HomeGermanyInterview With Patric Hellermann, Co-Founder and GP at Foundamental

Interview With Patric Hellermann, Co-Founder and GP at Foundamental

Patric Hellermann, co-founder and GP at Foundamental
Patric Hellermann, co-founder and GP at Foundamental

Patric Hellermann, co-founder and GP at Foundamental, a Berlin, Germany-based tech investment firm partnering with exceptional founders re-creating the real world globally, participated in our Q&A, replying to our questions about himself, the firm and their over strategies, told us a bit more about their LPs, introduced some portfolio companies, and shared with us his thoughts about the tech and vc world.

VCWire: Can you please tell us a bit more about you? What’s your background?

I’m from Essen, the industrial heart of Germany, and grew up with entrepreneurial parents who taught me about hard work, perseverance and how to build relationships with anyone. I studied energy management and finance, before working in corporate finance and M&A and later for EON, before founding Foundamental.  

VCWire: Can you introduce Foundamental?

Foundamental is a venture capital firm focused on investing in technology companies that address real-world problems, particularly in sectors like 3D design, construction, blue-collar workforce robotics, supply chains, logistics, and renovation. While we do not invest in property-tech, as it follows very different optimization levers and more static environments than the project-based verticals we dedicate to. Founded in January 2019, our investment approach is unique: emphasizing the discovery of “vertical singularities”—innovative opportunities that are often overlooked by conventional investors.

We don’t follow herd-heuristics and instead focus on sectors which have been traditionally ignored by generalist investors, like construction. 

Our aim is to be the earliest dedicated partner to our founders, investing in early-stage rounds (pre-seed, seed, and Series A) with checks ranging from $500K to $5M. We prioritize building conviction in our investments, often leading funding rounds and reserving more than 50% of funds for follow-on investments. This strategy has allowed us to support founders in 22+ countries, serving over 75 geographies globally.

Our conviction is that the next legendary firms will emerge from real-world sectors that require detailed and specialized knowledge, rather than following the patterns and successes of consumer or IT-focused ventures. We’re committed to finding and nurturing these opportunities, believing that the best investments come from understanding and supporting the unique challenges and opportunities within specific verticals.

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

Sectors: Vertical B2B specialist in the real world: Construction, 3D design, blue-collar workforce and robotics, supply chains and logistics. We’re not a prop tech fund and we don’t seek out these investments. 

Geography: Global – we have GPs in Europe, US and India so we can cover major continents and countries. 

Amount: 500k – 5M first cheque, leading pre-seed, seed and occasionally A rounds. 

50% follow on reserves from each fund

VCWire: Beyond capital, how do you support startups?

1. Focus on Vertical Singularities with Sector-Specific Expertise and Deep Empathy

We specialize in identifying and investing in ‘vertical singularities’ — unique, groundbreaking opportunities within specific real-world sectors like 3D design, construction, blue-collar workforce robotics, supply chains, and logistics. These opportunities are often overlooked by conventional investors because they require deep, nuanced understanding and are not immediately obvious. 

We also place a high value on empathy for the specific trades and professions within our target sectors. We understand the nuances of industries such as construction, manufacturing, and logistics, which are often missed by generic investors who lack personal experience in these fields. This deep empathy allows us to provide more tailored and effective support to the startups they back.

2. Substantial Follow-On Support:

We primarily lead rounds and have unusually large reserves for follow-on investments compared to industry norms. Over 50% of our funds are allocated to supporting our portfolio through multiple stages of growth. This ensures we can continue to back startups with significant capital as they scale, pre-empting large follow-on rounds and providing sustained long-term support.

3. Deep Commitment, Rapid Responsiveness, and Proactive Engagement:

We’re dedicated to being a highly responsive and engaged partner. We prioritize immediate and honest communication – for instance, we have a commitment to reply to founder inquiries within 60 minutes. 

We’re also very aware that startups make important decisions daily, so we’re on hand to offer support outside of regular board cycles, providing ongoing, hands-on assistance and strategic advice to help our portfolio navigate the critical early stages where every decision matters.

4. Global Perspective and Local Integration:

We operate with a global reach, with investment teams spread across North America, Asia-Pacific, and Europe, each led by a General Partner native to the region. This structure allows us to embed deeply in local markets while benefiting from cross-border knowledge transfer. Our unified investment committee facilitates quick, informed decision-making.

5. Truth, Transparency, Trust, and Embracing Discomfort:

We value truth, transparency, and trust in our relationships with founders. We know that building startups is challenging so we embrace discomfort and aren’t afraid to confront difficult truths. This helps our founders make informed decisions and navigate their growth with confidence.

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

1. Pursue and Commit to Vertical Singularities: Founders identifying unique, groundbreaking opportunities in real-world sectors.

2. The Onion Founder: Founders with nuanced understanding and expertise in their specific industry. Every conversation reveals deeper and deeper nuanced insight that is ungoogleable.

3. Embrace Transparency and Trust: Mature-minded founders who value honest communication and partnership.

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

Our LPs include families and networks that have businesses across the construction supply chains internationally, from upstream forestry to downstream contractors and even specialist software. They are incredibly helpful when it comes to understanding nuances and discovering singularities.

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

Check out:

Infra.Market – Asia’s fastest-growing construction solution company, a one-stop solution for all construction material requirements 

Snaptrude – a modern operating system for architects and designers to transform how buildings are designed and built 

Tazapay – the leading cross-border payment gateway – important in the construction industry to be able to transact across multiple borders

Enter – home energy assessment startup based in Germany, which is transforming homes and buildings to make them more energy-efficient

SafeAI – accelerating the transition to autonomous construction and mining to enable safer, more productive worksites 

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

We are already betting our careers and money on sectors: AECS, that means from construction over 3D and design to supply chains, the sectors that power the projects to build the real world.

Within our sectors, there are a few spaces we plan to allocate capital more strongly into than others.

One of them is robotics replacing blue-collar workforce. A lot of this in our project-based sectors will actually be used on-site rather than off-site in manufacturing type environments. While we will make allocations into both on- and off-site robotics, on-site robotics is a contrarian take we follow.

The other one is data infrastructure for construction and computer-aided design. We have come to the conviction that for AI to bloom in its full end-to-end workflow beauty in the B2B sectors we cover, data connectivity and data preparation behind the B2B firewalls will have to happen first, and will be fueled by the wish to adopt AI more end to end.

VCWire

01/07/2024