Silicon Roundabout Ventures, Community Updates Feb '24
Silicon Roundabout Ventures, Community Updates Feb '24
Our Community & Fund update, with fresh fund highlights, community events, and deeptech market insights. Written by our AI. Edited by our humans.
In this edition
The Deeptech Lowdown: A look at our unique approach to transparency in VC fundraising, testing the waters with a public 30-day challenge and sharing insights on market response.
Upcoming & Recent Events: Highlights from our inaugural LP dinner's success and an announcement of an intimate dinner event in Berlin aimed at connecting investors with the deeptech ecosystem.
Portfolio Spotlight: Updates on Archangel Lightworks' significant achievements, [REDACTED: ONLY FOR LPs]' strides in quantum infrastructure, and Anaphite's progress in material science, along with a quick look at Greenjets' innovations and Vypercore's FPGA development.
Thought Leadership: Insights from the front lines, including the strategic importance of UK semiconductor startups calling for governmental support, and the vital role scientists play in advancing Europe's deeptech sector.
Tech Updates: Progress on our internal platform, experimenting with LLMs for more human-centric communication, and exploring open-source possibilities.
Six lessons from a Unicorn deeptech founder, interviewed by our GP
A reminder of what we are about
Silicon Roundabout Ventures is a Super-Angel Seed fund in the UK investing in European Deep Tech startups. It leverages their community of 15,000 entrepreneurs and engineers, through which the team previously attracted, selected and helped launch 33 Deep Tech and Big Data startups now valued at over £6 Billion.
The fund is backed by top-tier VC Molten Ventures (LSE:GROW) and exited founders, engineers and execs: including ex googlers, amazonians and from 2 unicorns.
The Deeptech Lowdown (Market update)
The First VC To Open Up Their Fundraising Journey Is In Deeptech
After decades of secrecy and obscurity, the VC world is finally starting to open up (if only a tiny bit). Some funds, including our own, decided for the first time to release a copy of the VC fund deck they had used during their fundraise.
We are now turning the transparency knob up a notch by having our GP share our final closing roadshow in public: a 30-day challenge!
This initiative aims to test the efficacy of transparency in the venture capital fundraising process. Our hypothesis is that the more we build a community around us and help others along the way, the more our brand and message will grow.
Market Response: Documented engagement with the venture capital and founder communities highlights an industry trend towards valuing transparency. The observed interaction provides a data point on market readiness for open fundraising models.
Technology Adoption: Discussion around the strategic use of fundraising technologies offers actionable insights for both VCs and founders. The shared experiences contribute to a broader understanding of technology's role in fundraising efficiency.
Investor Interaction: Feedback from an LP and interest from GPs demonstrate the challenge's effectiveness in generating industry engagement. This data reflects the potential benefits of a transparent approach to venture capital fundraising.
This 30-day challenge underscores a strategic exploration into the benefits of transparency in venture capital. The initiative's outcomes offer insights into community engagement and the potential for adopting similar approaches industry-wide.
You can follow the journey live, on LinkedIn.
📅 Upcoming Events and Community Updates
Recap: Silicon Roundabout Ventures Hosts Inaugural LP Dinner
Our first private LP dinner recently concluded with notable success, gathering a diverse group of 21 leaders from the European deeptech ecosystem.
Highlights:
Immediate outcomes included two soft fund commitments and the addition of a new unicorn founder to our community!
The event fostered genuine discussions among serial entrepreneurs, family offices and funds of funds, focusing on the potential of Deeptech within Europe.
Special mention to Anmol from Greenjets for presenting the world's fastest electric aerospace propulsion system, emphasising the shift towards impactful deeptech investment. 🚀
🚀 Event Highlights: "How Cutting-Edge VCs Are Using Data" Discussion
Our recent discussion on the application of data and AI within the venture capital sector offered attendees a great overview of current practices and future trends. Here are the key takeaways:
Discussion Points:
Data Utilisation: Insights into the use of data for enhancing investment outcomes, including preferred data sources.
Fundraising Dynamics: The impact of tech-driven approaches on engaging LPs and attracting investments.
Strategic Tools: Debates on the merits of developing in-house tools versus adopting off-the-shelf solutions, along with panelists' top tool picks.
Portfolio Support: How VCs can leverage data-driven methods to assist their portfolio companies.
+ much, much more
Thanks to our guests Anastasia Gonotskaya, David Teten, and Atte Honkasalo
The full recording is available here
📅 Upcoming: Berlin Event: Dinner for LPs, Angels, and Family Offices
Location: Berlin, Germany
Date: 12th March
Format: Intimate Dinner
We're hosting a dinner in Berlin for existing and potential LPs, including angel investors and family offices with an interest in European deeptech. The event aims to connect investors and discuss the sector's future.
Highlights:
Focused discussions on European deeptech.
Limited seats, with participation from experienced LPs.
Opportunity for meaningful networking.
We’ll happily be inviting supporters to our party once the fund closes 🤫🥳🍻
Join Us: If you're interested or know someone who might be, please reply for more info.
Fund rundown
New investments since last update: 0
Total Portfolio Companies: 7
Fund: 1
Vintage: 2023
Top-of-the-funnel Pipeline: 3
Key Deeptech Areas: Computing, Climate, and National Security Infrastructure
Markups
No markup since the last update, however Anaphite closed a convertible pre-A round, as well as securing grant funding. Other announced recipients of equity-free investment in our portfolio included Archangel Lightworks and [REDACTED: ONLY FOR LPs].
Anaphite and Greenjets are currently discussing terms for an upcoming priced round. Series A and Seed respectively.
Performance Snapshot
Here is each fund’s performance to date. These numbers are taken directly from Vauban’s back office and represent our ownership position based on the most recent priced rounds, including any down rounds to better represent the current market value.
Note: We do not book non-priced rounds as markups.
Silicon Roundabout Ventures LP Fund 1
Vintage: 2023
Status: Open for new LPs (via equalisation)
Fund Min. Target Size (Soft Cap): £5M
Fund Target Hard Cap: £10M
Currently invested: [REDACTED: ONLY FOR LPs]
First closing: Dec 2022
TVPI: n/a
DPI: n/a
Most Valuable Positions: n/a
Investments: 7
Target Pipeline Closing soon: 3
GP’s Angel Portfolio + 4 “Fund 0” SPVs
Vintage: 2020 (H2)
Investments: 15
TVPI: 1.1X
DPI: n/a
Highlight Companies: Ori.co, Aegieq.com, Kaizan.ai, Nanusens.com, rnwl.co.uk, Ecosync, Axiom.ai
Status: closed
Community “Virtual” Portfolio
Vintage: 2016
Companies considered: 26
Method for selection: Silicon Roundabout community pitch winners until the beginning of the GP investment activity
Assumed “virtual” investment: £200,000 cheque into each company; No follow-on
Simulated TVPI: 6-6.9X
Simulated Most Valuable Positions: 50-58X
Notable companies: Monzo, Zego, BlueVision Labs, Sano Genetics, Admix, Humanising Autonomy, CausaLens, iProov, Proximie, Senseon, VividQ
Portfolio
[REDACTED: ONLY FOR LPs]* is a snapshot of the current portfolio.
*Link to a private Airtable base with a list of all portfolio companies and include the company’s name, short description, why we invested, URL, and category.
➕ New Additions
No new investment since the last update.
Co-investment Opportunities
[REDACTED: ONLY FOR LPs]
🚀 Portfolio Updates
Archangel Lightworks
Archangel Lightworks experienced a significant year of growth and development in 2023.
Seed Funding: The year started with a £4 million seed round, with Oxford Science Enterprises and Silicon Roundabout Ventures.
New Lab Facility: Opened a state-of-the-art lab in Oxford, expanding their operational capacity and signalling a tripling of their team headcount.
Project Milestones:
ESA HALO Project Extension: Awarded an extension to further develop their Optical Ground Station (OGS) for low SWaP-C, deployable communication systems.
ESA 5-G HUB: Secured a project to demonstrate the viability of Free Space Optical (FSO) backhaul for 5G networks, aiming to integrate FSO into existing network infrastructure.
QLOGS Collaboration: Progressed on a collaborative project with SpeQtral, enhancing their deployable optical ground station with quantum key distribution capability.
Facility Upgrade: Completed the upgrade of their laser communications facility in Oxford, which includes a custom laser lab and celebrated with a grand opening ceremony.
Team Growth: Expanded the team from 6 to 19 members, emphasising their commitment to innovation and technology development.
Industry Engagement: Highlighted by participation in the UK Space Agency’s Space Investment Forum and attendance at the UK Space conference in Belfast, making valuable connections within the space industry.
More here
[REDACTED: ONLY FOR LPs]
[REDACTED: ONLY FOR LPs]
Greenjets
Darren James, from Greenjets, delineates the technological leap with the Sycamore propulsor, transcending the traditional limitations of Electric Ducted Fans (EDFs) in efficiency, noise, and weight.
🔋 Efficiency Unleashed:
The Sycamore 160 propulsor shatters old norms by delivering 5kgf thrust using only a third of the wattage of standard EDFs.
Outperforming larger counterparts, the Sycamore 160's design sees a fan diameter of 160mm surpassing the thrust-to-power ratio of 254mm propellers.
🔬 Innovative Design Principles:
Inspired by gas turbine advancements, Sycamore engines maximise aerodynamic and electrical efficiency, tailoring jet velocity to match cruising speed for optimal performance.
The strategy includes increasing fan area, reducing fan loading, and adjusting fan speed to harmonise with motor characteristics.
🚀 Dynamic Aircraft Integration:
Sycamore engines offer versatility for airframe designers with flexible mounting options, contributing to aircraft stability, noise reduction, and payload optimisation.
Its compact design ensures better alignment between thrust axis and center of gravity, mitigating pitching moments while enabling freedom in longitudinal aircraft balancing.
🛠️ Enhanced Performance and Safety Features:
Embedded within StriekAir's CarryAir UAV, the shift to Sycamore engines has resulted in improved payload allocation, lower noise, and enhanced performance and endurance.
Safety is also at the forefront, with no exposed blades, minimising the risks of accidents and entanglements across various operational settings.
Read more here
Anaphite
Anaphite is pushing the boundaries in material science with notable advancements and strategic partnerships:
Material Distribution: Sent samples to two major automotive OEMs in Germany and the USA, plus cell manufacturers in Germany and Korea. More samples are on their way to selected customers for Q1.
Intellectual Property: Strengthened its IP portfolio with the filing of a 6th patent family, focusing on the composition and process of dry coatable material. Also, celebrated the grant of their first patent family in the USA.
Commercial Progress: Under the guidance of Dr. Jennifer Channell, who joined as Commercial Partnership Lead in July 2023, Anaphite has made significant strides in customer engagement. They've streamlined a process from initial discussions to development agreements, now having 17 companies past the Material Test Agreement (MTA) stage, including 8 major automotive OEMs.
Testing Success: One automotive OEM has completed tests on Anaphite's dry coated electrodes, finding them equivalent to their optimized in-house materials. This opens the door to further discussions and development steps.
Series-A Round Prep: Anaphite is aiming to secure heads of terms with a lead investor for their Series-A round, targeting closure in Q2.
Vypercore
VyperCore has reached significant progress in the development of its FPGA for the 2024 evaluations, keeping the project on target and aiming for an early demonstrator in June, followed by a full FPGA demonstrator in September with teacher customers.
Key development accomplishments include the well-underway key starting blocks:
Architecture Specifications for both Processor and Memory
Functional & Transactional Models
Microarchitecture Specifications
RTL (Register Transfer Level) for the Akurra processor's first version, which is currently in simulation
The FPGA development work has already commenced, with the simulation and synthesis targeting Xilinx FPGAs.
Recent notable events:
The team has expanded to 16 people, including part-time staff.
Peter has been confirmed as the VP of Engineering.
Discussions with EDA suppliers have started.
Work is progressing on the second patent application.
A five-strong senior management team has been established.
Strategic and commercial interest continues from various entities including Synopsys, Mediatek, SK Hynix, Intel Data Centre team, and Teacher Customer #2 (pharma).
2024 Development Plans remain on track, with milestones such as the "Hello World" processor simulation achieved by the end of January.
Francesco’s Reads
🇬🇧 UK Semiconductor Startups Call for Government Action Before Budget
Techworks, the coalition of 280 British semiconductor and deeptech firms, voices its concerns over the strategic disadvantage faced by UK startups. Competing with the hefty incentives offered by the US over $50 billion and the EU's €43 billion Chips initiative, UK companies are sounding the alarm for support to level the playing field.
Five-point action plan for growth:
R&D Tax Benefits: Expand R&D tax credits to include strategic enhancements to semiconductor manufacturing, not just the purchase of new equipment.
Investment Matching: Advocate for a public investment scheme to match lead investor funds for key facility upgrades where UK companies show global leadership potential.
Local Procurement Incentives: Establish targets for the government and private sector to prioritise British semiconductor technology.
Institutional Investment: Encourage major public investment entities, such as the British Infrastructure Bank, to actively participate in funding rounds for chip companies, thus de-risking private investments.
Talent Development: Recommend reforms to the apprenticeship system to generate a stronger workforce of engineers and technicians through enhanced flexibility in using Apprenticeship Levy funds.
Anticipating the Strategy Rollout: These demands align with the UK government's newly announced semiconductor strategy that earmarks £200 million for the 2023-2025 period, highlighting the semiconductor industry’s importance in the UK’s ambition to become a science and tech superpower.
Read more here
🔬 Europe's Deeptech Ambition: More Scientists in VC Needed
The Case for Scientist VCs: Dr. Ion Hauer from APEX Ventures highlights the vital need for scientists within venture capital to propel Europe's deeptech sector to global leadership.
Europe's Research Powerhouse: Boasting a high percentage of STEM graduates and leading universities, Europe surpasses the US and China in impactful research but lags in converting these findings into marketable innovations.
Venture Science: Similar to scientific methodology, VC requires hypothesis testing and data analysis—areas where scientists excel. By becoming VCs, they can better evaluate and fund deeptech startups, driving innovation and economic growth.
Action Points for Europe:
Policy Support: Encourage universities to introduce venture capital as a feasible career path for STEM graduates.
Industry Integration: Utilise scientist VCs as role models and bridge-builders, integrating scientific methodology into the investment process.
Networking and Education: Address scientists' gaps in business acumen and networking through targeted education and state startup programs.
Overcoming Obstacles:
Business Savvy: Expand education to develop scientists’ interest and expertise in business essentials like planning and marketing.
Network Access: Actively involve scientist VCs in local investment communities and federal startup initiatives.
Cultural Fit: Foster an environment where non-scientific colleagues aid scientist VCs in adapting to venture capital culture.
Building Trust: Established scientist VCs should mentor and support new entrants, establishing credibility within the investment realm.
A Unified Vision: Picture a collaborative ecosystem where scientific founders and investors share methodologies and understandings, countering the trend of 'best marketing' triumphs over data-driven facts.
Read more here
Tech Updates ─by Ralph King (VP & CTO)
Our internal platform is taking shape nicely. We’ve made a few good steps forward since the last update:
- Experimenting with different LLMs, models and prompts to get the right voice in our output (more human, less overzealous attitude and complex phrasing)
- Major work on our RAG pipelines, specifically with indexing and file handling. Given the nature of VC we don’t get portfolio updates in a single, well formatted way - there are board decks, notion updates, blog posts and emails that need to be cleaned, stored and indexed before we can start to ask questions like ‘are there any new asks from the portfolio this month?’. We’ve done some major work to make this easier on ourselves.
- We’ve also had thoughts on our internal platform. As it takes shape and becomes even more useful to us (and maybe even a little bit prettier), there will be certain parts that we decide to open source in future. Let me know if you’re interested in chatting about this!
Asks 🙏
Portfolio Asks
Archangel Lightworks is expanding their photonics and process engineering team in the UK, if you know anyone in the space, let us know.
[REDACTED: ONLY FOR LPs] is actively looking to understand more about the photonic interconnect space (both from technological and business aspects) and welcome intros to engineers, academics and company executives with technical or business knowledge of the space.
GP Personal Updates
After a $435m exit this British engineer went straight to founding a $2.7B chipmaker 🫨
For our community meetup in February, I sat down with Nigel Toon, co-founder of Graphcore, exited founder of Icera, and non-executive director for the UK Research and Innovation body, to find out his lessons learned.
Another community success with Cristina Esteban Pardo, at our combined Frontier Deep Tech + Silicon Roundabout Ventures event.
💡Here are the top 6 lessons from my mental notes after the fireside chat:
1. Nigel started his tech startup journey in a US startup that went public for $80m and then scaled to over a Billion.
He asked himself, "why can't Europe build similar successes?" So he set out to do so in his native UK. Despite a virtually non-existent VC and startup market.
First lesson? Don't be afraid of big challenges.
2. Today the UK and Europe are catching up on early stage investment, but local investors can't yet write large lead cheques at growth stage.
Companies (like his own) still require founders to "jump on a plane" and close global clients and investors, if your goal is to build a true #deeptech Titan.
3. Use early clients to your advantage:
Early adopters who have a burning need for your product can help you develop it before you go mass market.
Getting a US customer is also a great way to win over US investors.
4. AI is a massive revolution, but the biggest winners won't be the ones everyone is chasing.
ChatGPT is like Pacman. It's fun, it's revolutionary for its time, and it's addictive. But not even close to showcase the real power of the technology that enables it.
Infrastructure technologies are more exciting: look at Microsoft investing in nuclear energy and cloud to "milk" the AI revolution with "picks and shovels" supply.
(Nigel recently published a book on AI you should check out!)
5. Great founders don't outsource sales and people hiring until they grow so big they can't handle it anymore.
Forget picking ex corporate people to please VC folks with logos and getting a sales person to win you clients:
It's from those clients interactions that you build your company brand and understand if your tech is really solving a painful problem.
Brand building (including your story and what people remember when you leave the room) and customer relationships are two of the most underrated tasks for a new founder.
6. Pick your investors wisely.
Their network and ability to help you raise the next round, challenge you when you're doing well, give you space when you need it, and be ruthlessly direct when things don't work out, are key to your success.
Make sure you get good ones on board.
Until next time!
Francesco