Kima Ventures is almost certainly the most active angel investor in the world: it wants to invest in 100 startups each year, every year. Forever. And they’ll invest in any country in the world.Kima is run by two entrepreneurs. The first is Xavier Niel, French billionaire telecoms entrepreneur who runs Iliad, France’s biggest independent ISP, and owns Le Monde, its daily paper of record. The other is Jeremie Berrebi, serial French-Israeli entrepreneur. They started Kima Ventures in 2010 with the goal on investing in 50 companies per year, and then decided to kick it up a notch and invest in 100 per year.
That’s totally crazy, so we thought we’d check in and ask Kima Ventures Partner Jeremie Berrebi how it’s going.
(Disclosure: The author co-founded a company funded by Kima Ventures.)
Here’s the Q&A:
BI: So, tell us a bit about Kima Ventures?
Berrebi: We’re a seed stage fund started by two angels and entrepreneurs. We put in our own money. We invest worldwide. Our goal is to have a worldwide network of startups in as many sectors as possible who can communicate and help each other out.
We invest roughly 100,000 euros per round, as soon as possible — we’ll even invest on a PowerPoint — and everywhere. We have startups in China, Norway, Canada, you name it.
BI: How many companies have you invested in so far, and where? How many companies do you plan on investing in?
Berrebi: We’ve done 80 investments so far, in 11 countries. They’re roughly 35% in France, 35% in the US, 10% in Israel, with the rest everywhere else.
We want to invest in 100 companies a year. But it’s slowed down lately: deals have become more complex because the valuations are too high. We have to take the time to negotiate. We see these Silicon Valley companies asking for a 5 million valuation for a company with no product, and so we have to explain to them that that’s not reasonable. We often see these types of companies spending tons of time, 6 to 8 months, raising at that kind of valuation, which is terrible for their business.
So right now we’re averaging more like 1 investment a week.
BI: What do you look for in an investment?
Berrebi: First of all, we want a product that answers a real need. We sometimes see entrepreneurs with really cool products, but no clear need, and that’s no good.
Of course you have to have a great team.
And you need a big market. By big market we mean we want the company to be able to reach 50 million in sales–if that’s 10 years from now that’s fine with us, but we want it to have that potential. That’s actually too small for VCs in some cases, but it’s still bigger than many companies shoot for.
And of course the company and product have to be innovative in some way.
BI: What sets you apart from other funds? Why should people go with you?
Berrebi: First of all, we close investments in two weeks. By two weeks, I mean: from the first contact to money in the bank. We make decisions in 48 hours. We steal many deals from VCs that way. Anyone can submit an investment proposal to our website and unlike most VCs I personally look at it.
We’re definitely the only fund in Europe who can invest that fast. In the US you have Dave McClure and maybe George Zachary. Really the only investor with a strategy similar to ours is McClure.
But we do have a difference with McClure, which is that we’re alone. We don’t have a staff. So when you’re a Kima company, you’re always in direct contact with either Xavier or myself. So that lets us be very responsive.
To American entrepreneurs we offer a gateway to Europe and to the world outside America. The world outside the US is extremely important, and it’s only going to get moreso, and we open those doors to them.
We also have the concept of the “Kima family”. All our startups are really one big network. European entrepreneurs who go to Silicon Valley can find desks at our portfolio companies and vice versa, they help each other out with intros, etc.
And finally, one thing that sets us apart from most investors is that we have a focus on helping companies reach break-even as soon as possible. You know the saying: it’s easiest to raise money when you don’t need it. Take a look at what’s going on with Japan: you never know when a crisis can hit. Right now the good times are rolling, but VCs can stop investing overnight like Sequoia did in ’08. As entrepreneurs, we’ve been through the dotcom crash and the financial crisis, so we ask our companies and help them to get to break-even as fast as possible. It’s better to not be growing and be sustainable than to grow real fast and then have to shut down.
BI: How many of your portfolio entrepreneurs have you actually met?
Berrebi: Ha! Well, I’ve met most of them by now, because we have Kima dinners where we invite our portfolio entrepreneurs. There are a few in the US I haven’t met yet. But we’re very hands on so we’re always skyping and IMing.
BI: What sectors are you interested in that other people don’t pay enough attention to?
Berrebi: One area where we’re very contrarian is downloadable software. Everyone is all about the cloud and it’s great, but still today software on the client is richer and faster, and much more productive. Look at something like Evernote or our portfolio company Sparrow. You couldn’t be as productive with these apps if they were just in the browser. The Mac App Store will also definitely help here, as will other similar platforms that are sure to come up.
We’re also excited about are e-commerce tools. One thing we’re seeing is that e-tailer have real technological needs and have the money to buy products that solve those needs. Anything that helps them convert better or be more efficient in some way is going to do well. This is a real, big market that people underestimate.
Also, ad technology and ad formats. Let’s face it, the ad banner is dying. I mean, it’s still a huge market, but advertisers are realising that people don’t click anymore and tune them out. Even Facebook hasn’t really cracked the code on display advertising. So solutions that help advertisers get their message across in an innovative way without bugging the user too much interests us. It’s a very risky business, because agencies always take very long to adapt and experiment with new things. But there’s tons of potential.
Another thing we’re looking at right now are virtual universes and things around 3D.
But again, we’re open to investing in any sector as long as it’s internet-related.