HomeAustraliaTitanium Ventures, Interview With Managing Partner Mark Sherman

Titanium Ventures, Interview With Managing Partner Mark Sherman

In conjunction with the rebranding from Telstra Ventures to Titanium Ventures, Managing Partner Mark Sherman replied to our questions about the firm and their activity.

Mark Sherman
Titanium Ventures Managing Partner Mark Sherman

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

I have been interested in how software is transforming the world since I moved to Silicon Valley in 1992. First as a banker at Robertson Stephens where I took BEA, Intuit, JD Edwards, Quest Software, Siebel, and many others public. Then as a GP at Battery Ventures where I invested in Coupa, Mformation, Neoteris, Tejas and many others.  Now as a Founder and Managing Partner at Telstra Ventures, where I have been fortunate to invest in Airspace Technologies, BigCommerce, Box, Cohere Technologies, Cumulus, DocuSign, Elemental, Enable, Matrixx, NS1, Nexmo, Ooyala, OpenGov, OvationCXM, Singular, Snap Inc, Springboard, Telesign, Trifacta, Uhana and Zimperium. Previously, I received my MBA from the Harvard Business School and BS in Economics from The Wharton School at the University of Pennsylvania.  I have been fortunate to work with our portfolio management teams, partners at Titanium Ventures and limited partners. 

VCWire: Can you introduce your firm? 

Titanium Ventures is a data science, revenue-driven venture capital firm that differentiates using data science for our investment process and by generating revenue for our portfolio with Operating Partners and Channel Partners as a value-add. 

We target: (i) high quality people; (i) AI / ML / data, cybersecurity, cloud, SaaS, communications, consumer / sports / esports, fintech, logistics, and other emerging sectors; (iii) USA, Australia and other key geographies; (iv) companies with $1M to $10M in revenue, and (v) invest in ~10-12 new companies each year, typically Series As and Bs and occasionally Cs. 

I’m proud of how we’re punching above our weight.  We have about $1BN funds under management and have returned $678M cash to investors.

Our differentiation comes from:

(i) Sourcing: thematic investors complemented with data science

(ii) Revenue Acceleration value-add: we have generated $580M+ in revenues for our portfolio by selling direct as well as through channel partners, and 

(iii) our quality investment process: in 13 years, we have generated 12 IPOs (BigCommerce, Box, Cloopen, Crowdstrike, DocuSign, GitLab, Gorilla, Near, Skillz, Snap, Whispir and UBtech), 15 strategic M&As (Auth0, Corvus, Elastica, Elemental, Kony, Nexmo, Nginx, NS1, Ooyala, OpenGov, Rancher, TeleSign, Trifacta, VeloCloud, and Zimperium), and a total of 17 Unicorns.

VCWire: Which is your overall strategy (geo/amount/sectors)?

We are focused on transformative sectors of AI / Digital / Software with strong leadership teams. We are primarily focused on the USA (80%) but also invest in other geographies (eg Australia, Canada, India, Israel), particularly when we are knowledgeable about a subsector.  We typically invest in Series As and Bs and occasionally Cs.  We avoid pre-revenue rounds as well as later stage growth investing.  We are typically investing $5m to $15m into the company with more over the life of the investment. 

VCWire: Beyond capital, how do you support startups?  

We have a team of five that focus on our Revenue Acceleration value-add. The team helps drive our portfolios’ awareness, open new markets and channel relationships and drive pipeline for them.  We believe that we were the first group to focus on this value-add exclusively.  We have generated $580M+ in revenues globally for our portfolio by helping them sell direct as well as through channel partners, such as Deloitte, Infosys, NTT, Telstra, Wipro and others. 

VCWire: What can you tell us about your LP base? Are they helpful? How? 

We have over 50 LPs with a mix of corporate investors, institutional investors, family offices and high net worth individuals, typically software leaders.  Our LPs have been helpful in many ways – providing channel reselling relationships to our portfolio companies, providing co-investment capital for investments, hiring introductions and due diligence where they may have sector expertise.  

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 first glance?  

We love when we see two things: customer-founder-product fit – someone who genuinely understands and wants to solve a customer problem AND passion / drive / grit – building transformative companies is challenging and it will take a great deal of drive to listen to but not accept many NOs before they get to YES. Like Titanium, they are strong relative to their weight. 

We tend to avoid founders who have pedigreed backgrounds and are chasing opportunity or mere financial goals v. a stronger sense of purpose and drive. 

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

At a high level, the firm has invested in 99 portfolio companies during which there have been 12 IPOs, 17 unicorns, 42 liquidity events which have returned US$678M cash to investors.

This is like the Sophie’s choice question, which portfolio company do we like the best:

–       Auth0 – it has transformed the identity landscape and driven a top return for us and other investors.

–       Box – it has transformed the cloud-based content management, collaboration, and file sharing tool landscape, driven a top return for us and other investors, and we have generated millions of dollars for them through our Revenue Acceleration.

–       Crowdstrike – it has transformed the cyber landscape, driven a top return for us and other investors and we have generated millions of dollars of revenue for them through our Revenue Acceleration. 

–       DocuSign – it has transformed the e-signature landscape, driven a top return for us and other investors and we have generated millions of dollars for them through our Revenue Acceleration.

–       GitLab – it has transformed the DevOps software building landscape, driven a top return for us and other investors and we have generated millions of dollars for them through our Revenue Acceleration.

–       With many other emerging companies to come: Sleeper and Swish in sports, Cranium, Cequence, Safe in cyber, BuildOps and Enable in SaaS, OpenSolar and Pexapark in climate software, and LambdaTest and Tabnine in AI infrastructure.

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

Our pipeline now is filled with exciting companies, perhaps it is the best time in my career in VC of 24 years!  The sectors that spring to mind are:

–       AI is transforming all sectors of software infrastructure, data, cyber and applications. It is no surprise that 25% of all VC dollars are AI related.

–       Climatetech is one of the largest societal problems that we are dealing with and there are many software related companies that seek to contribute to climate change solutions. 

–       Cyber continues to be a problem that creates new opportunities constantly.

–       Vertical SaaS continues to solve problems for various vertical markets particularly when they have AI, data and payment twists.

We are also betting more than 2 cents ;)

VCWire

24/06/2024