Quo vadis Rebate Networks after DailyDeal sale to Google?

29. 10. 2011 § Leave a comment

I had interviewed Michael Brehm, CEO of Rebate Networks, back in February for Forbes Croatia and the EuroGeeks book. On hearing the news that Rebate had sold DailyDeal, their „DACH“ (Germany, Austria, Switzerland) group buying operation to Google, I asked him for a chance to catch up on Rebate’s development thus far, the Google deal and particularly plans for next steps.

Michael Brehm, CEO of Rebate Networks

We didn’t focus much on the deal itself, but previous reports, particularly Holger Schmidt’s Frankfurter Allgemeine online piece, had outlined it. According to Schmidt, the sale price was anywhere from 150 – 200 million USD, and Rebate Networks was reported to take a third of this amount, alongside the founding Heilemann brothers, the Insight Ventures VC fund and a smaller chunk to swiss Adinvest.

This wasn’t the first exit for Rebate. Just this June Rebate sold parts of their Asian network – Thailand, the Philippines and Indonesia – to US-based LivingSocial. At least part of this latter deal was an equity swap so Rebate now has a stake in LivingSocial.

Was there a specific strategy for selling these assets, I asked Michael when we spoke?

„In each of our properties we are working closely with the founders of that company who are always significant shareholders. Therefore, we evaluate every business opportunity carefuly. Regarding the Asian transaction, as well as the European one, the package in both cases was an attractive one, both for Rebate and for our partners in each of these cases. You could say that, rather than having a specific strategy for selling or holding on to assets, we go case by case.“

Now that they have a significant war chest courtesy of Google, can we expect Rebate to move aggresively into new markets where they are not present yet?

„The group buying model is by now very established and it’s difficult to build from scratch in any market. The global trend is for larger companies to grow through acquisitions. Although I wouldn’t exclude anything, our focus is primarily building and growing our business in the markets where we are already present. We are really happy about the way these markets are developing. The specific steps we might take depend largely on the circumstances in each market and on the judgment of our teams on the ground. We want to be quite careful with potential acquisitions – in general, we prefer to grow organically but, as I said, I wouldn’t exclude anything out of hand.“

The interwebs have seen a ton of discussions and commentaries on the best-known group buying company, Groupon, and their (so far) ill-fated preparations for an IPO, featuring – among other „interesting“ moments – the current owners taking 870 million USD into their collective pockets from previous investment rounds. I was curious to hear how a potential wave of negative sentiment towards group buying in general, sparked perhaps by the Groupon controversies, migh affect Rebate?

„We have been in the business for two years. All of our data shows that, overall, both the end customers and the merchants find this to be a very, very attractive value proposition. So – we don’t worry about the competition that much. From our point of view, if you deliver value to your employees, customers and merchants, you will succeed. Part of our mission, also, is education. There is a need to educate the markets and customers about how these relationships can work best.“

It’s going to be an exciting show following the next moves by Rebate. Those of us from Eastern Europe will be watching particularly closely, as Croatian-based Kolektiva, part of the Rebate family, continues to hold a strong leading position in Croatia, amongst dozens of other „Groupon clones“, but has also successfully expanded into 4 other regional markets: Slovenia, Serbia, Macedonia and Bulgaria, giving this „subnetwork“ within the Rebate portfolio a reach from Ljubljana in the West all the way to the Black sea in the East.

Fingers crossed for Michael, his partner Stefan Glaenzer and the whole global Rebate team!

Seedcamp week 2011 – teams & finale

12. 09. 2011 § Leave a comment

I’ve been following Seedcamp one way or another – mostly as a mentor at Mini Seedcamps, and now at Seedcamp Week – for some time now. My first mentorship was Ljubljana 2009. Two and a half years might not be much for some businesses, but the European startup community has developed and matured significantly in this short time, and of course Seedcamp with it.

Imperial College London - the venue

This was most clearly visible to me at Mini Seedcamp Ljubljana earlier this year. From 2009 to 2010 and now 2011 the rising level of quality and maturity of the teams and projects was clear and obvious to many of us who were there, and one of the dominant topics of discussion. Bringing together the best teams from all the Mini Seedcamps to London only reinforced that observation – as I’m sure many of my mentor colleagues would agree. Seedcamp as a project is growing as well, adding people to the team, money to the fund and new venues and partnerships – but you can read all about that on their blog and numerous other sources.

The emergence of Eastern Europe as a hot startup region has been acknowledged by both Fred Destin and Robin Klein.

St Robin of Klein, patron saint of Seedcamp

To me, coming from Croatia, that in itself is extremely gratifying. Only a few years ago, when discussing strategies of exporting software or services with colleagues from other companies, many commented “Hide your Croatian roots deeply, no one from the West will trust a company from this region.” While this may actually still be true in enterprise software to a degree, it gives me such great pleasure to see that in the world of startups, saying “I come from Eastern Europe” is starting to be a positive thing, implying in some way that you are “trendy” and “hot”. Of course this is a somewhat frivolous and perhaps temporary thing – but nevertheless, for so many engineers, enterpreneurs and founders from this part of the world, it’s a tremendous point of satisfaction. Just for the record, after Mini Seedcamp Ljubljana we have put together a Facebook group with most members coming from this region, and for the purposes of that group and this discussion I’d like to state things more precisely. From my point of view, “our region” is something I call “New Europe”, and when I say that I mean a bunch of formerly socialist countries – some of which are now EU and others not – stretching from our #EstonianMafia friends in the north to Turkey down south and including former Yugoslav countries but also Austria. Austria has – of course – centuries of tradition and heritage to share with all our neighbours, but more importantly great ties are developing  between the startup community of Vienna and all of us others in this “New Europe” region. In any case – if you want to join our “New Europe Startups” group on Facebook – welcome!

As I’ve mentioned before, a basic distinction could be made this year amongst the projects which were in already well-defined and well- populated areas and those that were breaking new ground and / or attacking new spaces. Mind you – going into an already established area isn’t bad in and of itself. All you have to do is beat the guys that are already there, and – it’s been done before!

Now – let’s look at some of the teams:

Vox.io wants to displace Skype as your Internet phone. With an elegant concept and super simple interface, they generated not only many favourable tweets (“This is the future of communications!”) but more – as I’ll explain later in the post. The VoIP space is crowded and hot, and Skype is certainly not sitting on its laurels, so Tomaž and his teammates – freshly transplanted to San Francisco from lovely Ljubljana, Slovenia, have their work cut out for them.

“Renting is broken!” declared the Rentlord crew, promising to move us beyond real estate agents who don’t give a crap about our flats into social renting, connecting landlords and tennants directly to provide a much more efficient platform to conclude their business. If UK and other markets are anything like Croatia, I’d say that at least their battle cry is totally spot on.

Clearly startups are meant and expected to disrupt industry sectors and markets, so “this is broken” and “we will disrupt this industry” can be heard many, many times at Seedcamp and other startup events.

Another project shooting at a broken market – in this case, online dating – comes from Russia with – presumably – love… a lot of love that might be generated if Zin.gl (which I mentioned in my previous post) is really so much better than what’s out there today. I have a few friends who have been frustrated by online dating sites, so if Alexander can really make this work so much better as he claimed in his pitch, he might be on to something. I need to note, though, that I’ve heard of new dating sites quite often in the past few months – will be interesting to see who really pushes ahead of everyone else, and how this will develop from market to market as it’s clearly very local content and customers.

Tomaž and Alexander discussing how to achieve world domination

GrabCAD started as two guys a year ago. Today this online community of mechanical engineers is the third largest group of these people in the world, just surpassing the benchmark of 25,000 members during Seedcamp Week. They aren’t quite seedlings any more, having raised 1,1 M dollars from top level VC’s and angels during the summer.

Transferwise lets you do currency exchange spending less – a lot less – money on banker’s fees. During the pitch, they explained that they have saved their customers – in the very short time since they launched – more than 100,000 Euros in banker’s fees. “That’s at least one banker not getting his bonus this year” was their remark, to the great satisfaction and admiration of the money-conscious investors in the audience. “Where have you been until now?” someone shouted “I’ve been waiting for something like this forever!” What better remark could you hope from this demanding and critical crowd.

I could go on and on about the teams and pitches but the post would really be too long. So I’ll just say a few words about my – but not only mine – favourite team. Clearly I’m not objective since the Farmeron guys are from my native Croatia – but at least that’s full disclosure :-))

I first heard about Farmeron when preparing for Mini Seedcamp Ljubljana earlier this year. They want to help farmers work better and feed more people by bringing them sophisticated, yet easy-to-use and nicely presented analyitics for their farming (think Google Analyitics for your cows and corn). My first thought was – wow. What a wide open space! This was not “yet another Groupon” or a clone or lookalike of anything I’d heard of before.

Hearing their presentation then and again now I was really impressed. There are more than 160 million farmers out there who are their target audience. These guys know their farming, both from family tradition and from university studies. The web site design is simple and cool and attractive. Perhaps most telling of all, however – I was clearly not alone. In the discussions amongst mentors in Ljubljana and in London as well, and of course online on Twitter, you could see that Farmeron had gained the sympathies – and, more importantly, the business interest – of a group of hardened, experienced and often sceptical and critical people who are the Seedcamp mentors. Besides all that – the guys are really nice guys :-)) (So are all the others, by the way, so that’s no competitive advantage!)

Matija (Farmeron) and Vanja (GISCloud) - #CroatianMafia w/ investor

Coming into Seedcamp Week, they were one of the 16 teams who had already been selected for investment by the Seedcamp crew, so in a sense they were already winners and on the way to great things. As the Seedcamp blog points out, of the previous portfolio fully *90%* of companies had received follow-on funding – a superb track record.

Well… after Demo Day on Thursday we came back together on Friday to hear the final announcements. There were fewer people than the day before and the atmosphere was more relaxed now that the grueling schedule of prezos and mentoring sessions was all done.

A competition had been announced at the beginning of the week. Mentors received a form to grade the teams, and whoever we voted to be the best would get a 25,000 Euro cash prize. The second team would get 15K and the third 10K.

Straight to the point, Reshma announced the winners – the fantastic GrabCAD crew. Hardi Meybaum, founder and CEO, then walked to the stage and, without missing a beat, thanked everyone very very much and explained that, as they had already received sizable funding, they wanted to give back to the community so they would give their prize to – Farmeron!

I tweeted this feverishly on my little HTC phone and this was probably my most retweeted tweet of all time. Great move by the #EstonianMafia representatives!

Next came another announcement, which was not as spectacularly reported but was, in my opinion, just as important. Saul and Robin Klein, through TAG, offered five of their favourite teams a convertible bridge loan of €50,000 each to “extend their runway”. These teams were – you can probably guess some of them by now – GrabCAD, Farmeron, Transferwise, Fractal (makes sure your email newsletters are properly formatted) and Vox.io. Another home run for the New Europe gang!

Finally, the four teams that were not yet funded coming into the London event – Blossom, Rentlord, Appextras and Crowd – were all welcomed to the Seedcamp family as new portfolio companies.

Reshma to the exhausted survivors: "Onwards and upwards!"

All in all – a great event taking Seedcamp and all the participants – but mostly the portfolio companies – to a new level. What will be the next steps for this community? I’ll offer some of my own thoughts in the next, final blog post of this series.

Seedcamp week 2011 – part 1

11. 09. 2011 § 2 Comments

„So… how did you like my presentation?“

The question from a Seedcamp enterpreneur was probably one of the most often asked during Seedcamp Week… I told Alexander, the founder of the dating site Zin.gl, what I thought about the project and the presentation. He was in a crowded space – I said – with zillions of dating sites all over the place. On the other hand, his assertion – that none of these were actually working well to the benefit of their customers – was true, at least as far as I had heard from my friends who use them. We went on to discuss the strengths his project has and the obstacles he was facing.

Our conversation was nothing if not typical for Seedcamp Week. The Seedcamp team had brought together an amazing group of European, US and Canadian startup teams to pitch their projects to a group of mentors and investors which it would have been hard for any other team to pull together. Here, in one room of London’s Imperial College, were some of Europe’s and the world’s smartest and most powerful angel investors and venture capitalists.

Seedcamp is the brainchild of Saul Klein and Reshma Sohoni. Introducing one of the sessions, Saul made a powerful statement: „There are 3 or 4 billion dollars of capital in this room. I guess that takes care of the myth that there is no capital in Europe for startups.“

Saul Klein and Dave McClure at Seedcamp

Back to my discussion with Alexander. As I gave him my impressions of his presentation and his project, he took out a notebook and feverishly jotted down much of what I was saying. Normally, this would not have been unusual. The whole point of Seedcamp is to connect startups with „mentors“ – those of us who are supposedly „older and wiser“ (as the song goes). Very often after speaking to founders I feel that although I am undisputably older, the second attribute is very questionable when compared to these guys. But anyhow…

This whole situation would not have been unusual were it not for the context. Alexander and I were not at Imperial College or any of the surrounding cafes. In fact, we were at „Frank’s House“.

Frank’s House had been communicated to everyone at Seedcamp as the venue of Thursday’s party. There was a  bit of confusion – was this a bar, club or restaurant called „Frank’s house“? In fact – no, this was the apartment of Frank Kelcz, a successful businessman who had graciously offered to host the party for all Seedcampers. So it was here, at Frank’s house, that Alexander asked me for feedback on his presentation. It was also 11.30 pm. Booze was flowing freely. Most normal people were talking about something else – wine, women, sports, music, art or… I guess … Frank’s apartment.

Chillin' at Frank's place after Demo Day at Seedcamp

This, to me, was the epitome, the symbol of Seedcamp. Alexander was so focused, so determined, so dedicated to his project that he had no problem pulling out a notebook and writing down – in detail – what I said in spite of the fact that we were at a party and it was near midnight. Moreover, he had been through the grueling process that is Seedcamp Week – multiple iterations of presenting your project to mentors, and then receiving feedback (not always positive, but that’s the point) and perfecting your pitch. It’s an exhausting experience, and this was Thursday in the week, and all normal people would have been either asleep or  chillin’. To be a founder of a startup in todays fucked-up world, however, you need to be abnormal in one way or the other. At that late, late hour in Frank’s flat, I thought “This guy is nuts. That means his partners placed a bet on a really, really tough dude.”

Needless to say, my thoughts and comments to Alexander were not „world-shattering“. Clearly he had spoken to many, many other mentors besides me and it was up to him to sort out all of the confusing, conflicting feedback he – and all the other teams – had received during Seedcamp Week.

I had been to Mini Seedcamp Ljubljana in July and was really happy to see a good number of teams from that event pitch at Seedcamp Week. In fact, Central and Eastern Europe has been really growing within the Seedcamp family, from the first portfolio members (Zemanta, Ubervu) to becoming – I dare to day – almost a dominating force. Without question, our region at this Seedcamp Week was led by the Amazing Estonians. Four projects – out of twenty – came from this small Baltic powerhouse with a population of 1.3 million people. The Twitter hashtag #EstonianMafia, apparently coined by Dave McClure, caught on and stuck throughout the week.

The Estonians were, however, only the most visible amongst the Central and Eastern European crews. Two teams each from Slovenia and Austria (which I count into CEE, but that’s another discussion), one from Croatia and one from Russia made up this formidable Eastern lineup. Investors have noticed this and I hear more and more interest amongst them to look more closely at what’s going on behind the former Iron Curtain.

But apparently it’s not just me. Let’s see what others have to say:

„The big “aha!” moment for me was to see how much talent, energy and passion we’ve discovered coming out of Eastern Europe.“ says Fred Destin of Atlas Venture, a Seedcamp investor and supporter from Day 1. Fred’s presentation on the life cycle of startups in Ljubljana was a totally inspiring event in and of itself, super cool for those of us who attended in person, but also available online.

One distinction during the event which I noticed was the one between crowded and empty fields. Many of the Seedcamp finalists were in “hot” areas where they needed to beat both established players and up-and-coming competitors. These areas include location based services (Oust.me), VOIP (Vox.io), dating (Zin.gl)… Others, however, were creating projects in segments that had not been approached by others before – at least not by many others.

All told – disruption seemed to be the phrase du jour, along with „broken“. Many sectors and industries were declared to be „broken“ by the ambitious startup founders: telecoms, financial services, online dating, renting out your flat… It remains to be seen, of course, whether our friends from Seedcamp will succeed in „busting“ these large, established industries. We all certainly wish them success.

I’ll get into discussing some of the teams in subsequent posts – watch this space 🙂

Seedcamp Week 2011 pics

10. 09. 2011 § 1 Comment

Well Seedcamp Week 2011 was amazing – surpassing everyone’s expectations which were already very very high.

As an intro to an upcoming blog post from my point of view, here’s a small picture gallery documenting some of the moments…

I’m using ZangZing for this – a startup I like for various reasons (even though it’s not European!), pushing into an extremely crowded space in a way that really works for me.

As with all family albums this will probably be most interesting to the small but powerful Seedcamp family :-)))

Sketches of #Seedcamp

18. 07. 2011 § 2 Comments

Seedcamp is always fantastic. This years Mini Seedcamp Ljubljana, however, was more fantastic than ever. Some of the highlights from my point of view:

Fred Destins “Startup lifecycle” talk was #epic. It was totally worth participating in Seedcamp for the teams just to hear that talk. Nice of Fred to post it online – unfortunately though the Prezi doesn’t come close to hearing it delivered live by Fred.

Fred was also the author of probably the two most memorable tweets of the event: “tip: dont talk to your slides, they’re unlikely to fund you” and “Gosh if I was gay I’d take a few of these founders home”

Mike Butchers hilariously delivered tour de force stand up comedy presentation of how to talk and how not to talk to the press. Being close to the stage meant I got my ear yelled to by Mike but luckily my ear and I are still both ok.

On day 2, BarCamp (a first for me) was also full of interesting and exciting presentations, including  Gregor Cuzak making everyone’s head spin with references to Godel, Zenon, Socrates, Aristotle and chaos theory. Predictably Twitter comments on this ranged from “bullshit” to “fantastic” – which is great imho when you’re doing a presentation.

Everything was as well organised as it could possibly be for such an inherently semi-chaotic event.

Seedcamp, however, is not about VC’s sage advice, as wise as it may be, or entertaining PR points from Mike and Paula Marttila, who was also super great at BarCamp. Seedcamp is about the startup projects and the teams running them.

Mentoring sessions underway, @finderly in front, @kumutu in the back

And in this area, this year was totally awesome. I was floored to hear that more than 100 teams had applied for the event! It used to be 30-40 in previous years. That fact alone shows just how strongly the startup community is evolving, primarily in Central and Eastern Europe where most of the applications and participating teams were from, but also Europe-wide and globally. In an amazing statement of commitment and dedication, the Janes brothers came to Ljubljana to present groupM8 all the way from Down Under in Australia. “Did you come to Ljubljana just for this event?” – I’m sure I wasn’t the only one to ask them. “Yes”. Wow. Needless to say I was really happy to see a strong set of Croatian startups amongst those presenting – won’t call out any favors though, at least not in this blog post…

So, commenting on the experience with several of the other mentors, I’d say we all definitely agreed on one thing: the quality of the presenting projects is rising visibly from year to year, and particularly this year as compared to 2010.

So many, many thanks again to all the organizers, including the core Seedcamp team and the gracious local hosts.

And big, big congratulations to all the teams who presented. We’re all holding our breath (hopefully not for too long!) to hear who the winners will be, but regardless of that everyone who made it into the final 20 was a winner!

P.S. If someone missed my previous post, here’s a captioned gallery of the goings-on.

Seedcamp Ljubljana in pictures – and a few captions

17. 07. 2011 § 3 Comments

Seedcamp Ljubljana was a blast and BarCamp on the next day was great too.

I was really intrusive during the sessions with my big and noisy camera while everyone else (o.k. – almost everyone except Marinshe!) was quietly photographing with their phones.

But anyway – for all of you who were there and for all of you who weren’t – a short pictorial history of Mini Seedcamp Ljubljana 2011!

http://www.zangzing.com/ivospigel/seedcamp-barcamp-ljubljana

(by the way I really like ZangZing – give it a try 🙂 🙂 )

 

Hello

06. 03. 2011 § Leave a comment

EuroGeeks is a book being written by Ivo Spigel – a book of interviews with leading European enterpreneurs, startup founders, VC’s and others from the European high-tech, startup community – including some who are not European but are part of that community.

Over time, I hope to extend the scope of this project beyond the book itself.

If you are interested in European startups and their stories – welcome and stay tuned.

 

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