Founders, Never Lose Sight of Breaking Even!

Fil Rouge Capital is a venture capital investment fund based in Croatia, which was listed among the 10 most active VCs in early-stage deals in the EU this year. Its primary goal is to invest in entrepreneurs, startups and scale-up companies.

We talked to Julien Coustaury, Managing Partner at Fil Rouge Capital Venture fund and got some really interesting insights.

Read the full interview below.

You’ve got some great startups in your portfolio. What do you look for in a startup as you evaluate it for a potential investment?
We are fortunate to have many high-growth startups in our portfolio; some are very well known, like Flaviar, Metaloop, and TVbeat, and some are a bit earlier in their development phase but growing fast, such as Native Teams, Bloqit, and Lebesgue. As financial investors, we, of course, look for a positive financial outcome but all those companies have a common trait, they all have founders who are great to work with. Most of them I can now call friends, which is THE key to what we are looking for. Running and investing in startups is full of ups and downs and it is always better to go through those phases with founders you get along with well.

This year, you were listed among the “10 most active VCs in EU early-stage deals”. How many deals have you closed in the last year and what are the greatest achievements of your startups?
We did 37 deals in 2022. Among some notable achievements are Metaloop, Lebesgue, and Bloq.it.
Metaloop secured a spot in the Top 3 of Austria’s Fastest-Growing Companies, as revealed in the FT1000: Europe’s Fastest Growing Companies 2023 ranking by Financial Times and Statista. This impressive achievement reflects their commitment to growth and excellence as they strive to create a more sustainable future for their clients, collaborators, employees, and the environment.
In March 2023, Lebesgue became the first Shopify app with GPT-4 integration, which they achieved in just 72 hours since being whitelisted! Just for reference, only 5 companies in the world have successfully done this so far!
And Bloq.it broke the world record last December with 30 Smart Lockers deployed in a single day. Bloq.it is providing the world’s leading smart locker solution. Solving last-mile and enabling everyone to participate in e-commerce across the EU, MENA, LatAm, and the US.

Europe saw the slowest fundraising quarter for six and a half years in Q1, based on the Sifted research. What are your comments on this number?
There is clearly a correction and I would say a much-needed one, valuation went sky high with no real justification other than the hype. We are very lucky that, in our region, there is still plenty of capital, so in the short term, it will be good to be a founder in Central Eastern Europe. Obviously, we are still hoping for a quick recovery in the EU/US as the tendency is to move west from here to raise a series B and up, so mid-term, there is indeed a risk for our startups not to raise. That means one thing, something we have been adamant about in all our communications with founders: never lose sight of breaking even!

When can we expect your next fund? Can you tell us a bit more about it?
Besides maintaining relationships with our existing and prospective LPs, we are not actively fundraising at the moment. However, we expect this to change towards the end of the year and we expect our new fund to start in 2024.

How long do you usually evaluate a startup before making an investment?
Our process is very well-defined and very transparent. We have dealflows reviews (pre-screening) every Tuesday, so a maximum of 7 days from the day you upload your raise details on our web portal. From then on, it can be very quick; from 4 weeks to 6 weeks from pre-screening to money in the account, and it will be faster for our next fund.

Is there something that especially excites you when looking at a promising startup?
My first thought always goes to the founders and how exciting it is going to be to work with them. From the day we decide to invest, I can’t wait to deploy the money and get going!

What would you say is more important – a startup’s idea or its founder’s persona? Why?
Clearly, the founder’s persona. When you invest in very early-stage companies, the idea can evolve (heard of pivots?), but the founder always remains the “Fil Rouge” (get it?) of the company and, eventually, what makes it successful or not.

What kind of startups are you looking for at Podim?
Podim has always been a great source for finding startups and reconnecting with the one we have under “watch”. As usual at Podim, we will be looking at making first contacts with very early-stage startups driven by insanely ambitious founders.

What’s the best advice you can offer to startups attending Podim?
Podim gives you the opportunity to meet each other in the Deal Room; just use and abuse this; all our investment principals are at Podim and ready to book meetings there!