Hummingbird Ventures

Nov 3, 2020

5 min read

Hummingbird raises $200M at record speed to back exceptional founders globally

1/ Focus on seed + double down capacity of $200M fresh capital

If you are not raising $1B, it’s because you simply can’t, right? We think not. A larger fund size would keep us from our best and our passion: investing in seed, with tickets from $500K to $5M in the earliest stages of a business. This is before the dust settles on newly emerging industries, ambiguity prevailing and no ‘data’ or much track record to identify talent: so hard yet so gratifying when things work out. Entrepreneurs often have a special bond with their first VC and this is where we would like to continue to play. This is why we kept the size of our new Seed Fund HV4 at $60M. We want to be there the earliest.

We didn’t stop there: we have fared really well doubling down on our portfolio companies with our first opportunity fund in 2014. And the new $140M Opportunity Fund does just that: extra ammunition to invest in our winners and new special opportunities with up to $20M in aggregated commitments per company. But without the pressure of having to invest and us lowering the bar: no fees charged unless we find good use of the extra capital. Optionality to lean in with global winners without any of the burden.

2/ The luxury of fast

After kicking off our fundraise, we were oversubscribed in 10 days. What helped was scoring top 1% VC returns globally consistently over the course of several funds. Our selectiveness, in contrast with the traditional early stage investing mantras, yielded one of the highest early-stage-to-winner ratios in the world, with 3 out of 19 seed investments in our first 3 funds between 2010 and 2014, generating $100M+ net profits!

Driven by overwhelming support from our existing private investor base, we onboarded over 200 shareholders in a first and final closing, taking less than a month from start to finish. What an incredible job by our extended team in an environment increasingly stifled by compliance. Imagine shareholders jumping through hoops just so that we could stay focused on our calls with entrepreneurs even during the fundraise. We easily forget how we, like most funds once, took a year from first to final closing. One year of poor productivity impacts 3-odd years of investment periods. No such distraction this time; what a luxury to focus on the thing we love most: working with entrepreneurs.

3/ We want to be the best global seed stage investor

We are collectors of contrarian truths. We believe ‘Alpha’ can be found in uncharted territory only: overlooked markets, emerging geographies & bold, new technologies and business models… often poorly understood, too underground, banal, against broad consensus, led by extraordinary entrepreneurs, off the beaten track.

When we started our careers, one golden rule of thumb for an investor was to focus on a local hub. To go sourcing over drinks and local networking, and perhaps in a private equity spirit to send out the cavalry if a company ran into trouble.

What did not help the startup ecosystem in particular was fund of funds with strict mandates, pushing the funds to a strict set of industries and geographies. Our first interactions way back with such fund of funds would have stopped us from backing Peak, Gram and in fact most of the great companies we invested in that don’t fit into a mandate, e.g. blockchain, frontier emerging markets. Bypassing these counterproductive limitations was hard in the early stages of our fund, but it set us free to go global.

Instead of trying to win in a local hub, we have proven to pick out great entrepreneurs far away from the traditional startup epicenter. To execute a global sourcing strategy is far from a walk in the park, but just like entrepreneurs we work with, we hustle every day, work with high intensity and speed to connect with the most exceptional companies early. Bypassing local investor sultans, we found the best entrepreneurs in emerging markets to be particularly intense. We have experienced the energy of zero to unicorn several times over, but the sheer intensity of for example Indian founders we work with, is just incredible.

Increasingly, entrepreneurs in emerging markets want to go global and benefit from the experience of their best peers in other parts of the world. A different sound. Inspiration outside a local bubble. Instead of us yapping away at board meetings, we believe Hummingbird’s global approach benefits founders, as they connect amongst one another to share notes in the earliest stages of building a startup.

4/ We’ll increasingly look out for a new kind of healthcare and biotech startup

Old biotech templates no longer work for a new breed of ambitious founders. This generation is harnessing the power and efficiency of traditional tech start-ups and using this to engineer the frontiers of health and biology; combining academic and theoretical research with the execution of exceptional tech companies. Based on our experience working with BilliontoOne (US), Pristyn Care (India) and Higia Technologies (Mexico), a paradigm shift is on the way as these companies are using novel advances to tackle problems experienced on a global scale, from more affordable healthcare for the masses to innovative diagnostics solutions. In the realm of biology, we have witnessed the potential of synthetic and computational biology with our most recent investment in Basecamp Research (UK), which is unlocking our planet’s biodiversity to find solutions to some of humanity’s greatest challenges, with the potential to deliver sustainable food supplies, environmentally-friendly manufacturing capabilities, and a new generation of medicines.

We are really excited to see 2 new colleagues joining us to help take a deeper dive in healthcare, biotech and beyond: Pablo Lubroth and Tess van Stekelenburg.

5/ The first 2 investments : Pristyn Care and Kernal Biologics.

We already invested in Pristyn Care in 2019 and we are tripping over ourselves in excitement over what is next: Harsh and the team building the largest asset-light surgery hospitals in the world. A high conviction investment from the new Opportunity fund.

Kernal Biologics is our first investment from HV4 and a great example of what we look for: brilliant founders, personified grit, and a project to shake the world, for good. Move aside Moderna and Curevac, as Kernal is a first mRNA 2.0 company. Kernal develops treatments whose potency can be dialed up without harming healthy tissues. Kernal’s technology, onco selective mRNA, exploits a flaw in the armor of cancer cells, provided by their ribosomes, as they seem to speak a different ‘language’ than other cells. Overly simplified, a future Kernal mRNA treatment will tell specific cancer cells to self-destruct and leave other cells unharmed.

We look forward to welcome new entrepreneurs across the globe, building a new generation of category defining startups that take on some of the world’s biggest challenges. Finally, we are looking to expand our investment team further so please reach out if you like what you have read so far.