'Defence is where we can play all our superpowers': Visionaries Club’s Rob Lacher

0:03Hello and welcome to Startup Europe, the podcast from Sifted where we interview the biggest and brightest names in Europe's startup ecosystem. I'm Amy, Sifted's editor, and today I'm joined by Rob Lacker, founding partner at Visionaries Club, the early stage European VC firm focused on backing companies disrupting industries. Visionaries' portfolio includes the very buzzy Swedish AI agent maker Lovable, which you've heard us talk about on the podcast previously, and supply chain startup Tacto, German HR platform Personio, and French SaaS giant Pigment. Before Visionaries, Rob was a founding partner at another early stage B2B focused VC, La Familia, which he left in 2019 to start Visionaries with Sebastian Pollock.

0:46Visionaries has since raised two generations of funds, most recently an 150 million euro seed fund, a 200 million euro early growth fund to invest in companies post Series B, and the 50 million euro tomorrow fund, which is focused on deep tech investments. Rob has also been a founder. Back Back in 2014, he set up shopping platform Amaze, which he sold to German e-commerce groups, Alando, two years later. Today, we're going to get into what's hot in B2B, the recent boom in AI agents and the founder to Investor Pipeline. Welcome to the pod, Rob. Thank you so much for having me, Amy. And thank you for joining us in our very fancy recording studio.

1:24What brings you to London? You're usually in Germany, aren't you? Yeah, so actually we have half of our people are based in London. So we have an office here for a few years already. and I think it's a particularly exciting week because it's London Tech Week and I'm incredibly looking forward to this because everything from Founders Forum, London Tech Week, a lot of great people coming together. So I think there's a lot of energy and momentum in London this week, so I can't wait to dive into it. Awesome. So let's start talking with one of Europe's companies du jour, Lovable. The Swedish AI startup has been making headlines for being the fastest growing software startup ever.

1:59it made 50 million dollars in annual recurring revenue in the last six months which is pretty impressive how did you meet the team so first time actually um we met the team was when my colleagues vk and bobby were organizing a dinner in stockholm which was a bit more than a year ago and anton the the founder of lavable was part of it he was back then still building you know starting his company and i think it was called gpt co-pilot trying to iterate on software stacks to make it easier to democratize software engineering also for non-developers. And both of them were blown away by his first principle thinking, his product obsession, he was talking about building something, something very new.

2:40And yeah, so that was the first time we met him. And then the first time I actually met him was at a coffee place last year in Stockholm, right after Slash, when he was shortly before he was releasing Lovable and really building what he's building today. And I still recall when we were sitting there, I've not often met founders who were so radically independent thinking in a positive way, but also in every minute asking for feedback or things they think they could better do better on product, how they should build their team and everything. So yeah, we pretty much fell in love since that minute with him and then tried to do everything to do a seed round and to be part of that.

3:14And what did doing everything to get in the seed round involve? What wooing was entailed? Look, so everything meant, I mean, from our side, we always try to put the founder in the center if we're trying to say we do everything it's not trying to push ourselves first or push ourselves into a deal we try to surround him with ingredients that we felt are most giving him superpowers for lovable at this stage so we made a lot of interest to u.s angels and founders like like gill or others who have really a lot of experience on the u.s market because back then he thought that that was something important to build lovable into global company we introduced a lot of angels that are very product focused like andre the founder of miro who's in our portfolio kuhn the founder of framer who's you know building something between let's let's call it figmer and a website builder and a lot of other great angels because we thought at this very early stage now it is the best support we could bring to him and that was basically how we kicked off the process writing a lot on whatsapp meeting him many times and then yeah as you know it also went into a little larger seat round than we initially expected because the company was just doing so incredibly well.

4:19So we were in discussions with him shortly before he launched. And then the launch, I mean, of course, blew us all the way because they were growing so fast. So that's why the round became a little larger and happy that our friends from Creandum then took the lead. Yeah. So Creandum ended up leading the seed$16 million. And there were quite a few other investors as well, which suggests to me that you put in a fairly small check. What's your strategy when it comes to a deal like that, where it's quite buzzy? Is it kind of better to just be in no matter what the size? Or how do you think about that when it's a very hot deal?

4:53So to be honest, we not tried to be hyped. So Lovable was something, it got very hyped fast, but that was not because, that was not the reason why we jumped on it. So we were in touch long before with Anton and we have a very clear strategy with our seed fund that we think we're only a good partner if we really lead around and if we're not like being left and right and trying to be part of every party, but really trying to have very few investments a year, very high conviction investments, where we normally have around 12 to 15 % ownership. And that's what we do with, let's say, 90 % of our seed investments.

5:24So all the investments you see would normally be investments where we clearly commit to being the lead, but then also put pressure on us to deliver on that promise. With Lovable, it was a bit of a special situation because the company grew quite fast from what you would say pre-seed stage company to, it skipped series AB almost. If you look now at a, I mean, more than 60 million ARR company, you know when we looked at them it escalated basically quite fast to five million AR and that's why we said we invest from our early growth fund actually into this company and that's where we have a different strategy with the early growth fund we basically think the best setup for founders is if we don't compete with all the other large ones and force them to make a decision either sequoia or us or excel or us but basically getting one strong lead sometimes from the u.s and having all the hustle all the entrepreneurial network that we have with visionaries to take on top.

6:15So that's why in this case, we teamed up with Queandum, investing from our early growth fund. And that's why we also didn't take the lead in that round. The deal was just too large, too advanced. And they also already did a pre-seed round with Hummingbird. And fairly or unfairly, I've sometimes heard from other VCs say that Visionary sometimes gets into good deals because you have a good relationship with some of these later stage funds that you just mentioned, Sequoia. How important have relationships with other funds been to the success of visionaries because you're you're not really that old as a fund but i say you are one of the more established names that people you know talk about thank you for saying that and look we're working hard every day to build the best out of what we're doing and that that journey will never end i think you know again we've all been founders ourselves before and we try to think about visionaries really from this founder perspective like what is the best product that someone as a founder could have at the seed stage and at the early growth stage.

7:12And if we, you know, we often say in Europe that we don't think big enough and that we feel we're thinking too local and we're raising from local funds. So one aspect of building visionaries was, look, one of the ingredients that we consider to be very important for founders is that they have access to any global superpowers in terms of networks, funds, that they think building global category leaders and not just trying to stay local. And we've had great experiences with funds like Sequoia or Meritech. Alex Clayton is very active here in Europe. He led rounds in Pigment and some of the companies that you mentioned.

7:47So we are actually big proponents of taking on board actually a global fund at a certain stage because we think it really takes a founder's ambition to the next level and it gives more ingredients to the cap table than just raising from another fund in London or Berlin. And that's why we've built really close relationships with firms like Sequoia, Excel, Index, but many U.S. funds benchmark, which, for example, led the round in 11x. So that's why you see in a lot of our receipt portfolio, these brands lead or preempt the A round. So I think we put founders in the great position that if things go well, which isn't always the case, which is totally fine, you know, founders go to ups and downs.

8:25They normally never have to raise. So they get in touch with these partners very early and they don't have to do fundraising. They can do a few intimate coffee chats. They can build a relationship. And then in the case of TACTO, which you also mentioned, they were lucky to be in the position to have six or seven term sheets really from some of the best partners globally. And now they decided to go for Sequoia and then Index, which I think is a great setup for a Munich-based company that already has us as a local European fund. And so that was a long answer to your question. But when we had the idea to add to our seed strategy, the early growth strategy, we were in the lucky position that we had LPs that would have provided us with the money to build like a 600 million or 800 million growth fund and try to be bold and then lead rounds.

9:07But we spoke with a lot of our founders and we thought it's smarter to take it step by step and to say, hey, the best product is you have one of the US funds and us at this stage. We bring an unparalleled entrepreneur network that no other fund has on this planet and the other funds bring a lot of global capital. So right now we think it's the best product. But at a certain point, we might also change this and say, maybe why don't we just lead rounds and not have the others eat our lunch. So you mentioned your entrepreneurial network there a few times. Tell us a bit more about that. Like who are the investors in Visionaries?

9:40What is kind of different about that network that you've built around the fund? Yeah, that's a great question. So what makes us, I think, a little different from other venture capital funds is that we only took on board very successful entrepreneurs as our investors. So on the one inside, 25 Unicorn founders, like the founders of Adyen, Miro, UiPath, FlixBas, HelloFresh. So people have gone through the journey, you know, from Xero, PC to Series A, B, some of them Nasdaq, IPO. And we think this is the most authentic experience to give to our founders at the early stage to make these connections to those people that have built category defining companies before.

10:14and went through all the ups and downs. But that's only one part of our LP base. The other part are family entrepreneurs. So if you look at Europe, one of our biggest strengths is, and we sometimes forget about this when we talk as a little small against the US, China, 95 % of our economy are industrial world market leaders that have been built in the last 100, sometimes 200 years. And these companies, you know, no matter how much AI you have, they are still building the physical products of this world. Many of them are world market leaders, whether it's companies like Miele, Swarovski, car companies, which let's see how long they still remain world market leaders.

10:47So they're getting quite disrupted. But long story short, we took 25 of these family entrepreneurs as investors as well, like Markus Swarovski in the consumer space or Sunil Mittal, who's founded BARTY, which is the largest telco in India. These people give us an incredible access into the industrial economy when we look into new AI technologies that we want to deploy, when we look into helping seed founders with product market fit. So I think bringing this industrial network of European market leaders on the one hand side, together with the digital entrepreneurs that really invent the future, is what we think we need in Europe to unlock our full power.

11:21And the one last thing I'd say is why family entrepreneurs. I personally don't believe in the leadership of public companies a lot, because I've worked with them in the past, you know, when I was shortly at BCG. These are people that are hired into companies as CEOs that are on average six years in office, and they don't have an incentive to take massive risks. You see it in our car industry how they really, sorry for the good English, fucked up, like really big time and not being bold to invest into electronic vehicles and all these kind of things because they were protecting Abbott and doing another round of restructure to be even more profitable.

11:53Family entrepreneurs managing legacies over generations, they can be bold to take risks. Most of them are still pretty cash flow positive and have a lot that they could invest. So we figured out this cocktail is a little better. What's a good example of where bringing together some of the founders in your portfolio with some of those kind of old school entrepreneurs, where that works? What was a good example of that? There are 1 ,000, so if you have the whole week, we can dive into them. Maybe I just start with a few deals we recently did. So we invested into two defense companies, so we're not making these deals public for certain reasons.

12:30But to give you an example, it was one company that is already quite advanced. So they are doing 100 million revenue, have built a really leading technology in defense, and they want to enter more European markets and also more U.S. markets. They're already active here, but not to a scale like some of the local players. And if you look at defense procurement, it's very complex because you don't just sell one drone or one system. You have to integrate with, you know, the whole system stack that if you have, for example, the Royal Navy or you have the German army, they would say, look, we're maybe needing an ISR solution.

13:03for the nature eastern flank and that consists of maybe a combination of drone systems tank systems missile systems so when you're going to these rfqs you need to integrate with the other defense players so within only two weeks we were able to connect the founders of this company to dasol which is a french family business a market leader in french defense to knds which is a german market leader developing the leopard 2 tanks and these vehicles which is also partly family owned to deal which is a family business so they've developed the irist system so we were able actually to connect this entrepreneur within two weeks to four of the most important defense players that go into these rfqs so we gave them i think a three-year shortcut because if they had to do this hustle themselves to build a relationship with these industrial old defense company lersen is another example they're also an opino fund so that one of the lps that are public they're market leader in Germany for marine ships.

14:01So that's one example connecting the what we say old economy or industrial economy with the future of tech where we felt it was really impactful for the founders and no VC firm could normally do this because they wouldn't have these industrials SLPs. Another example is just a founder last week from ETH Zurich, hyperintelligent, wants to build a new microprocessor using interaction nets. Very complex for us to understand but also how do you support this guy coming out of university that has been referenced as the smartest computer science student of his class. We introduced him to Jonathan, who is the founder of Grog.

14:32So I've been a seed investor in Grog, which is right now the fastest inference platform for AI inference. And I introduced him to Herman Hauser, who is the founder of ARM. He's a legend here in the UK. I think these two people are ingredients for this person who are among the best in the chip industry to really work not only on getting feedback on his technology stacks, but how should he approach this? How should he approach hiring, hardware engineering its complex to build a chip company. So long story short, we want to back the top 1 % founders and we think these 1 % founders deserve top 1 % advice.

15:05This is something we couldn't give as a generic VC partner, but this is what we can enable by introducing them to these top 1 % founders that back visionaries. And that's our philosophy, but that's what we're trying to take to the next level every day. And you mentioned defense there. Which are some areas that you're especially interested in investing in at the moment or you're seeing lots of interesting companies kind of come up doing? Yeah so we've looked into it actually for quite a long time so Torsten founder of Helsing is a good friend he was always my favorite angel before he became a full-time founder again and it's phenomenal of course the momentum that he's put behind this so we've invested in quite a few companies but on our side and look there's no right or wrong but But the way we approach this with our founders is that most of the companies we backed are quite active already and quite effective within the battlefield.

15:55So they are not that interested in a lot of LinkedIn noise or in a lot of, let's say, public marketing. So that's why so far we've agreed with them that we neither make our investment public nor do they have an interest to speak to certain media. because we have deep respect for defense. It's something different than a lovable, than a software company because defense means really, you know, battlefield. It means there are lives at stake. It means something of kind of something very critical for Europe to get right. And I think a lot of this happens sometimes better in stealth than if things are too public.

16:37So if you look at a lot of the developments in the technology stacks, they're of course trying to keep confidential because you don't want it to be on the other side so we're trying to find a good balance to be honest also because we see on the one-hand side it's the most busy industry and people love posting on linkedin about another great round and another great r step people love showing off you know with their investments and love sharing stuff at dinners defense i think vcs need to be careful including ourself how to approach it because right now there is a lot of momentum in europe because the public media is suddenly super excited about it.

17:10The people that were climate VCs three years ago are now defense VCs. But I think VCs need to find a way to deal with it. Let me put it in a different way. The more impactful a technology really is in the battlefield, the less the companies would be interested in making that public. Having said that, I don't want to put like a bad word for people who are public in defense because I think it's great that this topic is now becoming a core of the public discussion that we get our society behind this shift from, you know, being in peace for 50 years to, hey, why are we building a big army again, especially in countries like Germany, where we, because of our incredible, terrible past, you know, it has been a very far way to build a military again.

17:53So that's why I think companies like Helsing and others, I have great respect that they are putting a bit more public momentum and really educating the society about this. What are the key things that the defense companies you're working with need? Is a big goal for all of them procurement by governments? What are some of the other kind of like key challenges for them? I'm imagining raising money is maybe not so hard for them. It is a buzzy area. But what are the things that those companies really need to become big successes? It's a great question because for me personally, it's the most complex and that's also from the support perspective, the most interesting space I've ever been in as a VC.

18:32Because what I mentioned 10 minutes ago, you know, supporting a software founder with hiring or connecting them to, I don't know, a Jonathan who has built Grok because someone wants to build an AI chip and think about how to manufacture it or making an introduction to a head of sales or something is the one thing. And defense is the most complex thing I've ever seen because it's an intersection of software and hardware right now, which is kind of something new. The space entirely got disrupted. If you look at the modern battlefield in Ukraine, which is right now the kind of core battlefield that we have here, unfortunately, in Europe, 70 to 80 percent of the takeouts happen through technologies that have been invented in the last four years.

19:08Aka drones and kind of these technologies are not conventional weapons. So managing that disruption is already one thing. educating the political leaders about this in countries like UK, Germany, where these political leaders and army leaders, which are two groups, again, that are part of the procurement, sometimes have a career of 30, 40 years. And some of them have been Eurofighter pilots, and now they're leading aerial defense stacks or Air Force stacks. And convincing a general there that you won't see any fighter pilot or any kind of manned aircraft anymore at the front line is something that takes a lot of effort and a lot of patience because these people have a certain aura and you know they've been in afghanistan and all these situations and then on the hiring side getting people attracted and getting into these syndicates of other tech stacks it's incredibly complex because on the one hand side the european army is rebuilding its software stack trying to have an independent even open source stack that they could connect to maybe a housing system maybe a system from Ukraine or maybe quantum systems to Kiva and then the conventional system.

20:14So this is something of an incredibly complex exercise for Europe. And that's why it's for us as visionaries where we think we can play all our superpowers because on the one hand side, we're connected to these political leaders. We had Ursula von der Leyen two years ago at Visionaries Unplugged speaking. We had a lot of the AI people just right now in Paris that are either part of our LP base or close to us, whether it's Dario from Entropic or others that we can really connect closely with our teams on the technology layer and on the political layer. But then for the procurement part, really, we can play our cards to make these connections to the heart of our defense industry, which are in many cases, family businesses.

20:50So overall, I think it's incredibly complex for a young company to get into this because if you have the best product and the best hardware and software, it doesn't mean that you get procured because you might have to localize. Like if you're a German company, you want to sell to the UK, you might have to build a factory in the UK to have a local IP so that there is no risk for the UK, you know, to procure from someone because it's security critical. You have to lobby to the right political leaders here. So it's an exciting time. And the last point is this is happening basically in real time. We were having a dinner in Munich a few weeks ago.

21:27Also, Torsten and others, where we said, look, it's not about a five-year project here for Europe. It's about the next 6 to 12 months to have a first move to get us kind of in a semi-competitive position. So we're talking AI disruption speed in an industry that has been 10 to 15 year project cycles, the slowest moving in the last 20 years. And where some of the companies also like Airbus and of course are giants that are used to long project cycles. So incredibly exciting as a VC to manufacture Seren de Pitti, try to work on these superpowers. And it's something that we try to do every day. How do you learn as a VC about a new industry like this?

22:04How are you making sure that you understand the dynamics that play well enough to give good advice to these founders when, as you just said, the playbook is quite different from maybe a lot of the industries you've invested in previously? I think that's the craft. And sometimes you miss these trends and you're too late. Sometimes you're ahead of them. On our side, you know, we call it push and pull. On the one hand side, half of the education are just founders that tell us about an incredible idea. And we're so focused on just backing founders that tell us what is great instead of us hypothesizing what is great.

22:37So let's take Anton, the founder of Lovable, which is one of the fastest growing companies in Europe right now. You know, we wouldn't have envisioned that you can build a tool that helps 99 % of the people on earth that are not engineers to turn the ideas into software and build this. And this is something that he has showed us that it's possible. And then you look into the market and you figure out, Jesus, Wix.com is doing 4 billion revenues. They're just a website builder, a Figma or a Canva, who are just like 10 % of the stacks of Lovable are doing 5 billion or we want a 5 billion revenues.

23:08So this is how you enter bottom-up interesting markets and you get excited about them and you need to be fast in on the one hand side trusting the founder that they will build something interesting out of it. And then normally if they build a monopoly in a space that is growing and they drive the growth, like, I mean, Lovable is not a monopoly, there's Replit and many others, but at least these are sometimes the strongest VC investments because they're in this exciting position that they own the market. Facebook is a good example, Google and a few of these. The other thing is more the top-down approach, which are inflection points that we normally feel as a temperature often from our family and entrepreneurs or from our industrial LP base as a market pool.

23:46So defense is a good example because it's basically a once-in-a-lifetime switch of a market going from zero to suddenly there's this geopolitical switch with Trump and bipolar world with China, Ukraine war, Germany just announced 800 billion in military spend over the next 10 years and all these kind of things. and that together with the insights of the disruption of the battlefield which is just hard work on our side so we've spoken to i don't know how many people in ukraine that are really using these systems we didn't just visit the companies you know and then you figure out wow it's a big difference if the ukraine government directly procures a technology and pays 100 million for it which is kind of the ultimate proof point that it's the technology that is performing best or if the german government donates 100 million worth of drones because they want to donate it and they want to do it in their own country to boost the economy but it doesn't mean that the ukraine would procure it so you need to go very deep to get that experience so trying to be between this micro and macro level this is how an opportunity like defense emerged for us that we have the geopolitical shift we have the disruption of the modern battlefield and we have the yeah of course all the new spending that has been announced and that's a massive market opportunity to to tap into but also personally of course a motivation to you to get us more independent in Europe.

25:00So this together gives the cocktail of opportunities that we try to invest in. And sometimes we're right, sometimes we're wrong. Which governments in Europe do you feel are most innovative or forward thinking on defense at the moment? I'm guessing Ukraine. Ukraine is insane. So I think if I can add one government that is really doing it well, it's actually the US because the US is so deeply involved into intelligence of weapon systems in Ukraine that they try to gain a lot of insights from how modern warfare has changed and they've got a lot of insights on how their conventional systems basically might get disrupted and to be just at the forefront of this happening and they themselves try to connect the dots even with own defense companies for example Ukraine drone startups that might have built something innovative or it might be a counter drone defense solution and really trying to connect their dots to make products happen that make sure they are staying ahead of the wave of the battlefield.

25:56If I look at Germany, France, UK, I don't have the perfect insights. I think what I see, what I can say is that there is an incredible mindset shift from peacetime procurement to now this more serious situation procurement. so I think in the past from what we have heard or what we know like procurement was very local very national it was not always the best technology that won but it didn't matter because there was no war this playbook is really shifting now more in the direction of Ukraine procurement to say we want to get the best functioning technology at the lowest price point and we want to make sure that we have the IP locally available because if things really go bad you know we can't be reliant on other countries so bringing this cocktail of these three elements together my impression is germany is starting to move fast if i look so we've just been last week with a few army representatives and it has been impressive how they took a shortcut on certain system stacks that typically would through the normal procurement might take years but they made this decision within a week because they a little like in the startup world you do a pilot you're looking for technology is functional And then teaming up with these teams, even if the technology is only 80%, working to get it to 100 % is something positive for the startups because they can kind of collaborate with the army and it's something positive for the army.

27:17So that's what we've seen there. I think in the UK, we've heard actually really good things. There are also quite a few service firms, you know, who built this bridge between government and startup ecosystem because they've been involved in procurement. And then I think, you know, this cocktail right now of the more like we want to be prime players of the 2.0 military like Helsing or Anderle and the very verticalized players like you could quote a quantum systems or you could take a sky from Ukraine, I think is important to have all of them in the mix. Other than defense, other than AI, which other areas are you excited about investing in at the moment?