Felix Capital At The Intersection Of Creativity And Tech

Felix

More than 30,000 people will converge on Dublin for this year’s Web Summit, including scores of eager entrepreneurs hoping for an encounter with the right venture capitalist. Some 2,000 meetings between VCs and start-ups have been pre-scheduled through the conference. But winging it can also be a winning strategy, so it is important to know which investors will be at the conference and how to approach them.

Felix: Les Gabb, Frédéric Court, Antoine Nussenbaum

Among the 1,000 investors strolling the start-up booths will be VCs from London’s Felix Capital, a $120 million fund formed in April, which is seeking to connect with founders focused on creative industries such as fashion and music, including both consumer businesses and related technologies.

Frédéric Court, formerly of Advent Venture Partners, along with Les Gabb, also from Advent and Antoine Nussenbaum, who previously worked at Atlas Global and ABN Amro, founded the firm, which specializes in digital commerce, digital media and connected life including technology and well-being, areas in which the firm says it has “conviction and domain knowledge.”

So how should start-ups pitch to them? “We are interested in entrepreneurs who focus on the intersection of creativity and tech, especially those who create new digital brands for both products and services, in an authentic and organic way,” says Court.

Court and Nussenbaum will both attend Web Summit this year, which is not surprising given that music, food and fashion are the focus of three of the 21 summits within the Summit.

“Europe has a strong heritage and a real competitive advantage on a global scale in the creative industries, “ says Court. “By being focused we have a better chance of pinpointing companies earlier.”

While at Advent Court was an early backer of Farfetch, a global online marketplace for independent fashion boutiques founded in Lisbon in 2008. The company is on track to generate $500 million in sales in 2015. Felix Capital participated in Farfetch’s recent $86 million E Round and in a follow-on round in London-based Business of Fashion, a digital platform for the fashion industry which Court originally backed as an angel investor.

Digital Means Opportunity For Designers

But Felix Capital is also backing some newcomers, including France’s Rad, a fashion brand and marketplace that specializes in “cool streetwear” clothes, and Unmade (formerly known as Knyttan) a UK start-up founded in April 2013 by three students at London’s Royal College of Art. Unmade aims to disrupt the $200 billion knitwear market with technology that turns industrial knitting machines, which make 20% of the world’s garments, into the equivalent of 3D printers for clothes, enabling users to design and ‘print’ their own customized sweaters, scarves and other knitted items.

“We think with digital that there is an opportunity for designers, for creators, for every creative segment, to go direct, to find their voice, to find their audience online, especially through social media,” says Court. “We are actively looking for fashion brands, even just things relating to design, where people are building on top of social media. We really believe in these opportunities.” He points to Rad as an example. It is one of the top five fashion brands on Facebook in France.

“The other elements that we are very interested in when it comes to fashion are where the technology is disrupting retail, particularly mobile tech; making new tools available to retailers so they can get to know their customers better and link offline to online — anything that reinvents the customer relationship and makes it more digital and smarter.” Examples of companies that fit into this category include French online marketplace SaaS vendor Mirakl and Olapic, a New York-based visual marketing SaaS vendor created by Spanish founders that helps brands like Coach, L’Oreal and Pepsi leverage fan photos on Facebook, Instagram and Twitter. Both snagged investments from Felix Capital in the last few months.

Food is also a focus. Court says he is proud that the entrepreneurs behind France’s La Ruche qui dit Oui, a site which digitally connects local food makers to consumers, said yes to Felix Capital as the start-up had strong interest from a number of VC suitors. (In addition to Felix Capital the company’s €8 million Series B round ended up including Union Square’s Fred Wilson, with XAnge and Quadia also participating).

Emotional Relationship Between Products And Services

La Ruche, which launched in France but already operates in several European countries, lets consumers choose a hive (the English word for ruche) of local foodmakers closest to them and select on La Ruche’s site or app what is on sale that week. Local foodmakers then directly sell their goods to the end consumers in the closest hive in their city.

Court says he sees similarities between La Ruche qui dit Oui and Farfetch as both start-ups give a voice to small independent producers of goods and enable them to connect directly to customers. “The local producers love what they do and take great care — in their craftsman kind of way — in making their products, but they struggle with distribution,” he says.

“We love start-ups that are not just about execution but have more of a mission to create an emotional relationship between products and services and consumers, we like to see start-ups do a lot with limited funding originally and provide demand for the service in a capital efficient way, building a business that is resilient and has potential to scale. We are very different than Rocket Internet, for instance,” says Court, referring to the German internet company headquartered in Berlin that builds copycats of existing Internet retail business with models that are all about execution.

The VC firm’s partners said they chose the name Felix Capital because they wanted a name that “is approachable, personable, reflecting our style — professional, but with a sense of humor — and not just full of testosterone like many VC brands.”

Rash Of New Funds

Felix Capital is among at least nine new funds launched in London since the start of 2014. Others include

  • Mosaic Capital Partners, founded by tech industry veterans Toby Coppel, Simon Levene and Mike Chalfen;
  • Google Ventures;
  • 83North, a $200 million fund set up by Greylock Ventures;
  • Hoxton Venture Partners, founded by tech industry veterans Hussein Kanji and Rob Kniaz;
  • Keen Venture Partners, a €200 million fund led by Ben Verwaayen, the former CEO of BT and Alcatel Lucent;
  • LocalGlobe, a fund co-founded by Saul Klein, formerly of Index Ventures, and his father Robin Klein, an active seed investor;
  • InReach, co-founded by Roberto Bonanzinga, a former partner at Balderton Capital;
  • Business Growth Fund, a £200 million fund founded by Harry Briggs, a former partner at Balderton Capital, Rory Stirling, a former partner at MMC Ventures and Simon Calver, the former CEO of LOVEFILM.

Felix Signed One Music Deal So Far

Felix means “happy” in Latin. “That’s our way of saying that we want to back entrepreneurs who are focused on product, on making their customers happy,” the firm says on its website. “Felix also means ‘lucky’ in Latin, which always helps for an investor.”

Felix Capital has so far done one music deal — a New York-based start-up called UniqueSound, a platform for music composers to showcase their work and get hired. Court, an early investor in French video-sharing website Dailymotion, says he believes there are also lots of opportunities in Europe for music and audio beyond Spotify and SoundCloud. “There are quite a few things growing organically. Examples include Mixcloud, NTS Radio or Boiler Room. Labels are much more open to experimenting so it is not impossible to see a new platform emerging,” he says.

Other Felix Capital investments include Urban Massage, a UK start-up that offers an Uber-style on-demand massage booking service.

Felix Capital makes investments in early- and later-stage companies and will invest anywhere from $100,000 to $10 million. “We are agnostic on where the start-ups are located,” says Court, a Frenchman who moved to London 20 years ago. He has also lived in the U.S. and Italy.

High-Profile Advisory Board

One of his early investments as a VC was in Geneva-based Zong, a mobile payments company sold to eBay in 2011 for $240 million. (The founder was David Marcus, who later became President of PayPal and is now a VP Messaging Products at Facebook.) Felix Capital’s advisors are one of the things that set the fund apart.

Marcus is just one of a number of high-profile tech industry players who have lined up to serve as advisors. Others include:

  • Reggie Bradford (a senior vice-president of product development at Oracle and founder and former CEO of Vitrue);
  • Rene Rechtman (President International at Maker Studios, formerly a senior vice president at AOL International);
  • Jon Kamaluddin (a board member at Klarna and a former director and CFO at ASOS);
  • Sebastian Picardo (Chief Retail Officer at Lane Crawford, ex-managing director of digital commerce at Burberry and a former CFO at Net-A-Porter);
  • Julien Codorniou (Director Global Platform Partnerships at Facebook, previously Business Development Director at Microsoft);
  • Christophe Maire (CEO of Atlantic Labs, founder of both Textr and Gate5);
  • Lopo Champalimaud (Founder and CEO of Wahanda, ex-Managing Director of European Lifestyle at lastminute.com);
  • Pelle Tornberg (Senior advisor to Ericsson, ex-Metro, MTG, Kinnevik);
  • Henri Moissinac (head of mobile partnerships at Uber, previously head of mobile partnerships at Facebook and senior director, head of eBay mobile);
  • Tom Ryan (CEO Pluto.tv, previously CEO of Threadless and Vice-President Digital at EMI).

Court chalks up Felix Capital’s success in attracting advisors and entrepreneurs to the fact that it “is a very focused fund – we are very clear on what we do and what we don’t do – which makes us much more relevant to founders. The partners have a track record of success and then there is the quality of our network as well as the quality of our access in Europe and in the U.S. Over the years we have built a good reputation in the market which helps to make us a partner of choice for founders and other investors.”

So what’s the message that Felix Capital wants to get across to entrepreneurs at Web Summit and elsewhere? “We want to be good partners, we want to earn the right to back founders, we want to be there to support them and not to tell them what to do. The partners in Felix Capital are entrepreneurs in venture capital – we took a risk starting this firm – so we can relate to their journey.”

Let the courting begin.

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