While Yellow plans to invest in startups based in France and southern Europe, it also plans to invest in companies that want to quickly expand to Spain, Italy and Portugal. In that case, Yellow can act as a strategic investor and solve a number of problems that entrepreneurs could face in these new markets, such as supporting talent, regulatory hurdles, and introductions to large companies.

The yellow team will be divided between Paris and Barcelona, ​​leaving Oscar Pierre and Sacha Michaud in Barcelona. They will maintain their executive roles at Glovo, the on-demand delivery company that was acquired by Delivery Hero. But Pierre and Michaud have already been quite active as angel investors. Yellow is just one way to take this activity one step further.

Adam Lasri will be based primarily in Paris and another member of the team will soon join the fund. Víctor Navarro, a venture capitalist who worked for K Fund, will also join the Yellow team in Barcelona.

From 0 to 30 million euros in five months

Interestingly, Yellow’s founding team managed to close this seed fund in just a few months. They began their fundraising effort in June and managed to reach their goal in less than five months.

Behind the scenes, more than a dozen European unicorn founders are investing in Yellow, as well as a dozen family offices from Spain, Italy and Portugal. Some of the richest people in southern Europe are limited partners in Yellow’s first fund. The company did not receive public money for this fund.

It seems to indicate that there is some appetite for more venture capital funds in southern Europe. Of course, only in Spain there are many funds, such as K Fund, Nauta Capital, Kibo Ventures, Seaya Ventures and Inveready; This list is not exhaustive.

But if we look at the numbers, a recent negotiating room report highlights the discrepancies between the three main European countries when it comes to initial financing and the rest. During the first half of 2023, UK-based startups raised a total of $11 billion. Germany and France followed suit with $6 billion and $5 billion respectively.

In Italy and Spain, startups “only” raised $1 billion and $744 million respectively during the same period. Portugal is not even part of the top 15 countries.

Does this mean that there are fewer startups in southern Europe? Or does it mean there is still untapped potential in the region?

Spaincap annual report shows that international venture capital companies are increasingly looking for opportunities in Spain. In 2022, Spanish funds invested a total of 430 million dollars in local startups (400 million euros), while foreign investors invested 1.7 billion dollars in Spanish companies (1.6 billion euros).

Some foreign investors could be looking for opportunities in underserved markets, as their local market could be overheating with too many venture capital firms fighting for the same deals. And this distortion between local investors and foreign investors could explain why family offices in southern Europe are willing to back a new local fund.

This VC gap validates Yellow’s positioning. Now, let’s see if the venture capital firm can deploy this capital into successful startups and turn a thesis into investment returns.

Natasha Lomas contributed reporting.

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