Who is NEVEQ?
Who is NEVEQ? An early stage, emerging market VC fund based in Europe, delivering above average investor returns through global investments.
VC investing requires access to compelling and global investment opportunities, knowing experienced entrepreneurs and a base in an open economy. Plus, a global mindset. NEVEQ launched up in 2007, at the verge of EU's accession of Bulgaria and Romania. The collapse of Lehman Brothers two years later provided our investors and entrepreneurs with first of several tests of our resilience. Many of the most experienced LPs in Eastern Europe, such as the EBRD, backed us and provided unwavering support through the cycle. Today, both this backing and resilience help NEVEQ shape up as top quartile performer in its class and vintage. We have investments in three major markets, US, India and Brazil, a global business model and co-investments with leading players in both developed and emerging markets.
This approach helps us manage both the upside and the downside for our investors. Exits, co-investment opportunities, balancing risks and opportunities, frequent face to face interaction between LPs and portfolio entrepreneurs and timing helped us retain LP trust and raise a second fund with EIF as an anchor investor, in 2013. See http://youtu.be/bpwRZr4deIk, also available through our home page, for more details.
Why are we excited about emerging markets? Emerging market business cycles exhibit strongly countercyclical macro factors and consumption volatility that exceeds income volatility, and “sudden stops” in capital inflows, when we can become unique capital providers. Emerging and frontier markets are expected to experience steady and significant growth, whilst the Western economies grow less rapidly. According to The Economist, $3-$4 billion of venture capital deals are currently done each year in emerging markets, more than double the amount in 2008. This is a larger market, with ample room for small and focused players, such as NEVEQ.
Why do we operate out of Europe? We are European. Much like Marco Polo, we set out in small steps to explore and learn about what lies beyond home. Prior to launching the fund, its two founding partners had started and ultimately, successfully exited an alternative carrier and a business services company, to global industry leaders, Deutsche Telekom and TeleTech. Together, we replicated this track record with the exit of 3DC to TeleCity. Then NEVEQ went global, as our bets in online travel distribution, market risk management and unstructured information management managed to grow 5x and gain the trust on industry leaders, as customers. Last year, Lufthansa backed Vayant, in a deal which was unprecedented for the European VC scene: global #1 in revenues invested in a software startup, competing a trio of natural monopolies, plus Google. Being European helped. Being in Bulgaria helped further, to keep costs competitive, hire some of the best engineers, and leverage an open economy, with a 10% flat income tax rate and Europe's fastest broad band access, such as 100 mb at a low teen digit monthly cost.
How do we deliver above the average investment returns? Working with structuring experts from EY and bank financing from Unicredit and M&A support from boutique firms around the world, we were able to invest capital globally, from India (consumer broadband, B2B2C) to Brazil (digital real estate enabler, now a top 5 player). Our approach is to back experienced teams, targeting a global opportunity, with unique product or service, with support from well-connected industry board members. Working with co-investors is something we did not have access to when we started 7 years ago, with no track record and with the market shocks of 2009-2010.
We are excited to bring old ideas to new markets or sometimes to go where no one has yet been, with trusted partners and people on the ground. Work cures everything, according to Henri Matisse. At NEVEQ, we would add the word "creative" and subtract any special conditions.