Case study
How Dealroom helps Northzone source deals and map the startup landscape across major European and U.S. geographies.
“Using the data that Dealroom has to substantiate trends, we can find companies beyond our established networks, in geographies we’re expanding into. The database helps us to be more efficient on the discovery side.”
Markus Gleim
Associate, Northzone
An early-stage VC fund
Northzone partners with founders at Seed, Series A and Series B stages, across Europe and the U.S.
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Challenges
- Obtaining consistent, up-to-date information on market themes within a vertical, in order to source investment opportunities that fit a thesis
- Maintaining a strong deal-flow pipeline beyond existing networks and geographies
- Adding speed and efficiency to the deal-sourcing process
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Solutions
- Use Dealroom to bring ‘science’ to the ‘art’ of sourcing investment opportunities and substantiate internal thinking about trends and consumer behaviour
- Leverage multiple data sources to add another layer to the inbound deal-sourcing engine
- Easily track trends and activity using Dealroom’s one-stop database, assessment and analysis
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Results
- Source interesting opportunities far beyond established networks in Europe, UK and US
- Ability to look at everything that moves, globally
- Ability to spend time where it matters — sourcing new VC deals
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Challenges
Driving early-stage businesses forward
Early stage VC fund Northzone is on a mission to help founders build great companies – something they have been doing for almost 25 years. The fund has raised over €1.5 billion and navigated multiple downturns with its founders over the past two decades.
“We’ve seen our fair share of macro trends and industry-shaking events over the years, and we have accumulated a wealth of knowledge,” says Markus Gleim, an Associate in the Stockholm office. “As founders and operators ourselves, we have a lot of empathy and experience about what it means to stand in those shoes. That gives us a really strong base to draw on and develop the long-term aspect of our partnerships, as we are there for the entire journey.”
“A great example is Spotify, who the firm have partnered with for 10 years.”
As an early-stage investor, Northzone partners with founders from Seed to Series B – although the company doesn’t like to put conventional nomenclature on the financing rounds. To connect with these opportunities, a couple of elements have to come together.
“We have a big emphasis on our network, but we combine that with how we think about certain sectors,” Markus reports. “Getting the right data is essential for us to find opportunities and act fast.”
Solution
Dealroom for efficiency and discovery
Sourcing deals is one of the most important – and time-consuming – activities performed by venture capital firms. For Northzone, sourcing has an inbound and outbound deal flow.
“On the incoming side, we work closely with the founders we are partnering with a broader ecosystem of angels and other investors,” Markus explains. “Having that great network really helps us to find ideas and opportunities. Also, with the brand we’ve built, we get a lot of incoming requests from founders and we process every single one of those.”
“That’s the first way Dealroom is helpful because it helps us learn more about companies at the granular level. If relevant opportunities surface through other means, for example, through our networks, then Dealroom adds to our efficiency.
It’s a one-stop-shop with all relevant information, and we can use the data to uncover similar types of companies that we might want to take a look at as well. ”
On the outbound side, Northzone proactively thinks about trends and themes in the market and what is emerging as a result of shifts in different industries and in consumer behaviour. That helps them develop a view, which must then be substantiated and tied to the companies the team sees popping up in that space.
“That’s another area where Dealroom is helpful,” says Markus, “because it lets us complement the qualitative thinking with quantitative data about companies that are active in these areas. “Using the data that Dealroom has to substantiate trends, we can find companies beyond our established networks, in geographies we’re expanding into. The database helps us to be more efficient on the discovery side.”
Results
Sourcing investment opportunities in Europe and beyond
Northzone’s roots go back to Norway, but it now has dedicated teams on the ground in Scandinavia, the U.K. and on the East US coast “All of these markets are very competitive, and all our teams are proactively involved in deal sourcing” says Markus. “That process is similar across all geographies, and Dealroom complements the work we do in the US equally to what we are doing in Europe. No one can deny that 2020 has been challenging in all geographies, yet Northzone’s portfolio companies have been in the spotlight with great news: Klarna, Kahoot!, FubotTV, Truelayer and Market Finance to name just a few. How does Northzone enable its startups to succeed in such difficult times?
“Our team is well-positioned to help founders drive through the tough times, our partners having been through several downturns and we think strategically about the short-term impact they need to navigate, as well as helping them securing their financing..”
“People say that good, category-defining companies are started in recessions and it’s our experience that the best startups really thrive in periods of disruption. We invested in Spotify in 2008. As the economy digitalizes, the best startups leverage those wider trends to accelerate their growth even more. That’s why long-term partnerships are so important to us, so we can help these companies really earn their success.”