Xavier shared with me recently the excellent piece of Fabrice Grinda about FJ Labs Investment Strategy. As an echo, I wanted to publish a post about Kima Ventures.
Kima is the Angel Investment Arm of Xavier Niel, the owner of Iliad, Station F and 42. We are a team of three people (Alexis Robert, Jeanne Cluset and Myself), acting as a proxy of Xavier to invest in 100 new deals per year.
Xavier Niel
Xavier has been investing for more than 20 years in startups. However, it’s in 2010 that he decided to become the most active business angel in the world. I believe it is true with close to 1,000 investments to date.
You can read about Xavier on Wikipedia of course, but I think it’s interesting to understand the character beyond some facts. He is one of the most respected entrepreneurs of his generation in France and Europe. One thing that strikes people when they meet with him is how nice and approachable he is. He is genuinely interested in your story, listen to you, ask relevant questions and make sound comments. Despite his natural aura that comes with his stature, he is always trying to make people comfortable around him, surrounding himself with young ambitious profiles and always trying to learn from younger generations. Kima Ventures, in a way, serves this purpose as well. Another fascinating aspect is how responsive he is. If Flash was playing against Xavier to answer emails, he would definitely lose. Whenever I am in front of an audience, I give Xavier’s email to someone without a single instruction and bet anything that he will reply within 2 hours. I have never let Xavier know about that little game, and he has always replied within 2 hours. Note that he receives more than a thousand emails per day and answers personally to every single one of them.
When people ask us what it takes to work with Xavier, the answer is simple: be nice, be efficient, be honest. Take it from there.
Strategy
In 2010, when Kima Ventures started, it was about investing all over the world in any sector and nationality up to $150k seed checks in up to 100 new deals per year. Of course, the landscape has changed over the years as it always does and we had to adapt our strategy.
Back in the days, in 2011 and 2012, we had access to deals like Carta and Transferwise. Not anymore since the distance in space and time between founders and funders has decreased tremendously. Founders raise more money, quicker, and closer to them. It’s one of the many things that has changed in just 10 little years.
With more and more french entrepreneurs and more concentrated networks of founders and funders everywhere, we had to narrow our strategy and decided a couple of years ago to focus on funding French founders in tech almost exclusively, all over the world.
Also, let’s be honest about another thing, it’s more challenging to build a sense of community or belonging with a portfolio from many nationalities, dispatched all over the world.
Dealflow & Investment
With Kima Ventures, we invest around $150k from pre-seed to series A in 100 new startups per year, only once per company.
It would send too much signal to invest during following rounds in some companies and not others. Also, like a date, it’s easy to say yes or no the first time, it’s trickier the second time, and we don’t want to leave bitter sweet impressions to entrepreneurs who have chosen to work with us.
For those who wonder where our dealflow come from, mostly from our network of founders and co-investors, but also more and more from our in-house tool for deal sourcing. The necessity to build this tool was that companies raise money so fast that we must detect them as soon as possible and not wait for someone to talk about them.
Also, in order to stay alert and see what’s happening in the market, we have a tinder for dealflow that allow us to screen what’s happening on product hunt and several media sources.
In total, we source somewhere around 200 to 300 deals per week.
Kima is a fascinating venture for our team! Whenever we speak with a founding team who share passion, ambition, obsession, resilience, talent… We wonder what could possibly go right; and if we believe there is a match between a market opportunity and a team that we like, we go for it! It takes probably 30 minutes to decide whether or not we want to invest.
The size of the rounds getting bigger and bigger, we tend to be followers, but when a founder requires from us to lead their round, we happily do it.
Regarding the exits, we aim to stay for as long as possible, we have no exit horizon whatsoever. Also, we have noticed that our best performing companies often go from 0 to 1 in 5 to 7 years, and then double their valuation after 2 to 3 years and again in the following 12 to 18 months. Therefore, the longer the better.
Note that we only work with the law firm of the company and take no lawyers on our side (zero fees the past five years). We try to be as efficient as possible in order to close with simple terms in no time, so that entrepreneurs can focus on what matter.
Portfolio management
We are a pretty small team to deal with new opportunities, make deals and manage a portfolio of close to 900 companies. We don’t make false promises. We are a joker in the hands of the founders that they will never regret. Our job is to be efficiently instrumental, to maximize our impact by the minute, not to brainstorm for hours. If we don’t know, we either connect our founders with the right people in our network or we stay silent.
We learn so many things from our interactions with the founders and their reports. It allows us to build a machine of reflections to better assess new opportunities and also share insights with entrepreneurs in a very concrete way, whenever it is possible. Just this week, you could ask the founders of Mojo, MWM, Athenian, Payfit, Unlock, Imparfaite, DICE or letsdeel.com…
We don’t try to sound smart or to brainstorm, we share what we’ve observed and we let them grab what could be useful to them.
You tell us about your OKR, we will share with you that every single company took three quarters to nail them and that the process of running OKR matter more than the OKR themselves. We will emphasise the critical importance of the weekly reviews to measure progress.
You share your deck for your next round of funding, we will get back to you with a 10 minutes Loom review full of feedbacks and impressions.
You wonder how to step up your game as a CEO, we will introduce you to an instrumental coach.
On top of that, founders access to our portfolio management platform, payitforward.vc, from which they are able to…
Benefit from perks;
Ask questions to the community;
Share one-to-many resources (resume, office space…) on various channels;
Require introductions to services providers or portfolio companies.
If you want more info about how things work at Kima Ventures, this post is still accurate in many ways…
Performance
People say that a decent performance comes from doubling down on the winners. We have two periods of investments. 2010 - mid 2015 when Jeremie Berrebi was in charge of Kima Ventures / mid 2015 onwards when the new team took over. The total invested is 110M€. We must say that the returns are pretty steady so far.
Also, from mid 2015 onwards, our IRR on realised investments is 59.4%, and 29.2% on unrealised investments.
Things to come…
We have built a software in order to share our committed deals with other business angels and venture firms but the process could be improved.
We are still fine-tuning how slack and whyse can become instrumental tools for peer learning and support.
And of course we are open to any suggestion from anyone to beef up our game and we are likely answering any questions as well :) We thrive for new challenges !
Excellent post Jean ! Thanks for sharing.
I would be interested in joining the slack or business angels...