Listen to this articleDigital Future has recently made $350k investment in Replyapp.io, SaaS solution that helps organizations increase sales productivity by automating customer emails and follow-ups. Digital Future invests in technology startups from Central and Eastern Europe that have great business potential in adtech, e-commerce, mobile, and AI space. Below is our interview with Oleksii Vitchenko, the founder of Digital Future.
Q: You’ve recently announced $350k investment in Replyapp.io – do you have any particular example of investment success that you have already had?
A: I am passionate about investing in companies that disrupt an existing industry and have massive markets. A great example of this can be Jeapie, a company that developes a push notification service. I invested in its team because i believed that the startup has a great future and with great idea for rapid revenue growth. It is one of our biggest success so far as we invested in Jeapie at the very early stage and helped company to develop applying our smart money strategy. I am proud that our approach resulted in the successful “exit” and fast return of investment. Jeapie was quickly noticed and acquired by a global technology company that helps enterprise retailers create shopping experiences across mobile touchpoints. Currently, besides Replyapp.io we have been growing several very promising projects. I must mention Lifetracker, as a project with global market potential. Its team is crafting a comprehensive mobile platform that covers all areas of human life to offer the market more than a merely solution for productivity. Just likeGoogle displays static information about the world, and Facebook, the social networks, Lifetracker intends to use the data on the interactions between people to model the individual and group behavior. We anticipate its success a lot, as Lifetracker was already highly recognized at the World Mobile Congress 2016 and the team is eager to finish the working prototype to launch the product globally.
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Q: How do you usually evaluate the investment? How much you are willing to risk – are you prepared to lose some money you are investing?
A: All investors are looking for high returns, so they are willing to risk to some extent. The main goal while investing is to reduce all potential risks as much as possible without huge losses. Our strategy is to offer statups smart money, which means that along with money we provide relevant experience, expertise and the ability to contribute to the startup businesses far beyond the financial investment. We ensure that the startup teams get advice, guidance and all needed resources through their journey to building great businesses they want. Moreover, we invest only into the areas we are confident, considering only startups that correspond to our criteria and field of expertise. Before making investment, it is important to make sure that the project has a clear business model, global focus and a functioning prototype. We use standard investing metrics and ratios to evaluate potential revenue or financial loses. It is as simple as defining your investment criteria and then finding options that match all your requirements.
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Q: While evaluating whether or not you should invest, what is more predominant for you, the startup or the entrepreneur behind it?
A: There are a lot of skills that are extremely needed for running a startup, as there are many risks that . What really matters is a great team, who is passionate about the idea. I always evaluate both, the potential of the startup and the chances it can turn into the next big thing and its team. But people are the most important value, as they are going to face many obstacles while growing business so that is crucially important how the team is going to overcome difficulties. Plus, partnering with a smart money investor means that the level of responsibility is much higher, as such investors are entitled to be aware of each step of the business development and what you are bringing to the table on each stage of growth. This is another reason why dedicated, goal oriented team means a lot for our investment strategy.
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Q: How would you describe the ambitions of Digital Future?
A: At Digital Future we focus on such areas as digital marketing, AdTech, Advertising, e-commerce, mobile and AI. Usually we choose to invest in fewer ideas than most, but those entrepreneurs we work with, benefit from greater support in building their game changing businesses. Our own visibility as trustworthy investment company in Central and Eastern Europe and growth has been amazing in a recent two years, and I am very thankful for the team’s effort of managing it so well. We are growing as a company that fast and only possible because of the passionate, driven, intelligent people with lots of ownership thinking in our team. Usually, it’s a common investment practice that too much money is being invested in unsuccessful startups around the world. The key ambition of Digital Future is to provide greater value to businesses and change the success ratio in our portfolio by growing as much successful companies as possible. We are constantly working on defining critical success-failure factors in projects to develop a framework for determining critical these factors early in startup projects.
Q: Some recent reports show that startup funding is slowing down now. Is the venture capital in a downturn?
A: I think when we talk about the slowdown what we really mean is that currently there less great companies are being built in comparison with some period a few years back. There are some important factors that are shaping the industry at the moment, such as the investors’ focus on fewer but larger deals, and growing number of startups that announcing higher valuation that very often look likes a guaranteed success, but the reality might be far from that. Such factors might slow down the processes, making the industry more complex now than a few years ago. But, like in any other area, there are repeating patterns of changes like common growth cycles that we can observe in any business. The investment space has matured in recent years and its growth has become more routine. The next cycle will probably be more explosive in new ideas and will bring the industry’s rebirth.
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