Emanuele Levi (360 Capital Partners): Our history of finding successful companies that we have been able to support since their very early days and have worked with for many years speaks for itself
08 Oct, 2021
Bilal Mekkaoui is Co-Founder & Managing Partner at JOBI Capital. He has 17 years of Investment Banking and Investments experience. He was Head of Investor Relations at Delivery Hero, responsible for evaluating the possible IPO and securing on-going financing, and Managing Director at Rocket Internet, raising over $3B of private capital over 3 years.
I’ve always focused on tech to a certain degree when I started my career in investment banking, where did M&A TMT focusing on the tech sector. I ended up joining UBS for equity capital markets, which is looking at companies, preparing them for IPO, and going public. I really shifted in the tech space in 2012, when I joined Rocket. It was kind of going into incubating tech businesses and going into the VC space. Having done that and working for Rocket Internet where we incubated a lot of businesses, I joined Delivery Hero – one of the largest marketplaces for delivery businesses. Having done all of that, getting the Delivery Hero ready for an IPO, I started to look at investments in the Tech space where I can add value. In 2016 I set up Jobi Capital. The point of our fund is to look at investments in the Tech space and, rather than just bringing capital, take them to the next level. It’s taking an active role, sitting on the board, really working closely with the founders to help them either through geographical expansion or through Introducing them to the retail network that we have – hence why we focus on consumer retail tech.
It’s crazy how quickly you can build companies. It took years and years in other Industries to establish very large companies that, in this case, you could by identifying the right team and the right product, expand very quickly and become very big. And you can, also, make a difference in today’s world. That’s what entices me in the VC world. It is very exciting to work with young hungry founders who have long-term visions and help them.
There’s a lot of different startups we’ve looked at or come across, but to me, the most interesting is working with startups that have managed in a very short period of time to penetrate large markets. For example, the whole food deliveries marketplace space is quite interesting because at the end of the day you’re connecting 2 people – and you acting in the middle. I focus more on Consumer Retail tech and come across many interesting businesses across the way. I think Delivery Hero has done extremely well. Also, celebrity-baсked businesses are a very interesting space that we’re looking at, which I think is also very interesting in today’s world – market-creating products that are needed, that have a sustainable angle, that have a story and bringing it to life. That’s what we’re doing at Jobi brands which I find very interesting.
We do both. There are some interesting companies that we scout for, there are opportunities that you come across when people end up contacting you, either because they know you, have heard of you, or that you have access to some means when you can help them – with capital or by expanding geographically or by your experience. But generally, it’s going after companies where you get introduced by other founders, other friends in the space.
We review many. Usually, from inbound, we end up meeting 5 to 10 people or companies a week. It varies a lot and it also depends whether your fund has money to invest or not, because sometimes your funds get fully invested and you end up looking less on a lot of different businesses and can it be more focused on what’s going to add value to the business you already have in a portfolio.
About half of that, and probably between 5 to 10% almost reach the last mile before you make an investment.
It’s Consumer Retail tech and everything within Consumer Retail space – E-Commerce, Marketplace, Software within that ecosystem which is the Consumer Retail world.
Fintech is an industry, I think, that is very interesting but I just don’t invest in it. BioTech is another one. Renewable energy is the third.
We look at pre-Series A and Series A type businesses.
We are based in New York but will look at US and European-type businesses if we can help them to go international within our retail space.
I wouldn’t say that much, because the fundamentals are almost the same in terms of founders trying to create companies. It is a valuation that can be different in the US and in Europe. But in terms of talent and all of them – they are very similar.
It depends on the stage of the company and whether or not those specific businesses that are raising have other investors and which fund leads the round. It can be as little as 2 weeks, but it can take us 2-3 months to close the deal.
It’s a mix of both. Numbers are quite important, but it is important to get the vision of the actual entrepreneurs or the founders, to see their excitement of how they want to achieve their plans – backed by numbers. I wouldn’t call this a show, though.
We are looking for very hungry, skin in the game, having very strong experience on an execution level in the past, knowing the big picture, and having the right team founders.
Yes. We supported the company called MORI in the UK – it is an E-commerce baby clothes company. Another one is Orchard Mile which is a luxury marketplace based in New York. There are a few companies that had a single founder with a strong team.
If founders are more concerned about their package and all of that as opposed to the outlook of their business, it’s a red flag for us. Another red flag is not diversifying enough your investor base. We also look at a proposed runway and what’s the plan of burn vs growth.
We are taking an active role, so we are continuously speaking to them and trying to help them, connect them to other people that we think could bring value to the actual business.
Overspending. The usual mistake is where they end up overspending or overhiring. Still, there’s no right or wrong answer, but, I think, you should always be careful in terms of how much money you have vs how much you spend.
It’s a hard question, actually. I think you need to have a 3 to 6 months runway – always with 3 months on the lower end.
We’re looking at 3 to 5x from a fund perspective. Some businesses, obviously, will make much more. Ideally, I would like to have 10x, but on a realistic basis, 3 to 5x is good.
Again, it depends on the story. Sometimes you own 10% of a business and you want a build up your steak, in other cases, you want to have 25-30%. I don’t think it’s the number on the percentage of ownership, rather it’s the number that makes sense to help a business.
I wouldn’t say so. There’s a reason why you end up investing in a business, there’s a reason – at that time – why you rejected it, wishing the best of luck. There are certain times in my own personal investments I wish I’ve ended up buying more, but it is what it is.
Hungry teams. I’m looking for hunger and execution.
COVID reinforced, in fact, the whole tech world and tech space. And it forced everyone to be mindful, to always plan for unexpected things, to have some backup. You never know what’s going to happen.
What I’ve seen in the VC space, it’s been an opportunity. A lot of conversions has gone online for a lot of business.
Sometimes yes. Sometimes I think that the long-term opportunity of combining them at a certain point will benefit both and I try to marry them.
There are various sources that we subscribe to, so I can’t name just one. Obviously, the news is very important, including those focused on the business world. We get a lot of information from other VCs we have relationships with, from our network. You get the scope of what’s going on with specific businesses and spaces in general.
I’d rather focus on the businesses I’ve come across which I thought were quite interesting, specifically in the space that I’ve mentioned. Delivery Hero is definitely one in terms of the growth of the business and how that is evolved. As well as ASOS to a certain degree. Obviously, Amazon has revolutionized the space. It’s the number one thing that comes into your head in terms of growth and how it continues to grow.
It is more checkers than other games.
To be a good VC you need the mindset that you have to help the business you’re investing in, to help founders to achieve their goals. You cannot think just about the exit and numbers, you should consider how can you add value to these businesses as much as possible while targeting a certain return. You can achieve it from your own exit scenario, but also really creating and building their businesses to the next level.
Their dedication to their business.
Listen to others. Stick to your game. Always make sure you have a runway.