insights and updates on lakestar briefing

I S S U E T E N D E C E M B E R 2 0 2 0

B R I E F I N GI N S I G H T S A N D U P D A T E S O N L A K E S T A R

H E L I C O P T E R V I E W

H I S T O R Y L E S S O N S

P R O F I L E S

Klaus Hommels, Lakestar’s Founder and Chairman, shares his vision of how Europe can become digitally independent and stamp its values, ideas and input on to the technologies that are shaping modern life throughout the world. He also discusses the impact that Covid 19 is having on Europe’s ecosystem and which business models are emerging as the most resilient. Page 6

‘I am an historian who is inter-ested in the present and the future. This year has been exciting for me because it’s not often that an event of the magnitude of the Covid 19 pandemic comes along and gives historians a chance to put their knowledge to use.’

Niall Ferguson identifies six main themes for investors and asset managers to consider when assessing the impact of Covid 19 on the world. 3

Glovo’s CEO and co-founder, Oscar Pierre, describes the highs and lows of the journey that the ‘anything, anytime’ app has taken around the world and where it aiming to go next. Page 20

Oscar is redefining one of the most complex healthcare insur-ance markets in the world – the US – and adding on new business lines. It’s all about customer engagement, says co-founder Mario Schlosser. Page 23

WelcomeThe format of our AGM this year embraced our investors and stakeholders all over the world despite Covid-19 restrictions. Nevertheless, some of you were able to turn up in person and at the same time many more investors could view our AGM on livestream for the first time. The online format also allowed you to post questions to our speakers, enlivening the discussions around our achievements and goals. On the following pages we report our speakers’ contributions so you can, at your leisure, study where we have been, where we are now and where we want to be.

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No two years at Lakestar are the same so our shift this year to a virtual AGM should not have come as a surprise. Of course, we were forced to adapt due to restrictions caused by the Covid pandemic, but the ease with which we were able to do so – and the enthusiasm of those who ‘attended’ – are testament to the strength of our resilience, adaptability and to you all in our wide community.

The AGM also gave us a chance to communicate an optimistic outlook. Not only should you see Lakestar’s figures as encouraging, but the founders who contributed were not allowing the pandemic to derail their ambitions.

Covid has thrown up many challenges for founders and investors, but it is already clear that winners will emerge from the shake-up in the ecosystem. We are pleased that so many of our investments are using this opportunity to refine and distinguish their business models while we wait with excited anticipation for the companies that even now are forming from the germ of an idea hatched during the pandemic. All these companies will have resilience hard-baked into them and will be essential to realise our vision of the European technology sector changing the world for the better.

The Lakestar Team

E D I T O R Ninja Struye de Swielande

D E S I G N A N D E D I T O R I A L C O N S U LTA N C Y

Forth Studio

W R I T E R Elizabeth Robinson

P H O T O G R A P H Y Alexander Sauer

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please contact us at [email protected]

N I N J A S T R U Y E D E S W I E L A N D E

C H I E F C O M M U N I C A T I O N O F F I C E R

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30

20

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Update on our ecosystem

Dr. Klaus Hommels

Update on Lakestar

Mika Salmi

Oscar Health Defining the future

of healthcare insurance in the US, accelerated by Covid

Oliver HeimesMario Schlosser

Scoutbee The one-stop-shop tool

for supplier management

Mathias HanielGregor Stühler

Glovo Anything, anytime.

immediately.

Stephen NundyOscar Pierre

sennderBuilding Europe’s largest

network of trucks

Christoph SchuhDavid Nothacker

Lessons from history – Covid in a macroeconomic context, boosting the next

wave of innovation

Niall Ferguson

T H O U G H T L E A D E R S H I P

L A K E S TA R U P D AT E

P O R T F O L I O C O M PA N I E S

C O N T E N T S

‘In every crisis lies

an opportunity’

L A K E S TA R B R I E F I N G I S S U E T E N D E C E M B E R 2 0 2 0

The technologies that shape almost all of modern

life are built and run without European values,

ideas or input.

This dependency has serious

financial, political and cultural

implications for Europe.

Lakestar exists to challenge this dependency.

To find, fund and grow the European technology

companies capable of reshaping our modern life.

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Lakestar’s Founder and Chairman urges Europe to seize the chance to secure the technologies that

will make it digitally independent

K L A U S H O M M E L S

F O U N D E R A N D C H A I R M A N

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L A K E S T A R A G M 2 0 2 0 U P D A T E O N O U R E C O S Y S T E M

L A K E S TA R B R I E F I N G

I was pretty annoyed when Covid came along. But that annoyance stimulated some powerful thinking.

It occurred to me that Covid was exposing European dependencies and that we need to remain independent from the technologies that define our lives today. Just as previous generations of Europeans fought for their freedom, and lost many lives in the process, we must not accept technological freedom being taken from us.

The stakes are high. We all know how aggressive and dominant the FANGs are. They control everything from semiconductors, CM and HR systems and data storage. Technologies that shape all modern life are being run without European values, ideas or input. Being digitally-dependent has serious financial, political and cultural implications for Europe.

All this caused me to think about our mission. We need a purpose that unites us. That in itself is moti-vating: people who fight for a common cause close to their hearts bring conviction and the desire to create something better for all of us here in Europe.

We need to finance the companies that will make us digitally autonomous. That means redefining the role of the VC to secure the technology that defines our daily lives and gives us digital sovereignty.

Lakestar exists to challenge Europe’s dependencies. We want to find, fund and grow the European technol-ogy companies that are capable of reshaping our modern life. To help us, we approached a branding agency to put our vision into words so we could com-municate our purpose.

So how do we put this vision and this mission into action?

Well, we have already started. We have gathered a lot of ammunition: we have strengthened our board and we have nurtured our links to the regulatory environment that will protect and enhance what we want to do. We have also defined clear areas that would have mission-critical infrastructures built in the next few years so that we can focus on those. For example, in fintech the Chinese have developed a QR code that supplants credit cards. This is a mission-critical infrastructure where Europe needs to have independence but because the conse-quences are so complex we at Lakestar try to explain the necessities of regulation and investment to politicians.

As well as having a role in anticipating and explaining such advances, we want to help build this infrastructure ourselves so that Europe can not only have an economic advantage but it can also secure its digital sovereignty.

U P D A T E O N O U R E C O S Y S T E M

Lakestar evolution from sector agnostic, comingled fund to thesis driven sourcing with dedicated stage focus

CO-MINGLED

CO-MINGLED

EUR135mSector-agnostic

EUR350mSector-agnostic

EUR678mThesis-focused

?Thesis-focused

1. G E N E R AT I O N T H E B E G I N N I N G S

2. G E N E R AT I O N P R O O F O F C O N C E P T

3. G E N E R AT I O N T H E S I S A N D

S TA G E F O C U S

2 0 2 1 + D O U B L E D O W N

GROWTH

EARLY

SEED

GROWTH

EARLY

SEED

ANGEL

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L A K E S T A R A G M 2 0 2 0 U P D A T E O N O U R E C O S Y S T E M

On a broad scale, Covid has revealed the most resilient business models: the typical winners appear to be those that are asset-light and primarily equity-financed. They are the companies with scalable digital customer acquisi-tion models and are cashflow positive with high product gross margins and a nice product pipeline. Some exam-ples of these in our portfolio include Harry’s, HomeToGo, Oscar, Marley Spoon, Auterion and Opendoor. With Harry’s, we thought we had a setback when the sale we had agreed was derailed by the US regulator but, as the Dalai Lama says, sometimes it’s good when you don’t get what you want. Thanks to Covid, Harry’s has grown far more than we could have anticipated. Likewise, with HomeToGo and Marley Spoon.

SOME SECTORS HAVE CLEARLY PROFITED

FROM COVID WHILE OTHERS, SUCH AS ADVERTISING

AND TRAVEL, HAVE SUFFERED.

Another development that will impact our landscape is the rise of Special Purpose Acquisition Companies (SPACs). The purchase of Opendoor by a SPAC will have a positive impact on the fund. We have a special team looking into SPACs because these have many implicit advantages for portfolio companies in managing the ecosystem here in Europe. In the US, some 42 per cent of the IPO market is in SPACs and if it dominates to such an extent in the US, we may need this kind of instrument in our capital markets here.

‘Another development that will impact our landscape is the rise of Special Purpose Acquisition Companies (SPACs). The purchase of Opendoor by a SPAC will have a positive impact on the fund.’

Special Purpose Acquisition Companies (SPACs) have become a substantial part of the IPO market in 2020

We have seen a tremendous dynamic in the tech sector unfolding with the Covid-19 pandemic

58%Non-SPAC IPOs

42%31 SPACs

V O L U M E O F S PAC T R A N S AC T I O N S U S D B I L L I O N

3,53,8

20162015 2017 2018 2019 2020

9,7 10,713,6

36,2

S PAC S H A R E I N 2 0 2 0 I P O M A R K E T

58%Non-SPAC IPOs

EducationB2B SaaS

Marketplaces

eCommerce

Food & DeliveryEntertainment

Social / Digital Media

Gaming

FintechOnline Classifieds

InsurtechHealth Tech

Mobility

-25% 0% 25% 50% 75% 100% 125% 150%

Travel

Advertising

2 0 2 0 S H A R E P R I C E C H A N G E O F P U B L I C T E C H C O M PA N I E SS E P T 3 1 v s . J A N 1 2 0 2 0

Source: Calculated index of representative public companies of each sector

As of Sept 2020, Source: Crunchbase


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L A K E S T A R A G M 2 0 2 0 U P D A T E O N L A K E S T A R

Mika Salmi, Lakestar’s recently appointed managing partner, outlines how Covid has intensified the firm’s vision of its place in Europe

M I K A S A L M I

M A N A G I N G PA R T N E R

U P D A T E O N L A K E S TA R Key updates since last year’s AGM

7‚000+S I G N A L S

18N E W I N V E S T M E N T S

25F O L L O W - O N R O U N D S

People hearing me talk might assume from my accent and language that I am American through and through. True, I lived in Silicon Valley on and off for 20 years and also spent some time in New York, but in reality I speak exactly the same language as Klaus Hommels, Lakestar’s founder: we both speak European.

It’s the vision that Lakestar has of its place in Europe that resonates with me and acts as a guiding star. It comes through in everything we do and recent events have intensified our efforts. Today, we are more unified as a team, we focus better on what we know to do best and we are finding new ways to access the best deals.

Covid has made us more efficient: we have become good at using tools and have made investments without actually meeting founders in person. Since last year we’ve seen more than 7,000 companies, made 18 investments, conducted 25 follow-on rounds. And we’ve done all that with a relatively small number of staff – we’re not one of those players with a team of people out there combing the books. Tools such as Signals Analytics help alert us to the companies that appear in outlets such as Crunchbase, LinkedIn, Pitchbook and newspaper articles.

‘Founders and entrepreneurs today want more than just money – they want experts who

can really contribute to their companies’

Signals + our network = efficient team focus

S I G N A L S

7000+S C R E E N E D

2500+D E E P D I V E

200+

Business modelsreviewed

Quantitative and qualitative reviews

Companies of interest

Investment proposalsconsidered

Investments made

C O N S I D E R E D

30+ INVESTED

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T H O U G H T L E A D E R S H I P

I am an historian who is unusually interested in the present and the future as well as the past. This year has been exciting for me because it’s not often that an event of the magnitude of the Covid-19 pandemic comes along and gives historians a chance to put their knowl-edge to use. Most people have no experience of a pandemic of this scale so we’ve been working with Lakestar in a very creative way to think about how the world has changed.

Larry Summers, the former president of Harvard, recently published a paper co-authored with David Cutler about the economic shock that the world has experienced.

Their findings are striking – they estimate the impact of Covid-19 is going to cost the US USD16 trillion – that’s 90 per cent of US GDP and twice the cost of all the wars the US has fought since 2001. If we scale that across the rest of the world we can understand the size of shock we are experiencing.

And this pandemic is not over yet. Even if an effective vaccine is produced by the end of the year, as now seems certain, it’s going to take a while to be dis-tributed and accepted by the population. Cutler and Summers estimate that the total death toll in the US could reach 625,000, roughly three times the total so far. So it’s reasonable to assume that we’re going to be

Information flow is equally important within our firm. Thanks to Covid, electronic tools have made us closer as a team and we communicate constantly. It has given us an opportunity to be better organised and act smart. We now have meetings twice a week to make sure that Lakestar is operating as smoothly as possible.

Teamwork is at the heart of what we do: on every deal we work as a team, across boundaries and across the company. In the past, Lakestar was very geo-focused, thinking geo first, sector second. We have now reshaped that thinking. Today we try to figure out the areas that we believe are important and where we have expertise. We do our research and pitch it to the other partners to challenge and refine our choices. We still look at geos, because geos give us the ground cover and allow us to unearth things but we will then consult a partner who is the sector expert. By this method we can get into deals in areas where we feel we have the knowing edge.

We don’t want Lakestar to be viewed simply as a good investor. Founders and entrepreneurs today want more than just money – they want experts who can really contribute to their companies. It’s very hard to contribute to a company if you’re not an expert or you don’t have knowledge in a field.

This dedication to expertise gives Lakestar a real personality: people know what we mean and what we represent. This is still a new process for us – we’re only

6–9 months into it – but after a few years it will take on enormous significance. It will give us a reputation and companies will come to us – because we can help them with our expertise and give them value.

We are also looking to attract entrepreneurs at different points in their journey. In the next few weeks we’re launching a small angel fund, working with 10 European angels. They will help us find new companies that have been created or somehow advantaged by Covid. While it’s undoubtedly a unique and challenging time to start a company right now, the people who do have incredible resilience and drive, and incredible ideas as well. We also see some value in doing seed deals. We generally like to follow other investors and partner with them to minimise the painful work. But we feel that in some cases if we don’t get our foot in the door early with a company it will be harder for us to participate in later deals. Both of these categories are very small for us in terms of capital deployed but, done right, they allow us to be early in a company and ride it all the way up through every stage: angel, seed, early and growth, etc.

So we’ve been busy, despite Covid, and have embarked on some important and exciting develop-ments. Through our team, our capital, our expertise and our approach we really are bringing value to the European ecosystem.

The historian and advisor to Lakestar identifies six main themes for investors and asset managers to consider

when assessing the impact of Covid 19 on the world

N I A L L F E R G U S O N

H I S T O R Y P R O F E S S O R & W R I T E R

L A K E S TA R A D V I S O R

Lessons from history – Covid in a macroeconomic context, boosting

the next wave of innovation

L A K E S T A R A G M 2 0 2 0


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living with this virus well through next year and beyond. In fact, the first history book on the pandemic – Apollo’s Arrow by Nicholas Christakis – is about to be published [Oct 27 in US] before the pandemic itself is even over.

I have identified five or six themes arising from the pandemic that we should consider if we want to understand the likely impact on the economy, technol-ogy and politics and relate it to the kind of work that Lakestar does.

The first is that events that kill a lot of people, such as war, are important, not just because of the body count but also because of their long-term impacts on human activity.

If you compare the deaths in the Covid-19 pan-demic with previous pandemics – for example the 1918/19 influenza or the 1957/58 influenza – the cur-rent one is not even in the top 20. In those influenza pandemics the second waves were as big as or larger than the first wave, whereas what we see now across the world is, so far, closer to a second ripple. The earlier influenza pandemics had high infection mortality rates and they killed the very young as well as the very old. For example, in the 1918/19 influenza pandemic many people in the prime of life died, whereas Covid-19 is mostly killing those over the age of retirement, people who have left the workforce. That’s a big difference in terms of the lost quality-adjusted life years and is the reason why I believe the Covid-19 pandemic is not going to be as costly as earlier ones. There’s a danger that if we don’t take account of the ageist character of the virus we exaggerate its impact.

The second point is that the magnitude of the eco-nomic shock is out of proportion to the magnitude of the pandemic. Covid-19 probably ranks about 25th in terms of its impact on the global population. It’s even smaller than the 1957/58 pandemic (which nobody remembers).

So why is the economic impact so great? The answer is clear – governments that misunderstood the situation in the early months of this year resorted to the very blunt instrument of lockdown to try to contain the spread. Lockdowns are an indiscriminate form of house arrest for much of the population, circumscribing their working lives as well as their social lives. There’s no precedent for lockdowns: no government used them in 1957/58 and schools weren’t even closed in the US, despite the virus spreading among teenagers and killing a significant number of them.

Lockdowns explain a lot about the scale of the shock – governments used them as a last resort after bungling their previous strategy. We know what the appropriate strategy was because Taiwan adopted it, as did South Korea – testing and contact tracing followed by isola-tion for the infected.

Future historians will have to figure out why west-ern countries were unable to do that in a competent way. In particular, the US was, on paper, pretty well prepared for a pandemic but it blew testing and has failed to get contact tracing right.

Research by the Blavatnik School of Government in Oxford on the effect of government stringency names Taiwan as best in class, being the least stringent but most successful at managing Covid. Argentina had the highest government stringency with a lockdown that lasted for months. That has been a complete failure because Argentina is having to ease the economic lock-down just as the disease is beginning to spread throughout the country.

European countries are in the middle of the strin-gency range. Within Europe, Sweden was the least stringent while the UK was quite near the top, but Sweden’s performance in terms of managing the pan-demic has been better than the UK’s. Both at the time they were done, and also in hindsight, lockdowns look like a major policy failure or an expression of failure – they were a last resort.

The third theme of the pandemic is the way gov-ernments have sought to offset the economic costs of lockdown with massive fiscal and monetary expansion. This has varied enormously from country to country but none can match the fiscal expansion seen in the US where it amounted to around USD3.4 trillion, or 16 per cent of GDP. In comparison, Germany’s fiscal expansion was around USD290 billion, or 7.5 per cent of GDP. Because the US has done so much in fiscal terms, it’s likely that over the next year or so the dollar will weaken. There has been an enormous expansion of monetary aggregates and the dollar supply has exploded, far more than it did after the global financial crisis. While that might make sense in the short run and explains why the US economy is recovering rather better than Europe’s economies, there must be some consequences, particularly if Joe Biden wins the upcom-ing presidential election. I would expect to see the dollar weaken considerably relative to other currencies.

‘The magnitude of the economic shock is out of proportion to the magnitude of the pandemic’

‘Because the US has done so much in fiscal terms, it’s highly likely that over the next year or so the dollar will weaken’

The fourth theme is political. The US is gripped by the US presidential election and the overwhelming consen-sus among commentators is that Joe Biden is going to win. The incumbent Donald Trump is adrift – some 10.7 points behind – and it seems reasonable to assume that his attempt to win a second term is going to be destroyed. I can see why logically that outcome has some probability north of 50 per cent because after a crisis like this when there is a perception that the presi-dent has contributed to the mishandling of the pandemic people yearn for normalcy. Biden is the normalcy candi-date just as Warren Harding was the normalcy candidate in 1920, 100 years ago.

But remember 1948. In the presidential election that year commentators seemed certain that Harry Truman would lose to Thomas Dewey. The Chicago

Daily Tribune even went to press with the headline ‘Dewey defeats Truman’ before it became clear that Truman defeated Dewey thanks to a massive swing to the Democratic incumbent in the last two weeks of the campaign. I don’t think we can completely dismiss this scenario. Polling errors in key swing states could mean that this election is not a landslide victory for Biden but is close enough to be contested.

A contested election is the scenario that would cause the most upheaval. Markets have reconciled themselves to a Biden victory and they will be thrown into confusion if we end up in scenario similar to that in 2000 where one or more decisive swing states are chal-lenged. Given the confusion surrounding mail-in voting, there is the possibility that we could have days, if not weeks, of confusion.

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My fifth and final point is relevant for everyone interested in technology. Cold War II – by which I mean the cold war between the US and China – began before Covid-19 and it is not over. In fact, the pandemic intensified Cold War II and it will be very difficult for a Biden administration to change direction on a range of issues, particularly with respect to technology. They are not just going to call off the Trump administration’s campaign, for example, to limit Huawei’s dominance of 5G networks.

One of the most striking features of 2020 is the dramatic deterioration of the attitude of the rest of the world towards China. It’s not just in the US that anti-Chinese sentiment has soared in the last 18 months: a recent Pew poll revealed that Swedish sentiment is less favourable to China overall than American sentiment.

A big challenge for anybody navigating technol-ogy investment is to understand the implications of Cold War II and how the digital Iron Curtain is going to become harder to get through. It also creates a puzzle because a lot of western money is pouring into China right now – especially into tech stocks – and people are salivating at the prospect of the Ant Group IPO. This will look like a big mistake if Cold War II becomes the domi-nant geopolitical feature of the coming years and escalates, which I suspect it will over the issue of Taiwan.

I would like to make one final point on the pandemic’s social and cultural impact. I don’t think any of us fully understands how much the world has been changed by Covid-19. The world we have lost will be very hard to recapture. We will not be able to be as gregarious as we were and we will be working from home and relying more on internet-based technology for both workand leisure.

That’s the cloud’s silver lining for Lakestar. It feels that the future has been brought forward by 10 years in the space of as many months and that com-panies that were positioned for a more virtual world are going to be the principal beneficiaries of this great crisis.

All historical shocks have consequences that are not entirely adverse. The world after the First World War was dramatically changed. For those in the European elite it seemed like a worse world, but for many in the rest of the population it was a better world. For them, the world that they had lost by 1920 was one that was worth losing.

We may look back – admittedly not for many years – and say that this great shock brought much greater benefits than we anticipated.

I think there’s going to be a Balkanisation of technology in a variety of different ways. There will be less global integration in both hardware and software. China had already begun to separate itself from an America-dominated internet and I think that trend is going to continue. People have talked about the splinternet as if it’s a new thing, but it has been there from the early days of Chinese technological adoption. It’s become more pro-found because the US has gone after the Achilles’ heel of China’s technology sector and its reliance on importing semiconductors from countries like Taiwan. So five years from now national governments will have considerable power to set the rules in the way the network platforms and smaller internet players can operate.

NIALL’S DESCRIPTION OF COLD WAR I I ELICITED A QUESTION

DURING THE Q&A SESSION THAT ASKED IF HE SAW MORE TECH

ISOLATION COMING IN WESTERN EUROPE?

Globalisation peaked in around 2007 and since the global financial crisis it has been in retreat. That trend will continue but we won’t go back to where we were in the 1930s and 1940s when there was a complete break-down of globalisation and major economies became autarkic – cut off from trading partners and pursuing self-sufficiency. It’s more like a reset of globalisation that dials things back and increases the power of national governments relative to multinational corporations.

L A K E S T A R A G M 2 0 2 0


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Glovo is an ‘anything, anytime’ app that has achieved impressive growth across many markets since it was launched in 2015.

Its CEO and co-founder, Oscar Pierre, describes the highs and lows of the company’s trajectory.

S T E P H E N N U N D YPA R T N E R A N D C H I E F T E C H N O L O G Y O F F I C E R , L A K E S TA R

O S C A R P I E R R EC O - F O U N D E R & C E O , G L O V O

A N Y T H I N G , A N Y T I M E . I M M E D I A T E LY.

L A K E S TA R G R O W T H II N V E S T M E N T

April 2019December 2019

There is no question that we’ve been lucky. Covid has turned the world on its head, but the demand for deliv-eries has intensified – and that’s exactly what we do.

When the pandemic struck, three things happened to us. One was faster adoption. People who had never before considered a delivery app decided, after being stuck for a week or two in the house, that they wanted to give themselves a treat. And once they tried the experience and saw how convenient it was they were hooked.

Another impact was faster production from bar owners, restaurants, pharmacies and especially grocers. We were delivering from our own warehouses but we also built a marketplace. Covid was a wake-up call for the big grocers like Carrefour and Walmart to explore more delivery options and go multichannel so we were able to sign more deals.

It also had a positive impact on our reputation. We had previously suffered from some political opposi-tion to our role regarding the future of jobs but we were able to demonstrate how useful platforms such as ours are during situations like the Covid pandemic.

There a clear correlation between the strictness of curfews and our growth. Before Covid, we had slower growth in cities such as Barcelona, Milan and Madrid where convenience stores are everywhere, compared

with the Balkans and eastern Europe. But during the pandemic people in those cities were stuck at home and that’s where we saw the biggest impact in grocery growth.

Food today represents three-quarters of our busi-ness and that’s where we want to innovate. We recently launched a pick-up service – before we only delivered things from restaurants to homes and offices, now we’re bringing people to the restaurants to pick up. You order from home, you walk to the restaurant and when you get there it’s ready. The next natural move is bringing people to the restaurant so they dine in.

Strong market leadership following sale of Latin American ops

G L O V OL A K E S T A R A G M 2 0 2 0

I TA LY# 2

P O L A N D# 2

R O M A N I A# 2

S E R B I A# 2

P O R T U G A L# 2

S PA I N# 1

U K R A I N E# 1

G E O R G I A# 1

C R O AT I A# 1

LatAm sold at attractive terms (EUR 230m total consideration) allowing to refocus on the core country portfolio to achieve #1 market positions


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We’re investing a lot in a dashboard for restaurants so they can have visibility and data and can self-manage things like promotions. Historically, Glovo focused on technology for customers. Then we focused on technol-ogy for the couriers, because they are the biggest cost for us and making the logistics efficient was key. Now our focus is on building really good technology, not only for restaurants, but for any local business so they can use it as a tool to grow, understand more and upload promotions etc.

Another area that we are focusing on is establish-ing micro-warehouses inside cities so that we can offer 15-minute average delivery times for groceries. Once you get to a consistent 15-minute delivery time then your value proposition is bigger.

Our biggest challenge is launching in a new market and a new country. It’s an expansion race with the likes of Uber Eats and Deliveroo. We already have the technology to scale – for example in Spain we’re launching in our 200th city. But there’s a big cultural barrier if you want to enter another market. To help us, we built a global school in Barcelona where young people can in three months learn everything about

It’s not often that you get to experience being part of a story that is truly industry-defining, from the first step, pre-revenue, to it being a multibillion dollar enterprise.

Oscar is an industry-defining company and we’ve been part of its story for a number of years, spanning various stages of the firm. It started in 2013 as a New York-based health insurance company to take on one of the

Glovo before becoming nomads and going from coun-try to country doing analysis. By sending out people we trust we can launch in other countries.

But as well as being able to launch fast, we have to be prepared to shut down fast too. Shutting down a market is really tough – you have to fire people - but we have very little budget so we have to focus only on where things are going really well. This year, for exam-ple, we are withdrawing from Latin America, selling to one of our competitors. Even though the region was doing well, it was below the average for us, because of competition. A big part of our business in the region was in Argentina and we became concerned about the economic situation there. The sale will allow us to double down on the places that are working really well: we have identified 20 new countries where there’s very little competition.

Some of the things that have happened in the last 12 months have put us in a good spot to start thinking about an IPO. In the five years we’ve run Glovo we’ve never had more runway than 8 months. This is the first time we can sit down with the team and talk about an 18-month plan.

most complex healthcare markets that there is. Back then, Oscar was focused on individual insurance but it has since grown across the US and expanded its product range to serve families and businesses as well as entering into partnerships.

Oscar’s co-founder, Mario Schlosser, takes up the story in his own words.

Jan 2017 Jan 2018 Jan 2019

First Contact

Round Priced

Series D

YOYSeries Dpriced

Orders 1.6x 3.0x

Revenue 1.8x 3.0xGMV 1.9x 3.0x

Series E1

Jan 2020 Oct 2020

‘People who had never before considered a delivery app decided, after being stuck for a week or two in the house,

that they wanted to give themselves a treat.’

Introduction by Oliver Heimes, Lakestar partner responsible for investments in the healthcare sector.

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Glovo is growing very fast at scale

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with your end-to-end healthcare journey and we can be proactive in telling you what to do next in the health-care system. And we can put the right incentives in place to make sure you actually go and do that.

Another thing that is unique with us compared with other digital health players in the US is that we conduct all our technology infrastructure and opera-tions totally inhouse. This gives us a chance to test new ideas very quickly and easily. For example, we were the first insurance company in the US to have a Covid risk assessment that worked for each member. We were also the first to have a directory of Covid test locations. For our members we could quickly and easily construct new workflows, for example to ship maintenance drugs or medical equipment easily to people or giving our nurses and doctors a chance to intervene more quickly.

I believe the US healthcare system will become more virtual, more individual and push the burden of risk more towards the providers. We have been gearing up for that shift for years. This year we accelerated the launch of a whole new suite of insurance plans where if you pick an Oscar virtual doctor – a doctor in the clouds, so to speak - then all the care you get with that doctor will be totally free and all the downstream care that the doctor triggers will also be free. To deliver a plan like that well you need to have the insurer, the member engage-ments, the digital assets, the claims system and the care delivery all in one place.

Covid has also super-charged our fully-integrated stack. To give an example of that, if a doctor chats to a member and thinks there is a high probability of him going to an urgent care facility in the next week or so, the doctor can “push a button” and have a nurse go to his house. If the member ends up going to urgent care the cost to him and to us will be higher. You can’t give a service like that unless you’ve got all the technology stock that we’ve built that connects all the dots.

Having built all this infrastructure inhouse allows us to easily activate business lines and partner-ships. We built a healthcare plan with the Cleveland Clinic to share risk 50:50 with them and jointly manage members’ experience and care. We’ve also just launched a new Medicare plan for older folks with a big hospital system in South Florida – you can now buy an Oscar co-branded health plan with this hospital and we pro-vide the technology platform.

L A K E S TA R I N V E S T M E N T

Lakestar I January 2014

Lakestar II February 2016

Lakestar Growth I June 2020

Products: ‘Obamacare’, Individual Insurance, Family Insurance, Medicare, Businesses, Virtual Care

All this puts us in a very good position to nimbly react to any regulatory change. If you look at the successful US healthcare insurers of the past 15–20 years, they picked the regulatory shifts and they rode them all the way. But some shifts will take place whatever administration or regime is in power in Washington. We expect a shift towards more individualisation in the US healthcare system and are very much ahead of the game on that.

Today, we are as excited as we were when we started out in terms of how far we can go. We expanded into new states last year and we’re expanding into three new states in 2021. We just launched our new small

‘I believe the US healthcare system will become more virtual, more individual and push the burden

of risk more towards the providers.’

employer products, for employers with fewer than 50 staff, in partnership with Cigna, a big insurance com-pany in the US. We are running that plan end to end and it just sits on top of the hospital network. I think it will grow quite explosively over the next couple of years.

In 10 years from now what I want to see is mem-bers who have been with us for over a decade. I want them to be loyal to Oscar because they love it and for us to deliver the lion’s share of their healthcare either through our physicians in the Oscar medical group or through partner hospitals.

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Back in 2012 I was a visiting researcher at Stanford in computer science and my wife was pregnant with our first child. When we tried to navigate the US healthcare system I was aware of two big problems with it: it is too costly and too complicated. I felt that insurance compa-nies should be able to use their power on my behalf as a member to make healthcare simpler and more afforda-ble. US insurers were doing neither of those things: they were operating in a model that was more similar to the employer/client relationship and were removed from the end-user. I felt there was a role they could play that first and foremost built trust and engagement with their members. That was the idea behind Oscar.

We have over USD2 billion in revenues this year, about 420,000 members on the books but what I am most proud of is that we have the highest member engage-ment of any insurance company.

The important thing is to be the entrypoint for healthcare. If you are feeling unwell and come to us, through our app, for example, we have a lot of visibility

USD2.2bnRevenues


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July 2019

For a firm like Lakestar, investing in the sharp edge of European technology, the trucking sector, at first glance, appears an odd fit. True, transportation and logistics is a massive market, worth around USD9.6 trillion globally, with trucking making up the bulk of that, operating through around 350 million commercial vehicles. But when we performed a deep dive into the sector around two years ago, we found an industry that was non-digitised and inefficient. In other words, it was crying out for innovation.

That’s where sennder comes in. When David Nothacker co-founded the freight forwarder sennder in 2015 he had to buy five fax machines simply to connect into the industry and how it operated then. Now, thanks to innovation, trucking has been transformed. In the last five years around USD5 billion of VC funding has come into the digital freight marketplace with a further

There is no doubt that some of our recent opportunities came about because of Covid. For example, we were able to convince Poste Italiane to give us their entire full truck business because we demonstrated that we could do it better. That joint venture is now going well and we more than broke even after just four months, a year before we planned. It just shows what we can do when we have a lot of volume in one geography – we’re now the largest domestic freight forwarder in Italy.

Similarly, Everoad of France approached us, presenting us with a great merger opportunity because we were planning on opening an office in France but struggled to find the right team. Everoad had a great team on the ground and a lot of interesting contractual relationships including a contract with the Casino supermarket chain.

Then we decided to join forces with Uber Freight, which brought a lot of seniority into sennder. This merger is interesting from a technology and sales point of view as it allows us to codevelop standards as well as

USD3 billion going into dynamic warehousing. Even bigger has been the investment in the last-mile delivery segment – around USD10 billion in the last five years.

Moreover, the logistic market plays to our European perspective. Because of the complexity of the European market, around 46 per cent of all logistic revenues are going into Europe, yet it is still an underin-vested segment.

In July last year we invested into sennder, leading a Series C round alongside other investors. At that time sennder had just EUR70 million in revenue. Today the run rate is EUR250 million.

David and his co-founders have also been busy forging joint ventures and acquisitions that make sennder an even more compelling proposition. But how is Covid affecting the business and what is its vision of the future? Here, David will tell you in his own words.

Introduction by Christoph Schuh, Lakestar Partner who focuses on travel, transportation and mobility

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green solutions that can be sold to customers in North America and Europe. We’re happy that instead of fight-ing against Uber Freight we are now joining them and running together.

Key to all this is our technology team of over 130 people. We spend around a third of our budget on tech-nology, and it shows. We can already do more things more efficiently than traditional freight forwarders. For example, from the moment an order comes in to when we invoice it, it’s completely digital. We can even go beyond this digitalisation by optimising data. For exam-ple, we can combine loads of different customers, one after the other, to increase the average utilisation and thereby reduce CO2 emissions. As well as being more efficient, this makes us more competitive and smooths out volatility in pricing.

Until a few months ago we always viewed sennder as a digital freight forwarder with one product and developing technology for our own use. But with the acquisition of, first Everoad and of Uber Freight we started developing our system in a much more modular way. By adding more functionalities to our system we realised that we could offer our operating system to a much broader part of the market. We have received a lot of interest from trucking companies as well as shipping companies that currently rely on Excel or email to manage loads. We’re now in final negotiations to launch software as a service models. In this way we will have new revenue streams such as commission fees on trans-action volume. This opens up completely new opportunities and takes sennder to a new level.

Another thing that excites me about the future is autonomous trucking. I think that autonomous trucks will come in the next 10 years, at least for long-distance operations on highways, from highway entry to exit. Traditional trucks will do the last mile, from the

highway to the warehouse and sennder is working on technology to efficiently run the operation of autono-mous and non-autonomous trucks.

To fund all this we plan to launch a financing round in the next couple of weeks. Our aim is to hit EUR2 billion in revenue by 2025. As well as our plans to expand the Saas business, we will continue our M&A, acquiring old-school brokers that have no digi-tal processes but that do have very strong networks, both of carriers and in specific regions. That way we can come in with our technology and increase the efficiency of their operations. This will increase the natural opti-misation at the sennder group.

TruckingSeaAirRailInventory carryingWarehousingInternal forwarding & admin

4,132

714301297

2,116

1,056

995

USD 9.6trGlobal logistic market

The global logistics market

Source: Armstrong & Associates Inc., 2018

‘The transport and logistics market that is non-digitised and inefficient, with a huge potential

for disruptors such as sennder. ’

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Can you briefly outline what you bring to the procurement market?

We have put together the world’s biggest buyer-supplier relationship database. We have billions of connections. Those are essential if you want a proper recommendation. We collect all the data points a purchaser would need and we even indicate the OEM relationship the supplier has.

Is it true that the Chinese government turned to you to help it source personal protective

equipment (PPE) earlier this year?

At the beginning of the pandemic, the global supply chains could not cover China’s demand so Fosun, the Chinese government’s investment arm reached out to us for help. Within 24 hours we helped them identify about 1,000 PPE producers around the globe and helped them contact them and in this way we eased the situation in the country.

I believe you also found 10 million masks for Unilever as well?

During the pandemic, PPE was running short and there were three or four known suppliers and every company on this planet was approaching them. They were com-pletely flooded. The global supply chain would have been able to cover global supply but it wasn’t distributed evenly. We were approached by Unilever to find PPE for their workers and we also then helped Unilever distribute its hand sanitiser to five new suppliers compared with the two it had before. So we helped it to go through the crisis quite smoothly.

I know you have also been helpful in the world before Covid, in particular,

by helping Audi cut costs considerably. Can you tell me how you did that?

This was a case where we saw how data and AI can help make cleverer decisions on a procurement supply choice level. Audi wanted a supplier for its speaker covers but we realised that up to 70 per cent of the suppliers recom-mended by AI dropped out of the process and with a little digging we discovered it was because their production of the car speaker grills to the given specification would not have been very efficient. The AI considered that and we found manufacturers who, although they had no experi-ence of doing speaker covers, they did laser drilling and could produce to the specification. They also offered a much lower price, USD25 compared with€EUR120. This gave Audi a massive cost reduction amounting to savings of about USD2 million savings a year.

The Covid pandemic has highlighted the fragility of global supply chains. We have all seen the pictures of, or experienced, empty supermarket shelves during lockdowns around the world. Whoever can deliver the fastest and fill shelf space will gain market share. It is more important than ever for cor-porates to have resilient supply chains.

Even though procurement is the second largest industry after financial services, it is still done in a highly manual way. Lack of innovation in procurement means that cus-tomers searching for suppliers often end up at websites where they have zero visibility on the prices, on delivery details, on the supplier’s certification and its trustworthi-ness. This is exactly where Scoutbee is carving out its market – building the single source of truth and the one-stop shop for global supplier discovery. I put these matters to its founder and CEO, Gregor Stühler.

T H E O N E - S T O P - S H O P T O O L F O R S U P P L I E R M A N A G E M E N T

By Mathias Haniel, in discussion with Gregor Stühler from Scoutbee


December 2019

Why are resilient supply chains so important to either defend or gain market

share in current times?

Next year, when hopefully the economy will pick up again, the global demand of hundreds of thousands of OEMs and consumers will be hitting a supply market that is completely diminished. Some will have gone out of business, others will have sold machines or laid off workers. If you are an OEM with a single source of supply that is not able to deliver it means that you are losing market share to those that have resilient supply chains and can actually provide the products. This will be more dramatic next year than what we saw this year because there will be no state subsidies or governmental support. It is a shark tank and it will definitely end up as survival of the fittest. We are already proactively support-ing large OEMs so that when the economy picks up again they are ready to deliver.

Covid gave a push to how procurement is seen within the company. Procurement is chronically under-funded digitally but when Covid came along companies saw how important it is. It now gets the investment it deserves, not only externally from investors but also inter-nally from the companies.

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Compared to the size of the procurement market little is happening in terms of R&D.

Why is there so little innovation?

When we founded Scoutbee in 2015 there was no aware-ness of digitalisation and no willingness, or internal budget, for it either. This has massively pivoted over the last five years. The last digitalisation era was eprocure-ment in the early 2000s, but that was nothing more than moving invoices to email.

Procurement has always been seen as the internal service centre. Companies were concentrating on increas-ing their revenue rather than cutting their procurement costs -which would have the same effect. Now procure-ment is on the rise. It is really the Salesforce moment of

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procurement right now – Salesforce was fighting against large CRMs from Microsoft etc; this is now happening in procurement. I already see hundreds of start-ups jumping out of the shadows but there can only be one Salesforce of procurement and we’re working on that being Scoutbee.

What is your outlook for the procurement industry?

Going from a supply market to a demand market will require a massive digitalisation in procurement. We want to be the global contact when it comes to supplier/buyer matchmaking. We want to own at least 50 per cent of all strategic spend that is matched, making us the biggest marketplace on this planet.

‘Resilient supply chains will be more important than ever – particularly when economic

activity picks up again post-Covid.’

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Everyone wants to spot Europe’s next extraordinary tech entrepreneur.

Someone already has.

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