Why Vinted moved into venture, with Milda Jasaitė

0:01There was no deal that my team has done where we were not texting at 2am. I don't think anything gets done, nothing gets over the line if the person is not pushing for a certain amount of time. And I think that's very natural and I think it has to be in a way this way. So hello and welcome to Startup Europe, the Sifted podcast. The show where we help you get to know the brightest and boldest people in Europe's startup ecosystem. I'm Amy, Sifted's editor and your host. And today at Italian Tech Week, where we're recording this live, I'm joined by Milda Yesaita, the head of Vinted Ventures. the VC arm of the well-known and well-loved second-hand marketplace.

0:42Milda, welcome to the show. Thank you, Amy. Is this your first time at Italian Tech Week? It's my first time, even though I studied just an hour away. My master's back at Bocconi. I've never been to Italian Tech Week, and it's quite amazing what kind of crowd there is. So really great couple of days. We're fresh off of hearing Ursula von der Leyen and Jeff Bezos on stage. There were lots of bodyguards. I heard helicopters arriving. There were lots of police outside for anyone who's not here, who's listening in the future. It was quite the show. Right. So Mildy, you joined Vinted almost seven years ago now to lead M &A for the company.

1:20But earlier this year, you announced the launch of Vinted Ventures, a VC unit to invest in other re-commerce businesses, which is a kind of fairly unusual move for a company of Vinted's, I guess, size and age. What was the logic behind it? Right. Yes. So I think with Vinted, what we're doing is we're building out a new category. And so for us, that category is re-commerce. And we think we're ready. You know, we kind of made a dent, but we think there's a much further way to go. And just because of that, because we believe the market is very large, we also think that there are pockets of opportunities where companies can actually also go deeper into the value chain and help us solve re-commerce.

2:01So for example, I was talking a little bit about it yesterday. Like if you think about shipping, shipping has to be very cheap because otherwise no one is going to buy and sell three euro worth of t-shirts. And then payment flow also has to work for C2C because that is the kind of transactions that we are enabling. So it's not just that there's a space to build other platforms for secondhand, but there's also a space to solve the value chain of e-commerce because it is a kind of a different type of e-commerce. So we just overall believe that the market is there and it's just going to grow. I think the other thing is also that we've been seeing interesting companies along the way and they've been approaching us.

2:38They were asking whether we would be considered to make an investment in them. They would also often appreciate the fact that we can kind of bounce with them. You know, what do we think it looks like? What is the type of health of the marketplace that you should see at a certain level? because we are very data-driven. So we actually have a lot of playbooks, a lot of frameworks. We always have a set of metrics that we're tracking. And so they would be always very interested to kind of discuss with us and then maybe benchmark themselves a little bit more. Also maybe have a little bit of confidence in some of the decisions that they're making.

3:11So we've been also seeing that happening. And then us also being profitable now for a couple of years in a row, we actually thought, okay, now it's the time because we have these three elements together when we can launch Vinted Ventures and actually invest in fellow pioneers that are creating startups in e-commerce. And have you made any investments so far? We actually, we just launched. We've done one. It's a little bit under the radar, so we haven't announced it yet. Our overall plan is to make a couple of investments a year. I think it comes naturally from the fact that we are focused only on e-commerce, but we also do it with a financial goal in mind.

3:47So it can be tempting to say that, you know, I want to invest in this. I want to stay close to the model, etc. But that's not why we're doing it. Financial return is actually very important to us. The number one reason is that if we actually get financial return, then this is sustainable and we can actually continue investing in venture. Otherwise, you know, it's going to take a couple of years and probably we wouldn't be able to continue. So it's good because it keeps us sustainable. The other thing is that if there's a financial return, it's a little bit of a proxy if the company has been able to scale.

4:18And while we ourselves, we are in re-commerce. The type of impact, for example, we make is we're doing these sustainability reports and we have some estimate that around 40 % of the items that people buy and vintage are replacing a new purchase. So that's kind of the positive impact that we have. And so these other companies, they might also be in re-commerce. Well, they will be in re-commerce, so they might also have a certain positive impact. And if there's a financial return, meaning that they can be an outside player, then it's also more likely that they can have this impact more at scale.

4:49So that's also a good thing. So I think these two together just also makes it very important for us to focus on the financial return. And are there particular sectors or areas or types of expertise that you're looking for in particular? I mean, as you said, Vintage is a lot more than just the app these days. You also do shipping. You've moved into all sorts of categories like premium fashion, electronics. I feel like every time I open up the app, it's telling me that I can sell some new category of things. So are there investments you want to make that track with sort of where Vinted is at now and where Vinted is maybe going to be in a year, two, three years?

5:27Not really. So actually the investments we want to make, they're very much driven by what's happening externally. So what do other founders identify as the problems and where they believe they can have the solutions and they actually really work on them. So it's very much driven externally. We do have this kind of blanket of re-commerce because we think that these are the areas that we are hopefully quicker to understand and get the logic behind and therefore have some sort of edge to assess because otherwise that's why we wouldn't, let's say, invest in mobility or other type of business models like SaaS business models because that just kind of further away.

6:06So we have this blanket of re-commerce because that helps us to understand what the companies are doing. But then it's really much driven by what they identified as the type of problem they want to work on. What are some of the most exciting companies you've seen recently? What kind of things have they been working on? Well, I was actually just chatting to a founder of River this morning. They're working on last mile autonomic robots for delivery. And they actually have these kind of neural networks installed within the robot. So then the robots can make kind of on the spot decisions. For example, if there's a dog that's running at me, you know, what, you know, what do I do as a robot?

6:45So it's not that, hey, if someone is approaching, you kind of need to stop, it actually tries to understand what's the right thing for me to do. So I mean, just today, I'm at this very exciting company. Amazing. And how is your process different when it comes to actually acquiring companies and investing in them. What leads you to do one and not the other? Yes. So I think it's kind of really, I would say it sounds similar, but it's actually very different things. For the investments, it's really about what the companies are building that are usually in the need of the Series A capital. So we want to invest, but that's kind of where it stops.

7:22And then with the M &A, it's very different. So M &A is usually driven by our strategic roadmaps. So for example, you mentioned that you can now buy and sell premium fashion on our app. And when we were thinking about expanding into premium fashion, we kind of looked ourselves into what are the value proposition gaps that we're missing, and then how could we fill it up. And we identified that one of the elements that we should have is a verification service. So we were then seeing which companies in the market actually have, you know, a good verification service and then what it would take for us to build it.

7:58And we started conversations with this company called Rebel and we acquired them because they could really, you know, accelerate this element for us. So it was very much driven by what we really wanted to have at Vinted at very near future. Do you ever find companies being a bit hesitant to share data with you or benchmarks because they think that Vinted might like steal their idea, you know, because you are a big, big player in this space? Is that something you have to kind of counter? I think for every overall M &E process, it doesn't matter what industry, it doesn't matter who the potential company that wants to sell they're talking to, there's always this tension.

8:37But I think the reality is that there's never ever going to be a deal done if, let's say, the buyer is not able to really understand what the company is about. So it's just like a natural tension, but the sharing kind of has to happen because otherwise the deal cannot happen. I think like in our cases, we also usually share certain information about us to kind of also help the team understand, for example, like why do we find something exciting or why would we like, like if it's a merger conversation, why would like to actually merge together? You know, what do we think the future could look like?

9:11So we just are also very diligent. Like if we're, let's say, now are specific about M &A, then we're very diligent in preparing, you know, how do we think the future of integration looks like? We show how serious we are because we talk to them, how should the two companies operate together? We also talk about the uncomfortable questions, if there's anything around that. So I think that's how you kind of, you know, compensate. And in any case, you have to build a relationship with a team and to build a trust. So it can take time. Most of the companies that we invest or we, in other cases, acquire, we also might know them for a while.

9:45And it's quite natural. Have you had any other companies come since you've launched Finted Ventures and say, how does it work? We're thinking of doing something similar. Good question. I think it has been more us going and talking to other companies that have successfully launched their venture arm. So we spoke to also the ones that are doing it out in the US because there's much more of this corporate venture capital that's very successful in the US. So we took some examples of their playbooks. I haven't had the companies come to us, but if there's anyone, we're usually very open in the knowledge sharing.

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11:02Head to hsbcinnovationbanking.com to get started. Outside of your day job, you've also started an initiative to increase the gender balance that we see on company boards. How did that come about? When I came back to Lithuania to work for Vinted, I always found that it's very nice to have kind of a group of people that are your peers and you can exchange and it's just even broader than your work setting. And there's this amazing association called Lidere in Lithuania. Lidere translates into a female leader in English. And what they have is that they focus on four initiatives themselves. So one of the themes is increasing gender balance in leadership positions.

11:45The second one is having equal pay. Third one is having the infrastructure so you can actually combine family and work. And then the third one is how do you ingrain from the very early age in the education, no notions around gender stereotypes. So when I joined the association with, let's say, my partner in crime, this amazing lady, Vila Borgiana, who has her law firm back in Lithuania, we launched this project that's really targeted at, let's say, the board level. and the way we think about it is that when shareholders or CEOs of the companies or board members, chairs of the board, when they're looking for other board members, they usually go into the vicinity of who are the peers that they know and then usually that's the supply that they have to select the board members.

12:29So what we wanted to do is just to expand the supply because there are a lot of very strong female professionals and sometimes we would get a call like, hey, hey, I'm shaping a board. Do you know any other good candidates that we should talk to? So we just wanted to make it more structured. And we have this curated platform of these professionals. So now, whenever there's a board being shaped, this is as a resource that the companies can turn to. And we have professionals who are already on two boards, three boards, four boards, and they're in so many different sectors. So it can be pharma, it can be tech, it can be legal, it can be finance.

13:06So it's just more about increasing the supply. and which then in the end, you know, based on the merit, shapes up the structure of the boards. Do you find that lots of people don't realize that they have good board member material as well? I think that is maybe part of the thesis, let's say. They don't realize or they don't know. Sometimes it's also an encouragement that can really help for certain professionals to feel like, hey, I should actually, you know, if I want to, I think I have the skill set to go and fly and to be on that board. And we also try to address this part around encouragement.

13:42So once a quarter, we gather all of these professional candidates into one room. We call them candidates because it's kind of how we position the platform, but these professionals. And then we invite someone external who is actually sharing a bit off the record about their board experience. And it's usually what you were saying was kind of an inspiring morning here in Italian Tech Week. And then we also have this inspiring morning together with them. And we've had examples where they actually said like, oh, you know, this encouraged me to apply now for this board. And I actually am like, and that lady is on the board right now of a certain business.

14:15So I think encouragement is very important. It was very nice because we had Karolina Brokado from Equity who's on the board of Vinted. She flew into Vilnius for our board meeting. And then she also did this fireside chat with a group of professionals in Lithuania. That was very inspiring. Always very good to have this international experience as well. Do you think there are any other kind of concrete steps that either people listening to this podcast who think, hey, maybe I would like to be on a board or people listening to this who think my board isn't diverse enough or even companies to, you know, move women into leadership positions?

14:51What are some of the actions you think companies can take to progress things? Right. I think one of the things which is what I've been now referring to is really to expand the scope of the candidates. I think that's thing number one. If you don't have diversity in the candidates, there's no way that you're going to end up with a diversity at the top. I think another thing is to try to catch perhaps one's own stereotypes. And so it's not, you know, kind of a very easy fix, but it's to be a bit more aware, perhaps, of where I'm jumping to certain conclusions where I shouldn't and just try to be a bit more objective.

15:29I think that can also help to increase diversity. What about Vinted itself? How does Vinted's leadership look and what are some of the initiatives at the company to, I guess, help young or early career female talent rise up to those positions? So I've been myself at Vinted for seven years. I started even part-time and now I grew up to be also part of the leadership. So I think that's like a really nice example, even for myself, that we are enabling this in the company. Right now we have four female professionals at our leadership. So it increased quite a bit over the past 12 months. So I already see that we have, and part of it is actually internal talent growing into these positions, which I think is another angle, which is good if the companies are also able to take versus necessarily looking for external talent.

16:19So I think this is something that we're really trying to encourage as well. I think the other one is also, half of our company is in engineering product, data and analytics design so we also try to increase supply of diverse candidates in those in those for those positions so that we also end up with a nice mix are there specific things vintage does when you sort of spot really really amazing talent or talent that you think could change the business i'm thinking jeff bezos on stage just a little bit earlier was talking about how important it is maybe especially for really big companies to identify the mavericks was what he said like Find your mavericks and don't chuck them out because they think differently from other people, but, you know, help them thrive because they could really help your business.

17:07I wonder what happens to the mavericks at Vintage. I think we're growing very much as a business ourselves. And as mentioned, we launched the shipping, we launched payments. So there are a lot of new projects that people can take up. So we try to make sure that these people can really then be enabled to make a broader impact. So another aspect of your life is that you are quite amazingly a member of Lithuania's national ice hockey team. And I hear a lot about, I think, VCs and founders often like to make parallels between themselves and athletes. And I sometimes wonder if that's just, you know, VCs flattering themselves.

17:44What do you think? Do you think there's parallels between the world of a top, a world class athlete and a founder? interesting question i think if you're if you're a founder it's very obvious you you need to have a vision you need to work very hard you need to put a lot of yourself into it if you're an athlete you need to do the same you also need to believe that you can be better and you need to go every day into your practice or or whatever type of sport it is and you need to really do the things that will make you stronger. So I think there, there is parallel. I think it's what you mentioned around founders and athletes.

18:26I think a lot of the founders or in general, people who have intensive works, they really need sport to kind of maybe let off steam or just have this couple of hours where they perhaps are not thinking about the business and they just can really focus on the sport. I think that's something that sport really brings you. And it just really helps you to be more energized the next day. I think to me, the work can be intense which I really like but then sometimes I would go into the ice hockey practice and I would think oh my god I really have no no energy I think pizza and the couch sounds much better but I said I'll come so I'll definitely gonna go and then I go there and somehow I have the energy and we play an hour and a half and afterwards I feel like I have two more hours of fresh heads even though it's already late into the night so it's quite amazing what sports can give you.

19:13And what is the What is the balance like at Vinted, whether you like that word or not? There's been so much chat this year about the 996 culture and whether, you know, in order for European or any companies to succeed, we need to work as many hours as we possibly can. What do you think of that? So I don't think anything gets done. Nothing gets over the line if the person is not pushing for a certain amount of time. there wasn't any deal there wasn't any integration that we've done that we didn't really have to just you know put all of our energy into it and i think that's very natural and i think it kind of has like it has to be in a way this way like it just is that's a little bit of the reality it doesn't mean that it's every day like this so you can definitely you know find the find the pockets where you have kind of you're able to do the work within the time frame where you can also have then some periods in the evening where you can relax.

20:09And I think that's also very important. But again, there was no deal that my team has done where we were not, I don't know, texting at 2am, like did the signatures come in or having the last negotiation rounds and then changing the last clauses and, you know, just finalizing the negotiations or checking if our integration dashboards are working, if the APIs are connected and on all of that is going successfully. But I think that's also exciting. And how did you get into ice hockey? So funnily enough, it was Tech World that brought me there because there's this other conference called Slush. And I went there back in 2016, perhaps, when I was working for Early Birds.

20:53And they had this investor-founder game. I've never played ice hockey before. I knew how to skate forward, not backwards. But I thought it sounds lovely. So I pinged Timo Ihopelta from Lifeline Ventures. And I asked him, hey, can you put me on the on the investor team? So he did. I flew in first time I put on the gear and I just loved it so much. Then I was living in Germany. So, you know, I didn't think I could really pick it up. But when I moved back to Lithuania, I thought like, nice, like I speak, you know, it's my it's my home country and my home language. Maybe I can learn ice hockey. I went to the first practice and I loved it so much.

21:27Like every evening I was just going to play ice hockey. and Lithuania was still at the very early stage of the sport. So we had the first Lithuanian national team probably one year into when I was practicing. So in a couple of years I made it and then I was playing with the ladies for a couple of years. So slush is to thank. That's pretty amazing. And for anyone here who doesn't know that much about Lithuania or its startup scene, can you describe what is it like? What are some of the big companies? Is it a friendly, helpful ecosystem? What's going on? I was talking yesterday to Henrik from Sprints.

22:06He was asking, where do I think that the drive comes from at Vinted? And there were definitely a couple of things, but one of them is also the context of Lithuania. So we're a very young country. I think people have the drive to succeed, resilient, ambitious, always looking for pockets of opportunities. So I think overall, it's definitely a good kind of country where people really can be also startup founders. I've been observing the scene since probably 2014, 15, when I started early stage investing when I was living in Germany. And it really changed a lot. So Vinted was the first unicorn in 2018.

22:45Right now we have three unicorns. The other two are Tessonet and Baltic Classifieds Group. and we also see that out of these unicorns, you actually have people coming out who are building their own company. So I think there are already 20 people from Vinted who started building their own startups. And I think there was also a point made by Jeff Bezos that it's actually a good thing for a founder to sometimes work in a certain company where you can learn things and then you can go out and already use those playbooks and actually not repeat some of the, you could say maybe mistakes in your own business.

23:20So it's very exciting. We also have now this Unicorn Association. So it's connecting most of the founders in Lithuania. And there are a lot of off-the-record sessions. So it's extremely collaborative. People really help each other to understand what's the best way to fundraise. Where can I hire the best developers? Or what are the best tactics? Or things like that. So I think it's definitely very collaborative. First pick is they're an early stage VC and they do this report every year where they look at into the funding in the in the in the Baltics. So Lithuania in the first half of 25 landed at 180 million.

23:58That's up from 110 million in the same period last year. So you can see that more of the funding is really coming in. You can also see that the funding is coming in at earlier stages. So even though Axel, for example, invested and invented back in 2013, I think it was Sirius A. Now we saw a seed investment in Sintra AI that was worth 17 million and that came out of ABC in Germany. We also have more of the local capital. So I think it's quite important that the local capital is growing the startups from pre-seed to seed to Series A because then it's easier for foreign capital to kind of understand what these companies are doing and have more conviction to invest.

24:36So we also have active angel networks. We have very active VCs such as, I mentioned First Pick already, but Contrarian Ventures is another one, Practica. And so these really are funding a lot of the companies that are in Lithuania. I think the other thing is that some of the companies are now also acquiring others. So I think that's also exciting for the region. So we've been acquiring certain companies. Tessanet also has done acquisitions. PVKs has done it as well. Oxylab. So you actually see that the region already matured to the extent where they can even acquire other companies. And there's a lot of underground things happening as well.

25:17So there's so many things that we have now, even our own media publication, Tech Philomats, that's actually uncovering a lot of things that before you even know that they're going to have a fundraising round. So it's really vibrant right now. What are some of the missing components, would you say? I think later stage capital is definitely one. So often we need to count on foreign investors to come in and back the companies. I think what's nice is that you actually already have a variety of models that are successful that are coming out of Lithuania. So you have more companies to learn from. For example, we are a marketplace.