In this month’s VC Under The Spotlight blog series, we spoke with Alston Zecha, a Director at Eight Roads – a global venture firm managing $4bn of capital across offices in the UK, India, China, Japan and the US.
Alston, who will be taking part in Startupbootcamp’s Tea With A VC event, tells us about Eight Roads investment focus and what founders should look for when seeking investment…
Tell us about yourself. Where are you from and how did you get this role?
I’m from a family of entrepreneurs and first tried to launch a tech start-up in university, but we never got past seed funding. After a decade in “safe” jobs (banking, consulting, private equity), I took the plunge again and co-founded payleven, a mobile payments company based in Berlin. I wanted to spend more time with family in London, I had previously worked with some of the Eight Roads team, and they were looking for someone with FinTech and Enterprise Software experience, so I joined the company in 2015.
Tell us about the fund, how did it get started?
Eight Roads is the latest incarnation of venture funds backed by Fidelity a leading global asset manager. Our venture teams have a nearly 50-year history of supporting innovation leaders in the technology space, with early successes including MCI and Atari. The common misconception about us is that we’re a corporate VC, but our change of name in 2015 signified our independence and desire to build a standalone brand.
What makes Eight Roads different from other VC firms?
Eight Roads is a global VC managing $4bn of capital across offices in the UK, India, China, Japan and the US. Our size and reach, combined with feet on the ground in many regions, has proven helpful as our portfolio companies scale-up and out.
Though we are not a corporate VC, all our funding comes from Fidelity International, a leading global asset manager who has been investing in venture capital since the 1960s. We, therefore, have “patient capital”: should it make sense for the company, founders and other stakeholders we can hold investments far longer than a typical VC, for example, we have held shares in Alibaba for 18 years and counting.
Some funds make a lot of investments and then “double down” on their winners, whereas we focus on quality, not quantity. All our portfolio companies have access to our team of value-adding partners who have a strong start-up and large company experience in enterprise sales, online marketing, technology architecture, talent acquisition and PR. Our investment team has sector expertise in areas such as FinTech, SaaS, and online marketplaces.
How many companies have you invested in so far and how much do you typically invest?
Globally, we have over 120 companies currently in our portfolio, of which 25 in Europe and Israel. We normally invest in Series A and B rounds, with cheques of £5-15M.
In terms of your current portfolio, what industries do they represent? Do you have a particular industry focus and specialism?
We invest in B2B and B2C technology companies, with notable recent Europe and Israel investments including AppsFlyer, Compte Nickel, Curam, Decibel Insight, Innogames, Made.com, Not On The High Street and Treatwell.
One of my focus sectors is FinTech, and one of the reasons I joined Eight Roads was for our expertise in this sector and for our connection with Fidelity. All our European senior investment professionals have FinTech investing and/or operating experience going back a decade or more. Our relevant global investments include Alibaba, Axoni, China PnR, Compte Nickel, Flywire, FutureAdvisor, iPipeline, Kensho, Prosper Lending, River Security, Snapsheet, Xoom.
What are the top three things you look at when considering a new investment?
First, we look for great teams with global ambitions who have the strong values, passion, strategic focus and attention to detail to underpin their vision.
Second, as we are data-driven investors, we look for companies with clear product-market fit which are now ready to “take things to the next level” by scaling up and out with our capital.
And lastly, as Eight Roads’ investment can be the start of a long-term partnership, we prefer situations where our global platform, network of industry execs and sector expertise can add value beyond just our deep pockets
In terms of any golden rules that you have, are there certain hurdles a founder has to pass when you’re evaluating potential founders or companies to invest in?
The founder has to have to have a clear product-market fit achieved, with strong revenue/customer traction and growth for the company.
From a founder perspective, what advice would you give to a founder fundraising for the first time?
Choose the best investor for your company, not the highest valuation or the most glamorous name. This means finding an investor who is aligned with your vision and values, who understands your business model and who will add value.
As the founder, know your financing strategy not just for the current round, but for the following round(s) too. And know all the investor FAQs by heart and have crisp answers to them especially your strategy and numbers.
Think you can impress Alston with your startup? We’re looking for 10 amazing startups raising between €5m to €15m for an exclusive 1:1 feedback meetings. Apply by 18th July for your chance to secure a spot!