HomeInterviewsAndrena Ventures, Interview With Gideon Valkin

Andrena Ventures, Interview With Gideon Valkin

Gideon Valkin (Andrena Ventures)

Some weeks ago, Gideon Valkin, the former Monzo and ClearScore commercial leader, investor and entrepreneur, launched Andrena Ventures, a $12m solo GP fund. In conjunction with the launch, Valkin replied to our questions about himself, the new firm and fund, its overall strategy, and more.

VCWire: Hi Gideon, can you please tell us a bit more about you? What’s your background? 

All four of my grandparents were Jewish refugees from Eastern Europe who fled to South Africa to escape persecution. Both my grandfathers were self-made retail entrepreneurs, as is my father. I grew up in South Africa and have had lifelong passions for tennis, finance and social impact. I was a junior national tennis champion, which led me to the US where I played intercollegiate tennis and studied Government & Economics at Harvard. I spent much of my studies focused on economic development and financial inclusion, with particular focus on microfinance and models for offering finance to excluded segments of the population. 

After starting my career in investment banking at Credit Suisse and Citigroup, I returned to my passion as an entrepreneur and operator. I co-founded FriendlyScore where we built data infrastructure to help lenders make better credit decisions for more people. I then joined the early ClearScore team for three years of hypergrowth where we helped 10s of millions of consumers understand and access credit. This was before I went to serve as the Commercial Director for Monzo where I am proud to have been part of a team that changed the game for consumer banking in the UK.

I began angel investing towards the end of my time at Monzo and was fortunate to get my break in VC from Avi Eyal at Entrée Capital, who I’d gotten to know for almost a decade until I joined the firm. During my time at Entrée I helped build their London office and loved my time working with them. 

VCWire: Can you introduce Andrena Ventures? 

Andrena Ventures is based on a series of key insights I had while I was at Entrée:

  • Many of the highest quality founding teams in Europe are emerging out of the key alumni networks of successfully scaled fintech companies.
  • This is an ecosystem in which I am an insider and have a deep operator network.
  • Some of these teams are starting fintech companies, but many are building across some of today’s most topical problem areas, from climate to AI, vertical software and more. 
  • The seed market in Europe has become crowded. These founders do not need another institution looking for 10-20% ownership stakes. Instead, they need professional angels who have (i) relevant operational experience, (ii) time to help them (iii) low ownership thresholds that aren’t constrictive (iv) do not pose a signaling risk to future rounds.
  • The US has already seen the rise of this new class of investor. While I am not the first, I wanted to be part of an incredible group of peers that are bringing it to life in Europe.

I am building Andrena to bring an important offering to founders, to take advantage of a macro tailwind, and to create my dream job of being a founder and investor at the same time.

VCWire: Which is your overall strategy?

Andrena is investing $100k-$400k tickets at pre-seed and seed into teams coming from the UK and European ecosystem. The fund is focused on backing the most talented fintech alumni, but agnostic to which sector they are building in next – more than half of these alumni teams to date are not building in fintech. AI, climate, B2B software and fintech are the most common sectors. 

VCWire: Beyond capital, how do you support startups?  

I’m deeply involved with the teams I back and am typically a close, trusted and high-impact partner in the first 12-24 months of the journey, at least until a bigger fund comes in and forms a board. My impact is driven by (i) my experience as a founder and operator and (ii) my deep operator network and strong connectivity in the VC ecosystem. More specifically:

  1. Commercial leadership – I’ve been the commercial leader in three startups. I feel confident stepping into this functional domain to support portfolio companies on things like pricing, go-to-market, monetisation, partnerships and sales, delaying the need for an expensive hire.
  2. Domain expertise – Companies building in fintech benefit from my deep domain expertise most notably in banking, payments, lending, credit scoring, credit cards, personal loans, mortgages, rewards & loyalty, fx & cross border. I have lived and breathed this domain and know what does and doesn’t work.
  3. Founder-to-founder guidance – Regardless of sector or domain, there are universal challenges in the 0 to 1 phase: winning your first customer(s), hiring your first executive, raising your first institutional round, negotiating your first channel partnership etc. Only a fellow founder understands how varied, unpredictable and taxing these cold-start challenges can be. When Packfleet launched, the founders were packing boxes into vans themselves. So, I went to help them do that.
  4. Recruiting – I have leveraged my deep operator network to recruit at least seven executives into portfolio companies in the past, and will continue to do this for the Andrena portfolio. 
  5. Fundraising – I get involved in every funding round for all of my portfolio companies by introducing new investors, supporting them through the process and helping founders navigate the complexities and construct the round. I have a particularly strong network in the VC community, which means my founders get access to the best funds, many of whom are my LPs. 

VCWire: What do you like to see in founders?….And what don’t you like to see in them? I mean, is there something which impresses you at a first glance?   

Here are the foundational things I look for from the founding teams that I back:

  • Top performers at their previous company
  • A history of working together successfully
  • Diverse skill sets including strong technical skills
  • They’ve learned from the best founders in their previous company by being in the room with them i.e early enough or senior enough for this to be true
  • They were part of strong cultures and have a clear sense of what to replicate and what to change
  • They’re bold and know what it means to redefine an industry 
  • They have access to great talent via the networks of people they’ve worked with
  • Extremely hard-working and understand the unconditional sacrifices of high growth 
  • Uniquely positioned to solve the new problem – the best possible team for the job

I am more a people picker than a market picker. I believe that by the time markets look appealing to invest into, it’s often too late to have backed the winner at the earliest stage. So instead, I look for exceptional people who see something that others don’t, in spaces others might not be paying attention to.

VCWire: Please, tell us a bit more about the portfolio. You can list five startups whose paths have made you particularly proud of.  

1. Yonder – I worked with all three co-founders in the early days of ClearScore. I then helped them start the ideation of Yonder, before they left their jobs and was the very first person on the cap table. Since then, the trio has built a category defining product and attracted the best investors and talent in the market across three subsequent funding rounds. Tim executes at a level and pace that I’m not sure we have seen before in fintech. I believe they will build the world’s next-generation American Express.

2. Packfleet – I backed Tristan when he had delivered 200 parcels by himself in his own car and before he recruited his co-founders. Now the team has 100+ vans on the road delivering parcels for over 300 merchants. This is a team with real marketing, design and engineering genius who’s boldness has placed them well on their way to dominating the parcel courier market and taking on the likes of FedEx and DHL.

3. Moment – At Entrée, we incubated this company with some amazing partners to solve the ultimate pain point for enterprises of managing cross-border payments within Africa. The company is run by Joel Yarbrough (ex-Rapyd, Grab and Paypal) and Rael Sarembock (ex-JPMorgan, Wonga and serial founder) and is already processing a significant portion of payments for one of the largest multinationals in the region.

4. two companies I’ve backed most recently and still at their earliest stages are Gradient Labs AI and Nustom 

VCWire: Which sector/s would you bet 2 cents on in the next five years?  

One space I’m particularly interested in is the fintech & AI overlap particularly in two key areas: (i) b2b software enablement and (ii) b2c customer layer data and product aggregation. My portfolio company Gradient Labs AI is a great example of the first category. It is creating efficiency in customer support functions of fintech companies that is going to fundamentally change the cost profile of the industry. I think similar kinds of businesses will be built in fraud, KYC, underwriting, data warehousing and so on.

But overall, my views on markets are loosely held. Especially at this nascent stage of the AI platform shift, my level of certainty is low about which sectors we will see the most value created in the next ten years. The thing that I am certain of is that the talent that was responsible for changing the game in fintech over the last 10 years will be disproportionately responsible for making it happen across sectors in the next 10.

VCWire

20/05/2024