If a high-flying European startup like Revolut would like to find for itself a great lead investor for its Series A most likely Balderton Capital is on the shortlist. General Partner Daniel Waterhouse is working with a few Finnish investments and has personally followed Finnish scene since working on Yahoo’s investment in Sonera’s Zed back in 2002, hence we talked with him what excites him the most in Finland and where he sees the largest challenges.
In 2014 Daniel Waterhouse joined a few other investors to put $800,000 into a Finnish startup on the day it was incorporated.
Investing that kind of money at the day of incorporation is quite unique for Northern Europe, but what makes the investment into Curious AI even more unique is the fact that Waterhouse is a partner at Balderton, the largest European VC fund focused on European-founded startups at Series A.
Today, Waterhouse works with two Finnish companies as Balderton has backed also TrademarkNow, and he travels regularly to the main startup events in the country – keeping a finger on the pulse of the developments of the local startup world.
“The Finnish ecosystem is very interesting, there is some really amazing technical heritage here, and that is why it is pretty interesting breeding ground,” Waterhouse said in an interview.
Waterhouse agrees it is rather unique for a large VC fund, even for an early stage fund, to invest at a day of incorporation of a startup. He said he found the Curious AI team from two directions at the same time – a Balderton analyst, who was investigating how to build algorithms for the investment firm, came across CEO Harri Valpola at the same time when Timo Ahopelto from Lifeline Ventures, who had worked with Harri before, introduced him to Waterhouse.
“I found Harri and his business so compelling that I decided to invest earlier than we usually invest,” he said.
Founder of Curious AI combines domain expertise and business experience – combining 10 years of top academic AI research with 10 years entrepreneurship background.
Going well beyond AI we know
What makes Curious AI unique in the field of all those AI companies?
“AI is a buzzword and in reality 95 percent are using very well-known, rather generic machine learning techniques which frankly have become a commodity by now,” Waterhouse said.
The deep expertise of the core team allows Curious AI to go much deeper in its long quest to teach machines to learn by themselves – to train unsupervised learning algorithms. “They have made breakthroughs in creating the building blocks for what will be a step change in the scope of problems that future AI solutions will be able to solve,” he said. “That gets us excited about Harri and team — solving those existential problems in this area.”
In September 2017 Balderton, together with a number of investors, including Court Westcott and Jaan Tallinn, invested $3.675 million in further development of The Curious AI.
Chasing technology-driven growth opportunities
Waterhouse said Balderton typically invests in Series A of the company, with Finnish investments underlying its deep technological expertise, and focuses on helping them grow.
“We are with some of these companies quite a long period of time to help them from proof of concept, initial market validation, to building a big company,” said Waterhouse.
In May 2014 Balderton led $3.5 million A round into TrademarkNow, Helsinki-based one-year old automated trademark search and risk analysis company, founded by Mikael Kolehmainen, a former trademark lawyer. “The trademark industry has been ripe for reinvention for many years, having failed to keep up with the technological change and innovation that we are seeing across the rest of the enterprise software market,” Waterhouse said at a time.
With Waterhouse’ strong belief in the Finnish startups it takes a minute when we ask him about main challenges Finnish companies are facing.
“The potential challenge for companies in Finland is maybe around experience, nothing serious – people working internationally and selling internationally, there is a smaller pool of them. You have to work hard to really scale your commercial team, to build a global business and the global mindset, and working with more entrepreneurs who are doing it again – that’s a work in process as well,” he said. “Overall, we are really excited about technology in Finland.”
- Who:General Partner at Balderton Capital, investor in Curious AI and TrademarkNow in Finland.
- Education: PhD, Mathematics; University of Oxford.
- Experience: General Partner at Wellington Partners, Sector Partner at 3i Group, corporate development at Yahoo!
- Birth: Founded in 2000 as a European arm of Benchmark Capital, which is known as an early eBay-backer in late 1990s.
- Story: Balderton has raised $2.6 billion, and invested in over 100 companies, including Betfair, MySQL, Bebo and Revolut. First invested in Revolut as part of its seed round in 2015 and then led their Series A.
- Focus: Balderton backs breakthrough technology businesses with focus on Series A.
- Headquartered: London
- Connection to Tesi: Tesi has invested in Balderton Capital V L.P. and VI S.L.P. funds.