About Seedstars

Seedstars is a private investment firm on a mission to impact people’s lives in emerging and frontier markets through technology and entrepreneurship.

Seedstars operates 2 main activities to achieve its mission:

(1) Work in partnership with governments, development agencies, corporate partners, and private donors to develop entrepreneurship ecosystems, create jobs and fuel income growth.

(2) Invest in high growth technology companies in fast-growing sectors and support them with capital, knowledge and introductions.

Since 2013, Seedstars has been supporting the growth of 850 technology companies through 90 programs executed in 45 countries while creating 20k jobs.

Furthermore, we directly invested in +80 high growth technology and impactful companies which have reached a cumulated valuation of $1Bn while creating 2.5k jobs.

If you want to learn more about who we are, watch this Cannes Festival Documentary: https://www.youtube.com/watch?v=V0GxPFuClic as well as this keynote speech: https://www.youtube.com/watch?v=4LImp7ISh-s

Investing in fund managers and their top performing companies

While actively deploying capital in technology companies, Seedstars identified an opportunity to support emerging fund managers (i.e. 1st-time fund managers / General Partners) in emerging & frontier markets.

Leveraging our unique network, physical presence (15 offices and 80+ countries covered) and knowledge of assisting the growth of companies, Seedstars supports the launch and development of a fund platform for emerging VC managers which will catalyze even more funding to entrepreneurs and technology companies in emerging and frontier markets.

With "Seedstars Capital" (seedstars.com/funds) we invest in emerging venture capital funds and co-invest in their portfolio companies across emerging and frontier markets.

Our existing platform gives us an unfair advantage and “Moat” to:

• Have insights, accesses and first-rights into the top performing companies that our fund managers are investing in while leveraging their unused pro-ratas
• Capture value from early-stage up to late stage: by investing indirectly in them through our fund managers and then through this syndicate

Why Emerging & Frontier Markets?

With 85% of the global population living in emerging and frontier markets, we see not only billions of opportunities to take, but also billions of lives to improve.

Great ideas and talent exist everywhere, not just in the Silicon Valley. Capital, business support, and access to networks, on the other hand, do not. We envision a world where every talented and determined entrepreneur has access to the resources that they need to grow their business and create a lasting impact in their communities.

Emerging & Frontier market VC (ex India and China) volumes grew 3.8x (40% CAGR) since 2016 to reach $9.5Bn in 2020.

Exits in our focus countries (non BRIC emerging markets) growing at 14% CAGR.

Average exit valuation between 2015-2019 grew +300% to $380M. A virtuous cycle is created -> exits create more exits as unicorns become acquirers.

Purpose of this Syndicate?

Syndicate some high conviction opportunities where we want to co-invest and/or follow-on into investments made by our fund managers.

Pipeline

Syndicate will invest in all the deals which our fund managers invest in. Our fund managers are sourcing opportunities through:

• Programs we operate in over 90+ emerging & frontier markets
• 15 offices in 12 markets and our team on the ground spread in more than 30 countries
• Strong and relevant venture partners network
• Community of VCs, mentors, corporate partners, ecosystem builders

Sectors

We will present opportunities in Financial Services, Health, Agri and Education.

Geographies

We will only invest in companies which are actively active in emerging and frontier markets. Those companies are in >90% of the cases incorporates in jurisdictions we are familiar with like in the US, Singapore, Dubai or Mauritius.

Investment Stages

Our fund managers are investing from Seed to Series A so we expect to co-invest along them through those stages.

For follow-on, we’ll be active starting at Series B.

The typical characteristics of the portfolio companies at the time of investment (for the most early-stage ones across our portfolio of 80+ companies) are:

Funding raised:

• Angel funding raised
• Seed funding sometimes raised
• Raised an average of $650,000 (min: $165,000, max: $2,100,000) at the time of investment.

Revenue:

• Revenue generating with a target minimum of $10,000 monthly recurring revenue
• Average of $27,000 monthly recurring revenue (min: $5,400, max: $80,000) at the time of investment.

Product/Service:

• The product/service must be fully live and stable. While significant product development is still expected, the team should have enough bandwidth to focus on sales, marketing and revenue growth.

Team:

• At least 1 person is fully dedicated to sales, marketing and growth.
• Average of 27 employees (min: 7, max: 90) at the time of investment.

Transaction Type

We run a venture capital strategy investing in equity or equity like securities (SAFE) taking minority positions.

Holding Period

For the early-stage opportunities, we modeled a holding period of 6 years per investment. As per the exit strategy described below, the strategy will be to divest in some investments early through secondary market sales.

For later-stage opportunities, we expect 4 years holding period.

Exit Strategies

We will adopt a broad range of exit strategies together with our fund managers including:

• Early Secondary Market Exits: For investments that do not receive a follow-on investment, we will seek an early exit at the next financing round. We intend to offer incoming investors 50% of the Syndicate’s holding at a discount to fair value thereby providing the new investor with a lower all-in price. Only 50% of the holdings will be offered to maintain the alignment of interests and also provide the Syndicate with some future upside.
• Late Secondary Market Exits: All companies will be targets for potential later stage secondary market exits at Series B rounds and beyond to later stage VC and PE firms. At these funding stages, our exit would provide additional shares to incoming investors who often have target percentage shareholding requirements. A full or partial exit frees up capital without founder dilution.
• Corporate Acquisitions: The corporate partnerships and relationships built by Seedstars (programs/events/advisory) since 2013 are critical avenues for potential corporate acquisitions. We will nurture these relationships and seek to bring onboard corporates as co-investors in early stages in order to facilitate exits for the Syndicate.
• IPO: It is feasible within the life of the Syndicate for a portfolio company to seek a listing on a local or international stock exchange providing a liquidity event for the Syndicate.
• Buy Backs: For profitable companies not seeking further capital we expect to engineer an exit using share repurchases or revenue sharing structures.

Value Creation

The Syndicate creates value for portfolio companies as follows:

• Growth Methodology: Seedstars has developed proprietary tools to teach participants a growth methodology based on global best practices. The core format of the Program relies on global experts in Growth Methodology to conduct weekly 1-on-1 calls with each portfolio company to teach their growth team the theory and the practical processes. The methodology helps the companies to identify growth opportunities and leverage them through a process of constant experimentation. In addition to the weekly 1-on-1, regular expert webinars are held on various topics related to Growth.
• Expert/Mentor Network: Companies access the Seedstars Mentor Network of 1300+ global experts and can request support on any number of challenges.
• Fundraising Support: Companies graduates typically reach a level of maturity where they become of interest to more institutional regional and global investors. Through dedicated outreach and Demo Days, cohorts can tap into the Seedstars Investor Network of over 800 active members from across the globe.
• Peer Group Network: Companies join the alumni network forming a knowledgeable community that can be accessed anytime for support via a private Slack group. Additionally, domain groups are set up with regular calls to facilitate knowledge transfer between companies in similar fields but non competitive geographies.
• Free / discounted access to SaaS tools: Companies access perks worth approximately $100,000 including free credits to AWS and discounts for commonly used tools such as HubSpot and Expensify.

Team

We are seasoned entrepreneurs turned investors who have been active in emerging & frontier markets for the past 15 years.

We built a company (Seedstars - seedstars.com), our own VC fund (Seedstars International - seedstars.com/funds/international) and a fund platform (Seedstars Capital - seedstars.com/funds) to impact people’s lives in emerging and frontier markets through technology and entrepreneurship.

The Syndicate will invest in all the opportunities which our fund managers, who are investing at Pre-Seed to Series A, invest in.

Our fund managers are sourcing opportunities through:

• Programs we operate in over 90+ emerging & frontier markets
• 15 offices in 12 markets and our team on the ground spread in more than 30 countries
• Strong and relevant venture partners network
• Community of VCs, mentors, corporate partners, ecosystem builders

The Syndicate will also be presented all follow-on and later-stage investment opportunities (Series B+) where our fund managers will not have enough capital (due to the size of their funds as well as their earlier stage strategies) to fully used and exercised their pro-ratas.