What was your professional background before joining Playfair Capital?
My background is in pharmacology; the dream was to become a scientist until I realised that I wanted to be working and collaborating with other people, rather than being in a siloed lab all day. Instead, I joined PwC’s Restructuring department and became an ACA.
Here, I spent a lot of time understanding how things can go wrong in big businesses; how senior executives can make poor decisions, or how poor leadership can impact business processes further down the chain that ultimately can lead to profit warnings and even insolvency.
After working on a number of large insolvencies such as Carillion and Lehman Brothers, I decided to jump into the innovation team, working with startups focused on growth. I led one of the corporate accelerators and really enjoyed working with startups. I decided continue my journey at Playfair Capital nine months ago.
How have you coped with working remotely during the pandemic?
I’m very routine driven. Every morning before work, I go for an hour-long walk and that really helps almost replicate the commute. During this time, I love listening to podcasts to help switch my brain on – I like Tim Ferriss, This Week in Startups and The Pomp Podcast. It’s a really nice way to start the day.
At Playfair, we have stand up meetings at 9am every morning. I think that’s been a really good way of recreating that morning interaction you get with your team in an office environment. Throughout the day, it’s also important for me to make sure I’m taking breaks when I can.
What industries is Playfair Capital working within at the moment?
We’re totally sector agnostic at Playfair but, because of my background, I have a really keen interest within healthtech.
I’m also super interested in ‘unsexy industries’. Anything within shipping, manufacturing, logistics, supply chain can be really exciting, particularly where the founder has identified a niche pain point or space that we’ve heard a lot about previously.
We like anything that we feel is in a market that isn’t overcrowded, and particularly where the founder has domain or startup experience that gives them a competitive edge.
I also look at consumer deal flow. Right now, we’ve been seeing a huge amount of recipe boxes or meal kits and a lot of health and wellbeing, particularly for employee benefits. I’d say the majority of the VC ecosystem generally has a B2B focus, so it can be quite exciting to look at some of the more consumer deal flow which can overtimes get overlooked.
What do you look for in a founder?
The number one thing is chemistry, both between the cofounders themselves and their chemistry with us. Ultimately, we will be working together the next five to 10 years, so it’s really important for us to make sure that we want the same things – for example, that we have a similar idea of what an exit might look like or what building a high growth team looks like, and that we feel like we can effectively work together to get to the outcome.
Whenever a founder has similar experience of running or building a startup, that is always really attractive. They can lean back on a lot of that experience.
Can you talk a little bit about your current portfolio you’re working on?
We’ve recently had three portfolio companies raise their series A, all of which we have participated in. Omnipresent recently raised $15.8M for its platform to employ remote workers globally, and Orca AI, a computer vision startup that can be retrofitted to cargo ships and improve navigation and collision avoidance, has raised $13M.
There are also two or three of our additional portfolio companies getting to that point where they are gearing up for their Series A fundraise. We tend to be really involved in helping them make connections with the right Series A funds that might be able to lead their round, and just generally help them prepare all of the materials for their financial models, their deck, and ensure they feel as prepared as possible before they launch that round.
Do you have a favourite industry that you like to work with?
I probably don’t – our deal flow is so varied because we’re so early. I think when you get a little bit later, it’s easier to be able to funnel in the type of companies you get coming to you, but because we’re really the first stage, we get anything and everything. I might go from looking at an ethics AI or cybersecurity to exploring a Gen Z consumer ecommerce startup; the variety and diversity of work is what keeps it interesting!
You mentioned startups launching recipe boxes and businesses keen to deploy employee perks. Have you seen any trends or technologies that you expect to be huge in the coming years?
It goes without saying anything related to events and conferences is definitely something that’s huge. It started with Hopin, and then Grip is another one that recently raised their Series A – we also used them to host our Female Founder Office Hours event. It’ll be interesting to see how they stay relevant beyond the pandemic.
We see regulatory changes driving a lot of trends at the early stage such as the EU ESG disclosure rules, but I couldn’t predict which will have enough of an impact to really disrupt their respective space.
What advice would you give to founders emerging during the pandemic? How can they build relationships with companies like Playfair Capital?
Plan and prepare around your cash burn and your cash runway, which is the most important thing. Definitely give yourself a bit of cushion during times like this. If you’re struggling to get to the next fundraise, consider a bridge round or debt funding.
Capitalise opportunities as opposed to focusing on what you’ve lost. Edtech is a perfect example of an emerging trend within the COVID era and being able to capitalise on consumer behaviour and consumer trends. Then, as a result, business decisions and the change in business decisions off the back of it is to your benefit.
A couple of examples of how you could do that is to, first, be able to focus on a new industry, so perhaps an industry that previously wasn’t struggling or didn’t previously have a need or a pain point.
The second would be to consider your business model and get creative with it. For example, if it’s not a case of cash up front as it previously was or locking your client into three-year terms, consider how you can be more flexible – move them on to a payment plan or perhaps shorter contract terms.
Ultimately, if you can build that customer loyalty and help them get through COVID, that is more valuable than just being able to stick to the way that you’ve always done things.
The third thing is marketing. Consider how everything is completely digital, how you’re going to stand out in the digital space, and the cost that is associated with that. Hiring is key, too – with remote hiring, it means that you suddenly have access to a far wider pool of talent. All of these elements are opportunities to capitalise on.
There’s a huge amount of dry powder in the market and VCs are still investing. I wouldn’t let COVID stop a founder from getting in touch with a VC. All I would say is, perhaps, get in touch a little bit earlier than you otherwise would, because VCs might be focused on portfolio companies as more companies might be coming to them for bridge funding. There is just a lot more volume.
In order to start building that relationship early, I would suggest having virtual chats over coffee with investors on a regular basis rather than having an official opening for your round post-COVID.
Jeevan Sunner is associate at Playfair Capital.