How VCs are adapting to meet an increasingly global startup market

How VCs are adapting to meet an increasingly global startup market

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As the startup industry has expanded to span every location, TechCrunch’s recurrent coverage of venture capital trends has taken on an increasingly global bent. As a result, we are extending our coverage of India’s startup ecosystem, as well as our focus on companies on the African continent. It is difficult to keep track of everything with so many businesses raising so much money. Nevertheless, we are not the only ones keeping an eye on the nascent technology businesses that are adjusting to the new global startup realities. Likewise, venture capitalists are.

In recent years, we have seen VCs restructure their operations to better suit a flat world for technological innovation. Larger funds with more partners, for example, or the formation of country- or region-specific funds, might help to distribute attention. White Star is an example of a business with a broader emphasis. The startup capital firm just closed its third fund, a $360 million vehicle, and TechCrunch recently interviewed founder Eric Martineau-Fortin. Instead of discussing values or sectors, we largely discussed regions.

Martineau-Fortin is a resident of Guernsey, a tiny island halfway between France and the United Kingdom. The investor’s location between two major landmasses is appropriate, given his firm’s inaugural fund concentrated on the United States and Europe, with assets roughly divided between the two. White Star’s second fund broadened its geographical scope to include a small Asian component. According to Martineau-Fortin, the group’s third fund will distributed about 40/40/20 across America, Europe, and Asia.

The company, for example, does not actively seek the Indian market. Given how much money is moving into India, this stuck out, but White Star focuses more on the South Korean and Japanese markets, allowing it to invest in Asia more widely while avoiding India. Martineau-Fortin and I got into a discussion about other markets. He spoke highly of both Brazil’s startup sector and Mexico, which comes as no surprise given Nubank’s impending IPO. Simply said, even investors who not focused on Latin America recognize the venture capital industry there.

Despite some flattening, the global venture market remains unequal. According to CB Insights, overall VC activity in the United States reached $72.3 billion in Q3 2021. A total of $50.2 billion spent in Asia. Europe received $24.2 billion, but Latin America received just $5.3 billion. That indicates that for the investor ready to add new time zones to their portfolio, there is probable arbitrage. White Star may divide its investment concentration into thirds in the future, focusing on the United States, Europe, and Asia. I am curious whether that will become a typical time split; After all, the internet is everywhere at the same time (with the exception of North Korea, China, and a few other markets), so why not invest in firms that are, well, everywhere?