Balderton Capital's 25 Year Anniversary: An Interview with Bernard Liautaud and Suranga Chandratillake - Scaling Europe

Celebrating 25 Years of Global Ambition Hello, welcome. I'm here from Bulletin officers with Bernard and Suranga, 2 of Bulletin's most long standing partners to talk about and celebrate 25 years of Bulletin. Thank you both so much for joining me. Speaker 2 Thank you. Speaker 3 Thank you, Seb. Speaker 1 First question I want to ask, how has Bulletin managed to survive for 25 years and thrive in the ecosystem? Speaker 2 I, I think, you know, it's all due to the quality of the entrepreneurs whom we have had the chance to, to work with. Because at the end of the day, the, the success of, of Bollington is the success of the portfolio companies. We've had the chance to focus from the very early days on entrepreneurs with great ambitions and who want to, you know, build category leaders. So even in in the first fun, we had companies like MySQL, we had companies like Global Force or Ukes or these companies that became, you know, amazing, amazing leaders at the very, very beginning of the ecosystem. And then I think we had the chance to be there at the right time when the ecosystem start to grow and and produce a lot more great companies. Speaker 1 And from the outside looking in it, it looks like what Paul did, has always done amazingly, is choose European founders or entrepreneurs who are global, who have huge global ambitions, huge global outlooks. Has that been was that, has that been the intention from day one? Speaker 3 Yeah, absolutely. I mean, so day one was before Bernard and I were at the firm obviously. But you know, the, the, the history of, of Bulletin is that it was founded by Benchmark, obviously AUS firm and they wanted to build a European sort of copy of what they were doing here, here in London. And, and, you know, they'd always backed global founders in Silicon Valley. And they said there's just no reason why we can't expect similar, you know, global ambition, amazing talent that just happens to be in Europe that have just happened to grow up in Spain or Italy or the UK or Germany. And so that's always been in the DNA. That's always been the way we've looked at things. And yeah, and as you know, there are, it turns out has been our says, you know, a number of those out there and we've been fortunate to be able to work with a bunch of them. Speaker 1 And how is both of your experiences and careers helped you to find those people? You're both exit founders. You both built great European businesses and I think you both took your businesses to the US So you you both fit that archetype of European founders with with global ambitions. Has that helped you to kind of find and source other people like that? Speaker 2 Yeah, absolutely. Balancing Operator and Investor Expertise in Europe And then I think our experience has been appealing to these founders. So they're really good founders. They have the choice, right? They can pick whomever they want as their partners. And so these founders have found us in a way. And I think the fact that we've done what they were trying to do, I think has been a great plus for for us and for, for Bulletin to find these people. Speaker 1 And do you think that's a big value add as AVC to to be company builders yourselves? Speaker 3 Yeah. So I, my take is that you, I, so I think so first of all, investing is a very different job to, to, you know, starting or running a company. There's no guarantee that being good at 1 means you're good at the other. And in fact, I think there are many people who are good at one and not the other, but there are people who are good at both. And I think what we, what we think is that if you look at particularly investing within the context of venture capital, it's a really interesting mix. On the one hand, it's very much like other investment professions in the sense that it's about understanding markets and, you know, seeing an opportunity and measuring that and scaling that and so on. But it's also this very, very human investment business because we back companies when they're very early. There's a lot of growing pain involved in going from, you know, two people and an idea up to 100 people, up to thousands of people as investors, although we're minority investors, we're pretty large investors. And so we're very involved in that, very, very hands on. So you have to have this really interesting combination of thinking like an investor, understanding the sort of financial side of what we do, but at the same time being someone who understands that, you know, you can have all the great spreadsheets in the world. If you're not able to sort of get in there and help out with the company and be there for the founders as they're building their businesses, then it's not going to work. And so as a firm, we've always tried to create a bit of that balance, right? So we have people in the firm like Bernard and I who have very strong operational backgrounds. We've been found as ourselves, but also we have people who are amazing financial investors. And I think having this mix and creating a culture where these different perspectives can come to light, that's sort of what's worked really well for the. Speaker 1 First, yeah, that's super interesting. There's a lot of noise at the moment about whether Europe needs more ex founder VCs and that we have a much more risk averse culture compared to the US and the US has has made or the VCs have have a lot more operational experience. And I guess what you're saying is that you need that balance of both ex operators and people who are just great at investing, looking across the European ecosystem, do you think we've got that balance right or do you think we do you think we need more ex operators in the ecosystem? I. Speaker 2 Think we need more operators. I think if we compare US versus Europe, I think it's still that unbalance still still exists. So we need more. But again, we are working to have a diversity of people and to have the investors to have the operators and to confront these views. When you make an investment give you, if you think about what we do, we we don't just mentor and coach entrepreneurs. That's one part. But we also have to source and we have to win and we have to pick, we have to make the decision. And so when we are in front of an entrepreneur figuring out can we want to back that company on that. The other one, it's it's confronting views that have different perspective, I think is really important. How Equal Partnership Ensures Firm Sustainability Yeah. But one of the. Speaker 1 The unusual things about Bolton, which is inherited from its benchmark days, is the equal partnership. And now that Bolton has been around for 25 years, I I wanted to ask, like, how has that founding principle stood the test of time? Speaker 2 I think it, it worked really well and, and it's been a foundational principle of, of benchmark. And it, it was as well for, for us. They, they, they brought that, that principle to us. And I think it works really, really well because then first of all, there's, there's not one who dominates the other. Everybody has the same view. We also are not the same view, but the same weight in their views. And we know that the success of Bulletin is success of the collective group. So when we approach an entrepreneur, they know that it's the entire partnership that makes that commitment. And therefore, if if at some point in the life of the company they need my expertise or they need surround as expertise or run as expertise, they have access to all of this always. Speaker 1 And have you seen that model spread at all across the ecosystem? Speaker 3 Yeah, I think there are a number of more modern firms that have the same strategy, at least to start with. I think it often erodes over time. And but like Bernard says, I think we've always felt that it has huge benefits both for the entrepreneurs we work with, but also for the firm internally, you know. So, you know, for the entrepreneurs, it's absolutely this idea that, you know, everybody is equally vested in your success, right? Even if they disagreed with investing in you in the 1st place, which you may never know. Once we have invested, we all care because we're all tied to it. And you can therefore access whoever you want whenever you want them. And that, you know, some of our founders have done a brilliant job of, of kind of using different people at different times. And then internally, it creates a culture where everyone's voice is heard, everyone's voice is equal. You know, the backgrounds that you have bring relevance to your voice, but they're not never that that's never allowed to sort of drown out the other voices. And I think that creates just the right level of antagonism and tension in some of the conversations. That means that we challenge what we're thinking all the time. And it also means that, you know, people don't have to worry about it. It's not about positioning yourself from a career point of view or anything like that. You know it. Speaker 1 Becomes a lot more of a team sport. Speaker 3 It's a team sport, yeah. Speaker 2 But also I think the thing that is really important is that we believe it's a key component in order to have a a sustainable firm. It's true. If you have one or two people who dominate the partnership, have more economics and more decision power, then the succession is very, very difficult. Whereas here we have been able to you know stay for 25 years and we will be able to have a firm again in 25 years because the succession is is much more, is much smoother and it is because of the equal partnership. Adapting to Competition and Evolving Partner Roles Structure interesting. And how has the role of partners at Bulletin change? You know, when it was benchmarked Europe 25 years ago, I think there were a small number of just partners. Now you've got these amazing offices, you have principals, associates, entrepreneurs and residents. You have, you know, finance marketing teams like how is the role of a partner of bulldish and change when it was a very small, just a partnership to a much bigger organization than it is today? Speaker 3 Yeah. So I I would say it hasn't changed a huge amount. Interestingly enough, I think we, you know, our sort of successes means that we can bring a lot more to the table. And, and, and so in particular, we've been able to invest in, you know, operational teams, platform teams that bring things like legal, financial, HR, you know, talent marketing, etcetera expertise to the companies and they can use all of that. That's fantastic. Yes, we have offices like these which allow us to be a lot more of a host within the ecosystem and a a networker and so on. But the, the core business still comes back to, you know, being out there on the street finding really interesting companies, you know, thinking about them, spending time with them, and then as a team making decisions about which ones we're going to invest in. Then hopefully getting the opportunity to do that. If you can convince the founder to feel the same way. And then working with them as they build their companies, providing more finance along the way, and then ultimately figuring out what the outcome ends up being. So like the core is still the same. And at least for me, that's like, if the core change, I'm not sure I'd do it. You know, like it's, it's part of the magic of this job is that you, you know, one day you meet, you know, 2 founders with a team of sort of three or four people. I was, we were sort of remembering recently because a 10 year anniversary of meeting Nick and Vlad at Revolut for the first time that I think it was like a team of less than five people at that point, you know, with an idea, a PowerPoint and not much more. And then you look 10 years later at what it is, you know, the Revolut is this huge international behemoth that continues to grow at an incredible pace with thousands of people building amazing product. And we get to, you know, we have a front row seat of all of that. And that's that's an amazing privilege. And that hasn't really changed. Speaker 1 Yeah. And has has the way Bolton operates or the way that you do your job as VCs, has that had to change a tool to reflect I guess the growing VC ecosystem across Europe? I think you know, 25 years ago there was Bolton Index, Excel, we're probably the the only three big VCs across Europe. Whereas now that there's a lot more cropping up, have you had to change to remain competitive and to keep winning? Speaker 2 Yes, I think you, you mentioned that we're a different firm now than when we, when we started 25 years ago. We're, we're a bigger firm and it's because entrepreneurs are expecting more from, from their VC. So we're, we've evolved and in, in some areas we've taken the leadership in bringing more services to help the, the, the enterprise much more than than we were doing before. So I think yeah, it's becoming a much more competitive world for sure. There are probably a dozen of, of, of companies who compete from, from time to time and more US farms, other European companies and and so on. But in the end, with we managed to stay at at at a high level in, in Europe because we have, we have grown. So when we have felt at some point that we needed to be more of a platform, so not just take a, a single firm in one stage was just a small group of partners, individuals. But now we have, as you said, we have a, a full platform for value creation. We do early stage and we do, we do growth. So we can actually follow the the, the firm or the companies from the seed all the way to IPO. And that evolution has been critical to keep us on top. Balderton's Growth Funds Address European Capital Gap And I wanted to ask about the growth funds. I think you've, you've raised 2 growth funds now and for a long time Bulletin wasn't really focused on growth. At at what point did you decide that you needed to to raise the growth fund and and why did you make that decision? Speaker 2 We started actually in 2018. So it's been quite a while now and we thought they are great champions being created in Europe now more and more than than we had in, in the past. So the ecosystem is, is growing and necessarily they're going to be companies that we're going to miss or either because we didn't meet them then or we, we didn't think that they had quite the ingredients that we wanted. And we thought it would be great to be able to still support these companies at a slightly later stage. And, and even if we invest in a series B or series C, there's still enormous value to be created and we could still help these companies tremendously. So we thought, hey, we, we want to play along the, the, the full set of stages of a company as opposed to just just very early. And, and by the way, by doing this, it will make even the early stage fund more competitive because it's, it's more compelling for an emperor to know that your partner in the early stage can follow you all the way. And also the fact that we had an early stage fund, we thought would be a competitive advantage for the growth fund. So there was a lot of great reasons to do so. And we started by doing secondaries to begin with in 2018 and then transferred that into a fall. Speaker 1 Growth fund and how how has it been because you know, the growth investing is very different to the early stage. How, how was that kind of transition from from being an early stage focus on to being, you know, kind of like a full stack? Speaker 3 So, so, so one thing I'll first of all add to the, the earlier question of like why, why start a growth fund? I think the other, the other reason, the other piece in all of this was that, you know, we, we realized there's a hole in the market. I mean many of our companies, companies we'd invested in an early stage if they were successful would go on to raise growth funds around. But those rounds would get invested in generally from abroad. Yeah. So you know, lots of US investors, some Asian investors, et cetera there. You know, there have been some brilliant long term growth funds in in Europe, but a relatively small pool of them with generally for all the right reasons, focuses on certain kinds of businesses or whatever. And, and we said, well, hang on, this is this is crazy. Like, you know, why, why should a company that's always been based in Europe, that continues to be based here, have to go abroad necessarily for financing? You know, it's great that they can attract that capital, but why not also have it locally? And I think we thought there was a real opportunity for that. And, and I think that still exists actually. I mean, even today, when you look at the numbers, you know, the ecosystem, particularly in the last 10 years has exploded in terms of capital availability. But the majority of the kind of local or domestic capital within Europe still is skewed towards the early stages. So seed Series A, maybe series B, once you get to growth and, and particularly late growth stages, actually most of the capital comes from elsewhere. And so there's still more opportunity in, in my mind in in that world. But then, yeah, going back to your question about what it's like to be a growth investor, in some ways, it's again very similar. In the end, it's finding amazing founders who are building businesses in in very, very large markets. But then there is also a level of rigor and analysis that comes with investing later just because there is more data. And so one of the things we did was, you know, as Bernard mentioned, we we tested the water with this in this whole area with an initial liquidity fund which we built and ran out of our existing team. But then when we decided we were really going to go for it with growth, we said, no, we need to build, you know, a special team that really understands this, this, this market has track record already in this market. And we were really really, you know, we were really lucky to be able to convince Rana Yarid, our partner Rana to join. She'd been a partner of Goldman Sachs for a number of years, had run a very, very successful multi stage investment book there for the, for the firm. She, you know, spent a lot of time in Europe as well as the US and so was a perfect fit for us. And, and she and she's built A-Team around herself as well of, of, you know, growth focused investors. Even though we work as a combined team, we've now injected more people who understand that later stage as well. Understanding Fund Economics and Identifying Returners And when you look at the early stage, you know, when I was looking at I think you've raised 12 funds in total $5 billion. You know, the the range of the size of the early stage, I think the smallest was maybe 300 million. I think that the largest was only 600 million. Do you think there's an optimal size for an early stage fund? Speaker 2 It's. Speaker 3 We're both smiling because it's a constant debate. Oh, really? Speaker 2 Yeah, one would argue that the smaller fund, the the easier it is to generate great performance. The reality is that the we live in a world now where in order to be competitive, you need to be able to put enough money at work early. So a seed can be $10 million or a Series A can be 2025. So the the stakes and the scale of earliest investment has changed. And so we have evolved the fun so that we can do maybe around 25 to 30 transactions in a in a fun and over a three-year period and, and, and based on that, we feel that 600 million is the right size for the firm. Speaker 1 So you're not looking to get any bigger? You think 600 million is a good size for an early stage fund? Speaker 2 Yes, yeah, we don't. We don't want to raise more than that. I think it's a, it's a good size, but getting a lot bigger I think would create a lot of hardship on the on the performance. Speaker 1 And on the 600 million, you think that the the economics still work in terms of, you know, being able to ideally 3X in 10 years. And if so, you know, people talk about a fund returner when you've got a fund of 600 million, are you looking for one fund returner? And if so, is that like a 10 billion outcome and and how different is that to 1520 years ago when you were looking for a fund returner? Speaker 2 You have to have companies that are a lot bigger, a lot bigger because but first of all, it all depends what you mean by a fund returner. If, if it's 1X, then it's 600 million from from from a company. But if you want to do in one company, you want to do 3X. So that one company will need to bring the firm 1.8 billion. Let's assume that we have 10% of that company when we exit, it means that this company needs to be 18 billion in, in valuation then of that many complete. But however we know because we we have studied you know how many companies in a period of three years. So our investment cycle end up becoming you know, 10 billion plus valuation companies, you know, 1012 years later. And that number has constantly grown. You know, 20 years ago there was none, then there was maybe a couple. And now we think that today, if we think of the next three years, they'll probably be maybe 10, 12 companies that 10 years from now will have that scale. Yeah. So if we have our early stage funds and we have 30 shots, then we need to have one, one company every 30 that become an $18 billion business. Key Lessons from Revolut's Phenomenal Success Yeah, of course. And you know, of course you mentioned Revolut. Revolut what? Europe's largest privately held company recently valued at 75 billion. That was it. I think it looked at fund 5 it came out which was like a $300 billion fund. Can you share anything about the metrics of that fund? Because from, you know, I've done some numbers myself, it, it looks like to me it's going to be one of the best performing funds that is, you know, a European fund invested in Europe. Is there anything that you can share about that fund? Speaker 3 I don't think we can share any numbers unfortunately because of the sort of because of the agreements we have with our LP's and everything else. But no, it's, it's obviously a fantastic fund. It's obviously a fantastic fund. And you know, in many ways it's a great example of, you know, like the the way the venture capital model works, when it works interestingly that that fund has a number of other really fantastic businesses in it. But, you know, the power law means that you do find these companies that, you know, are just so phenomenally successful that that on their own they can return a fund, you know, many times. Yeah. Yeah. Speaker 2 I mean, I think you know the, the important point is we, we invest in Revolute that seed and Series A. So we were the first institutional investor in in that company. And it was 12 years ago, you can imagine 12 years ago we invested in a company that had five people. It was, you know, an enormous valuation. So the returns that we we can get on such a company are extraordinary. But thanks to the extraordinary genius of Nick and and Vlad and the entire team. So we've been, we've been great beneficiary of that. So yes, that that fun is once in a lifetime fun because of of that one company for sure. Speaker 1 And is there anything that you've learned from both investing in that company but also following their journey that you're then applying either into other investments or you're giving to other founders as they help, as they hope to replicate that success? Speaker 3 I think, look, I think every company is very different and, and, and successful companies are, you know, wildly different and sort of famously different, right? And this has always been the way if you, if you spend time in Silicon Valley, as Bernard and I have, you know, famously the culture at, I don't know, Meta is totally different to the culture at Google and totally different to the, the, the, the culture at, at, at Microsoft, for example. And yet they are all incredibly successful companies. So I think it's important not to sort of completely copycat things. But I think, you know, some of the things that have worked brilliantly for Revolute are, you know, an obsessive focus on their product that that everything, if the product is the core of everything they do and they think about that all the time. Another key thing that they have is this, this kind of like urgency around the cadence at which they operate. So when they have ideas, they're just not, you know, they're relentless about wanting and, and, you know, wanting to get those ideas into reality as quickly as possible. And it's, and it's in order to then learn from that very, very quickly. And you know, many of their ideas end up not being good ideas, but they learn about that really quickly and then can absorb the learnings and move on. Whereas I think there are a lot of companies where they can have this grand unified theory and expend 3-4 years building towards it. If it doesn't work, then you're really stuck, right? So there's things like that that I think are critical. But most importantly for me, I think the, the, the most important lesson to learn from Revolute, I would say is it shows that you can build global defining, generation defining companies right here in Europe. You know, that's what Nick and Vlad have done. They've built it right here in London. They've got teams everywhere now, of course, but this is their base and and if they can do it, others can too. And I hope that, you know, if that can create the inspiration to another thousand entrepreneurs, that would be the best gift they could give to the ecosystem. Navigating US Expansion and Fundraising Dynamics I. Speaker 1 Think and I think what's what's unusual about Revolute is that now they're focusing heavily on US expansion in a way that they in the way that other companies are told to, to expand to the US very, very early. I think both of you in your entrepreneurial journeys both experience that we sort of you sort of build in Europe, but you sell to the US and of course you know Revolutes a different business. But is that advice that you give to your portfolio founders, is it sort of like building Europe that that scale to the US as soon as you possibly can? Speaker 3 No, I think it, I think that really depends on the company honestly. So you know, I think that's, that's very much traditionally the model for sort of AB2B software business. The reason for that is because, you know, the software market in the US is huge, both state and private. You know, people that a lot of software is just bought in America. American corporations and the American government are just very big buyers of software. So if you are building, you know, a security company or some kind of, you know, know, knowledge management company or a talent software company or a finance software company, then then yes, you're probably going to have the US pretty early in your in your journey. But actually, when you think about particularly some of these regulated businesses, things like financial services, so a Fintech like Revolute, then actually, you know, Europe is a huge market and maybe a better place to start. So it really depends on the business. So we, and again, you know, like we work with our founders, right? So of course we provide, you know, we, we, we, we provide kind of experience from what we've seen elsewhere. But ultimately, most of them have a pretty, you know, meaningful view on on kind of where they want to go and how quickly they want to go somewhere. And so we generally are supporting that rather than trying to sort of change their minds and take them. Speaker 1 Somewhere else, does that make sense? And going back to the funds quickly, so I think Revolute was Fund 5. I wanted to ask 2 questions. How, how instrumental has that company and that fund been? Or how much easier has it made raising future funds when you have that that track, that track record? Speaker 2 You know, it's obviously it, it puts a Halo effect on on Waldreton, but and as you said, I think it's going to be a, a, a once in in a generation fund. But what LP's are looking for is, is consistency as well. Is, is the ability to have like amazing funds, but also to find performance in, in future funds because you know, for someone who is deciding to invest now in fund 9 or the future fund, fund 10 and growth today, our success in the past is just an indicator that we are able to find these the great companies. But we have to perform in, in fund 9 and 10 and 11 like we perform in in fund 5. And that is based on building a way of investing that is very attractive to entrepreneurs. It's it's the platform that we build. It's in order to, to win deals, you have to hustle. So you have to be really in the ecosystem. You have to be leaning forward. And that culture is what I think defines Bulletin. And so Revolute is just a a constant reminder that if we are in it, it's because we hustled, we were there at the very beginning and we made the bet. And we need to have that same spirit for the next 20 years. Balderton's Strategy for Winning and Learning from Misses Yes, I guess I'd never, never stay complacent. I never get complacent. And when I look at the portfolio from from the early days from contentful Depop talons go cardless due to the revolutes and even more recently wave Cleo, you are you've won in the earliest stages some really amazing deals. How, how is Bulletin or how are the partners able to kind of get access and and fight their case and win those deals, which I imagine we're not always easy to win? Speaker 3 So interesting. So I think there's two things, finding them and winning them. So finding them is about just being honest about what the job really is. I think it's easy when you're successful as a firm to sort of sit back on your laurels a little bit and, you know, expect that great founders will come to you, you know, maybe build a huge team of people who can help source for you. And, you know, you can sit back in your nice office and sort of have emails sent to you. And the reality is that doesn't work in venture. It's just not that kind of business. Maybe you can do that in the public markets because every trade is a click away. But in our world, actually, you kind of have to be, as I mentioned earlier, on the street. You have to have coffee with, you know, random angels and founders out there because that's where they are when they start and it's not clear at all. So that's the first thing. You've got to stay very engaged into the ecosystem itself. And between us as a partnership, I mean, of course, we have an amazing team of associates and principals who help us with this, but we are all constantly out there, you know, just meeting people and understanding what's happening and getting a sense who, you know, who's building what and why they're building it and so on. So that's the finding it. And you just have to keep doing that. You can't stop doing that. You know, our, our, our partner Daniel, who actually led the investment into Revolute, for example, was just spent the last two Sundays in a row in Berlin. He, you know, he lives in the UK, but he flew there two Sundays in a row to spend the whole day there because he's pursuing a, a, an entrepreneur that he really, really wants to invest in. The first Sunday was all about, you know, discover the company wants to really understand it and meet the whole team. The second Sunday was having convinced himself he's out there, you know, winning, winning the investment. And so that doesn't go away and you can't stop doing that. The, the, the, the second piece of it is, is like you say, winning, winning those investments once you've found them. And, and that really is all about our ability to sort of a bit like Bernard and I have done today, explain to founders how we're going to be there for them for the journey and how it's much more than just a check. Interestingly, some of the best investments we've made have not been that competitive when we made those investments. When you invest as early as we do, you know, it's the reality is some of the best companies or the things that end up being the biggest companies can be quite contrarian at the time and they may not be you. You listed a whole bunch of them there. Some of those were very competitive and we had to fight to win. Some of those no one else was going to invest anyway. And so, you know, that's the, that's the dream, I guess, but it doesn't always happen. Speaker 1 And are there any companies where, I mean, I'm sure there are, but I guess what, what are the biggest companies where you either didn't win and they end up being huge or you had the opportunity to invest, but you didn't and and it was a mistake. Speaker 3 Well, the one that Spotify has to be the one that we have to mention like, you know, so I think the firm looked at Spotify maybe twice in the very early stages and you know, we blew it. I mean, you know, that's an amazing company. You know, Europe's first, oh, sorry, 2nd $100 billion tech company after SAP and I think still has a way to go, you know, incredible founder who's still there and still very engaged. And it's, I mean, as a European, I'm really proud of that company, right? I mean, it, it defines that sector, that industry completely. All the big tech companies around it just copy it and we should have invested in that one. Speaker 2 We made, we made a number of mistakes. We, we have a big anti portfolio like like every firm if if you take it all the great European champions who would build enormous amounts of value. The reality is that we saw most of these companies and so the ones that we have not invested in, they were all mistaken. We had the IT didn't mean that we necessarily would have won if we had put the the bid in or or and some of them we have lost against a competitor. So yeah, I think we know it's it's part of the of the game and and and venture that you're going to make a number of bets, you're going to miss a number. And that's why we also feel like, OK, if we missed it in early, maybe we can get it a bit a bit a bit later. But we're very humble vis A vis this and and our ability to pick the the best companies. The Evolving European Ecosystem and Public Market Challenges Got it. And yeah, you've been in the ecosystem now. Bordson's been in the ecosystem for 25 years. Before you both became VCs, you were both builders rooted in in Europe. Both as your experience in VCs and as kind of builders and entrepreneurs, what have you seen change across the European ecosystem? Speaker 2 I mean, to me, it's being an entrepreneur is now something that lots and lots of young people want to be. It's, it's viewed as as a fantastic way to change the world, as a fantastic way to create wealth, not just individual wealth, but economic wealth for, for Europe. It's recognized not only by these entrepreneurs, but by many other stakeholders, the governments, all, all the ecosystem around. So we have now a full ecosystem with with all the the ingredients of the participants to create these these amazing companies. So when Saronga started this company or when I started Business object in in 1990, they were very, very few. We were the first ever European company to go public on NASDAQ in in 94. This today is is an ambition of many, many hundreds of entrepreneurs here. So it's a bigger system, it's more competitive, but I think there's a recognition that the engine of growth of Europe is technology, and technology has been created in startups. So we have the chance to be at the heart of it. Speaker 1 I I want to touch on the public markets. You mentioned taking business objects public in the US and you took Blinks public as well. How are you thinking about the public markets? There's a lot of conversations or noise about the lack of capital markets, the lack of an X opportunity, the IPO for, for companies here in Europe. Is that something that you take a view on with your portfolio companies? Are you saying to them, look, you know, the capital markets are not opening up in the UK and Europe, but they are in the US, You need to be thinking about that opportunity or I, I guess like is that a role that you play and, and how are you thinking about it across the ecosystem or broadly? Speaker 2 Yeah. I mean, I think we have to take a pragmatic approach. The pragmatic approach is that we for a company in our portfolio will direct them towards the market that enables them to fulfill their ambition and and value them at the at the right level. The stock market in Europe are not quite where they should be compared to the US. the US has developed over decades, but I think there is there's something that has now existed in the US for for a very long time that still needs to be developed. Is it traditional investors know that they have to invest in technology, they have to invest in, in, in venture farm. They have they, they understand that it's needs to be part of their portfolio. So it's not, it's a given. It's more, it's not like if it's more like how much and, and so we have way more firms in the US, financial firms that will put a number of or amount of their money into tech companies in, in the stock market or in tech companies in the private market. And then it's fuelled this whole thing for, for a very long time. And obviously it paid handsomely because you look at the top market caps in the world, they're all tech companies and it's not the case yet in in Europe. So we have to get on and, and all the ecosystem needs to, to work. The one piece that to me is still a bit missing is, is the appetite of the large institutional European investors to put a larger part of their assets into technology, whether it's private or public and do it in a long term fashion. So be a long term investor who are going to be at the side of these great companies when they grow from, you know, 100 million of of revenue all the way to several billion dollars of revenue. And once we have that, that will fuel the the public markets in in Europe. Building the European Tech Flywheel and Retaining Value One of your portfolio founders, Barney, was talking over the weekend about how, you know, Europe is now building these amazing tech giants, but we're losing them to the US. And because, you know, that late stage or that the institutional capital isn't there, a lot of the upside is being captured. And a lot of European giants end up moving to the US and they get investment from the US and they've become almost U.S. companies. Do you think that that's damaging to the European ecosystem? Speaker 3 So I think Bonnie and I have discussed this many times and I think I think losing is a slightly emotive way of framing it. The reality is there are like many different ways in which a company impacts the ecosystem it grows up in and and you can lose some elements, but still benefit a lot. So, you know, from a jobs perspective, even if a company goes public, you know, a good example, you know, portfolio company of ours, Dark trace, they went public in the UK. But even if they'd gone public on NASDAQ, the, the, the team, vast majority of the jobs and so on stayed in the UK. And, and particularly on the R&D side, which now, you know, now that the company's exited even further to a private equity firm, it's created a situation where a number of the people who are in the R&D team are off, you know, building their own businesses. We've seen a number of sort of spin outs and so on. So, so, you know, you could argue that it's been lost because it's been acquired by a sort of primarily US private equity firm, But actually, I would argue that a lot of the value is still being captured and kept here. But it's true that, you know, in the long run, it will be great for Europe to be able to do everything from host to company in the ecosystem, let it grow there, have the right talent to be based there, and yet also, you know, raise all of its capital from there. And in the end, maybe go public there and stay, stay in. And, and some of our companies have done that right. We've had multiple companies who have listed in in European on on European stock exchanges and had a great run as a result of it. We could do with more of it, but I think, you know, we, we just need to keep working at that. And I think this sort of vocabulary of like it's a, it's a binary thing of losing it or not. It's not. It's not actually necessarily very accurate. Speaker 2 Yeah. I think the mentality is changing by the way. And we're seeing more and more companies that have determined that they will keep the headquarters here because the talent is, is great because they can develop all the way from from Europe. And that has been a change. I think what's happening also on in the US with visas and the overall political situation is making Europeans want to be staying here and building strength from here, as well as the need of of Europe to build sovereignty in many, many sectors. And in particular it's AI infrastructure. All these are are elements that will continue to drive the growth of the European company from from the European soil and. Speaker 1 So do you think it's just, it's just time, you think it given enough time, we will develop the ecosystem that we will be able to have our European companies list here. And I guess to your point, it doesn't ultimately you don't think it matters too much, You think it's OK the way that it is and we capture most of the value here. Speaker 2 I think the most important is, is that a lot of the core forces of the companies stay here because you build an ecosystem when the people who, you know, leave these companies to create their own business, do it here and and then you reinvest. So the so the value that you've created gets reinvested in the same place. That's how Silicon Valley got started and and developed so much is that it's constant reinjection and and the system that feeds on itself. We need to have this here and I thank we're we're starting seeing a lot of it. We did here the 10 years of Revolute just a couple weeks ago and we had 30 plus entrepreneurs who are Revolute alumni here. And so this this value is getting created and recreated over time now. Navigating the AI Boom and Adapting VC Strategy Yeah, that's amazing. Yes, the flywheel, they call it, right? You know, you need these Unicorn factories to churn out more and more founders. I also wanted to kind of ask one final question on the ecosystem as a whole. You've both been building, investing for, you know, decades now gone through. You know, Bolton was born just off the back of the.com bubble crash. We saw the 2008 financial crisis. We saw sort of like the 2001 bubble. We're now in a sort of AI hype world. Are we in a bubble? Speaker 3 I thought we were going to get through this without the bubble question, but I guess I was wrong. Yeah. Yeah. It's really hard to tell because, you know, no one knows in these situations. I think you know my view on this. So, you know, I have AI, studied computer science at university. I specialized in what you would now call AI. In my final year, I worked for an AI, you know, an iconic AI company when I first came out of college. And then my own company had AI, the hardware. So I feel like I've been thinking about AI for a long time. And what I can say like from a very technical perspective almost is that the potential for this latest generation of AI, particularly built on top of, you know, the transformer architecture is, is tremendous. It's a tremendous opportunity. It allows you to solve a class of problems that computers couldn't really touch properly before, and suddenly they can. We, you know, I think even now it's far too early to tell exactly which applications of solutions to those problems are going to be the most profitable ones. And even harder to tell which business model is the right way to exploit them and where the value will land like down some foundational layer somewhere in between or maybe just in the customer. And so it's really difficult to to to, to, to sort of answer some of those questions. And I think the uncertainty of those things is what, you know, may cause wobbles in this boom that we're seeing because, you know, there'll be times where people will say, oh, I thought the value was here in this Lispers model, but it turns out that didn't work. That means the whole of AI doesn't work, you know, and, and, and, and markets to markets. They will generally overreact in both directions in that sort of situation. But it doesn't worry me because I think, like I say, that fundamental underlying driver here is, is tremendous. I mean, it's a scale of change that is, in my opinion, you know, bigger than the mobile shift, I think more akin to the cloud shift in that it's infrastructural and it will be fundamental to everything and how it's done. And it opens up, like I say, this whole new Vista of what a machine can do that we didn't think it could do before. So, yeah, long run, I think this will be fine. Of course, we'll have wobbles in between. Speaker 1 But you think the the upside will be will be big enough that I guess it's OK where we're at today? Speaker 3 Yeah, I think the hardest bit today is no is, is, is, is predicting where the outside's going to be and and which companies will really matter in 10 years time, which is by the way the same as with the.com boom, right. I mean, you know, in duringthe.com 99 two thousand there were all these investments and you know, some of those investments turned out to be the best investments. You know, some of those companies, Google, Amazon, etcetera, that that were in that period, which you know, you could have easily ignored in the.com crash and said they weren't interesting, actually have gone on to be, you know, multi trillion dollar companies 2020 years later. And I think there will absolutely be a whole bunch of those again in 20 years time or I think possibly sooner in this case. But knowing which one, that's the game. Speaker 1 But but I guess that doesn't, it doesn't change your job at all, right? You still have to find, pick and win the winners irrespective of the market dynamics. Yeah, yeah. Speaker 2 Yeah, I know. Absolutely. I think the just the scale has changed almost by a factor of 10. You have to invest more money to begin with because of the competition. Even if what you invest in is still an idea, you may have to pay a lot more, but the price at the end is a lot more as well. So the upside continues to be amazing, but you the risk is is is bigger for sure. But what we see is that the the speed at which a company can reach hundreds of millions of of revenue now it can be achieved in less than a couple years. And therefore the the attainment of value is is a lot faster and. Speaker 1 Do you have to react as a firm quickly, you know, prices are going up, Browns are getting bigger? Are you adjusting your like ticket sizes, the number of investments that you're making or are you trying to stay, I don't know, disciplined or consistent across the tickets that you write into certain valuations? Speaker 2 We have to adapt. We have to be really agile. We have the chance to have great investors who have given us their trust. And so we have even in early stage as we discussed just 600 million is a lot of money that they haven't trusted us with. And so we can adapt it to do more deals smaller or less deals bigger and, and so we have a lot of agility and flexibility, but we have we want to participate into this incredible revolution. And for that, we have everything that we need in terms of the scale of financial resources. Balderton's European Focus and Future as a Top Firm Amazing. We've only got a few minutes left. I want to talk about you've done 25 years, the future of Bullderton. One of the specific questions I wanted to ask was, you know, I mentioned Index Excel, you know, we've seen Index become the European VC that have gone to the US and they've opened offices in New York and San Francisco. Would you ever see AUS expansion in Bulletin's future? Speaker 2 Well, this is something that we have debated a lot. We have chosen not to do so to be truly a pure investor in, in an asset class which we feel this is growing extraordinarily well. I think it's served us really well because when an entrepreneur talks to us, they know exactly who we are and they know the value that we can provide. They know that we're going to be close to them. We're in their corner with the really strong understanding of what it takes for an entrepreneur in Europe to succeed on a global basis. That's our specialty. And we have helped dozens of companies in a do this and in a go, you know, across the pond and, and becoming successful there. So at this stage, we're very happy because that the purity of our business model has enabled us to really take advantage of this, this incredible growth that we've seen in the European ecosystem. We'll see if we want to do things differently in the future, but for now we're really focused. Speaker 1 Staying in Europe, amazing and final question, what does Bulletin need to do to make sure that it is still one of the top firms in Europe in 25 years time? Speaker 2 We need to need to be a good good pickers. I think we need to also first and foremost, I think be at the service of our founders, provide them with the things that they really want, understand that we we can help them, but they're the ones who deserve the credit. And I think if we, if we stay the most attractive place for an investor to find, for an entrepreneur to find money, then we'll be very successful. Because again, entrepreneurs, the best entrepreneurs in Europe have the choice. They will pick us. So we need to be the most compelling investor for them at the end of the day. Speaker 1 Amazing. Well, look, thank you both so much for your time. It's been a pleasure and congratulations on a on an amazing 25 years. Speaker 3 Thanks so much.