EdTech Angels: We want to feel engaged & energized
Guest: Anette Bø Andreassen is an angel investor and Partner at Sagene Tech Ventures, a pre-seed venture fund based in Norway, investing in early-stage Edtech, Prop-tech and Creative tech. She is based in Oslo. She is also COO at the startup Unifractal that is combining visual search technology with user manuals & training.
The full transcript of the podcast can be found below for those who prefer reading rather than listening.
Why did you start investing in EdTech?
It's because, I have worked in technology for a while. And we were a group of people who are both related and have worked together and built companies, sold companies, learned a lot of stuff from our mistakes.
And also, I guess, some good experiences there has also been. We wanted to help out in that kind of difficult, what we called value of death stage. So, Sagene Tech started back in 2016 and back then there weren't that many organized angel investors about, or at least not that visible.
I mean, you had the sort of venture capitalists, but we saw the possibility to get this sort of co-investment fund, from what is now called Investinor. And that we could actually do a job together with them based on our network. That's why it started, actually at Grisen, which is this sort of bar, bistro restaurant at Torshov, Sagene in Oslo. So our mandate is sort of written on a napkin somewhere. That's how we came about. And personally I do see the value of just helping out and using whatever competence, what I know, what I contribute with and the people I know that can also be involved.
Tell me a bit about the various components of the fund. What types of companies do you invest in?
We, we say it's creative tech, some prop tech, EdTech. The way we choose it is based on what we know something about.
So we need to feel that we can contribute and that we can go in and be part of the board. We will not invest in something where we cannot contribute or we do not know anything. So that's where we are. We are very active investors.
And if you look at EdTech specifically, what do you believe in within EdTech? And, maybe you can tell us a bit about the investments you've done so far?
We do believe in you know, engaged teams. So, I mean, I've been working as an agile coach and everything that can engage students and that's easy to use and it's also easy to scale. So we will look for technology and solutions that are scalable outside of Norway, of course.
Otherwise we're quite eclectic in terms of what we are looking for. It could be apps for voting in municipality elections. It could be technology for putting AR in teaching or school books like Ludenso which is our latest investment, or now the Unifractal platform for several markets for nurses in working in hospitals.
So it's not one particular group, but something that's scalable and creates engagement and that is useful potentially in other markets as well.
And today, what is the share of EdTech in the portfolio?
I believe it is about half. And that is also based on who approaches us most.
There are of course a lot of great EdTech ideas out there, and I guess we also have some experience with that in the team. So, that's where we also feel a bit confident.
And if we dig a bit more into EdTech and why, you mentioned that you support strong teams. Are there specific things in terms of the impact that these companies have within EdTech that you think is really important? And do you look at impact versus the business potential to say that it's so important that we invest in this for the future of kids or education that we can lower the expectations in terms of business outcome?
We're not that big, so that we feel like we have a lot of margin to kind of spend on all these more, heart projects or philanthropy projects. I have done something on the side. When there are projects I feel strongly about. So that's basically how we solve it because those projects where we see there isn't like a really good business potential, but we may create some important impact for a certain group of people.
Sometimes, and with some of us doing it, just like with some funds, we feel we can lose to be honest. As Sagene Tech and as a team, I believe the business potential is quite relevant. I would say it's like a 30 / 70 with like a most heavy part on business.
And do you want to say anything about the investments you made on the personal side?
We've been in Otovo for example, that's solar panels. And also my good friend Agnes Árnadóttir in Brim Explorer, who makes electric boats for silent whale watching.
So it's a bit more about green tourism and events with short travel products. That's something I care about and I'm also very interested in the potential in how can fauna coexist with our technology. Because, I do like vet tech and all that kinds of things, but that is not something Sagene Tech as a group focuses on. But that's sort of where my heart lies.
If you dig a bit deeper into the investment thesis, how do you position yourself? In terms of focus on you are mostly on pre-seed, but do you also lead the round and what's the ticket size and things like that?
I believe we can take lead on getting the round organized. Mostly not, but it is possible. Normally we have a ticket size of a hundred thousand euros. Then it's 50 / 50 Investinor and our own funds. Sometimes we actually do buy what we call like a ticket to ride, like a smaller ticket.
And if we don't really know where this is going or we don't feel like we have a lot of confidence, then we may do like smaller tickets as well. But that's where we are. So I don't feel that we are most of the times, we're not the biggest investors.
And then we are also very keen on trying to pave the way for finding the bigger investors later on so that we mostly, we do like one investment. And then we try to have the dialogue with the bigger investment companies. And players to get like a good progress and get it to the next level.
And in terms of geographic reach, do you focus on Norwegian companies exclusively?
Yes. Based on our mandate, it has to be Norwegian registered companies.
So a foreign company could set up their branch in Norway and that would be okay?
As long as it's registered basically. This is something we will do an evaluation of based on; are they easy to collaborate with? Do they understand this market? So that has never happened, to be honest.
One thing I wanted to dig more into is your role as the COO in Unifractal. So, how did that come about? Because it is also a part of the portfolio, right?
I was actually part of doing the due due diligence, together with Fyrin, which is an investor network in northern Norway.
So, Sagene Tech invested together with them in Unifractal almost two years ago. And, so then I got to know the team. And at that point I was a consultant working with digitalization in big corporations. And, I felt the need to work a bit closer to team and a bit closer to product because even though it's very interesting and exciting, digitalization processes there tend to be long, there are a lot of politics and I really wanted to go back to basics.
I also wanted to feel what it's like to be on that side of the table also to be a better investor. Really, and I felt I had something to contribute with. And so the team actually asked me if I wanted to be part of Unifractal in some capacity. So I started in a smaller role. And then from June, I've been the COO.
So that's very exciting and frustrating and all the feelings and experiences that every startup person knows about.
And maybe just for the promotion of the company; what makes you most excited when you look at the product and the team in Unifractal? Because we are talking about EdTech here as well.
It's, you know, day to day. I think it's the experiences that you create for the users. What you experience when you are working with the pilot projects and those who see the value. Of course it is good to know when you create something for students, young people who are interested in the visual search, when you can simplify a day for a nurse at work.
And there's also so much potential in other markets. I'm very sort of end user oriented. So, everything that has to do with that is really energizing. And also, working with the team, although most of them are now in Tromsø, they're very, self-driven and motivated.
Yeah, that really helps. And I learn a lot because a lot of them are way more tech savvy than I am. I wasn't really very skilled on machine learning or visual search or anything like that before I started. So, that's very interesting.
So let's move over to the lessons learned from talking to startups. What advice would you give startups when they're looking for investors, especially in this pre-seed stage?
I was actually thinking a bit about that earlier. Because, I would I would advise to first; it's, good to of course check the Shifter lists of the kind of investors are out there.
And also for me as an investor, it's really good to have recommendations from other startups. So if someone knows me, it's better to, or I've been in dialogue with them before if you just send me an email or tell me about someone that should talk to me.
I think that's a really good way to contact someone, because then I know that you're in the startup scene and that you talk to other people. I think that's a good approach. And also to be at events. It could be something organized by Startup Lab, it could be Vekst & Vinyl or something at Oslo Innovation Week, or any of those more organized startup environments and just be there, talk to people and approach investors. Also because I think you learn something new every time you pitch your company and you get new ideas and you figure out who likes your tune and not. Because you need to find that person that you want to collaborate with for years to come.
And at Slush now in Helsinki, I think I heard a talk when one of the companies said, okay, when you look for an investor be sure that this is something or some person you actually want to have dinner with. Would I like to sit down and have dinner with this person? If not, that person should not invest in me because you are going to spend a lot of time together. So it has to be like a really good collaboration and you should really like each other. So just spend some time on it basically.
And when you think about that, if you flip the coin and say, these are the worst stories or the worst approaches that I've had. Does anything come to mind like, okay, don't do this when when looking for investors?
I think it's that call you make and you say, okay, so here we are and this window closes in two days so that you create this sense of urgency for something I do not know anything about. So I'm supposed to feel guilty or bad for not investing in you or making me feel stressed.
I think that is the worst. You know, a lot of pre-seed or angel investors, we have day jobs. So this is not all we do. And it's, a sort of time consuming and expensive hobby. So I mean, we don't need that. We want to feel engaged, we want to feel energized. That's important.
You mentioned a bit about it already in terms of approach. You said getting essentially a warm intro is the best way to contact you.
I think of course, sending a short deck or a pitch. This is us, on email, perhaps making a follow up phone call. Of course on our webpage we do have, a picture of us or the team sitting at, of course, Grisen, this bar. So we prefer to have the meeting down to earth not in a meeting room, just getting to know each other.
So, I believe Ludenso that we invested in last did that really well because they sort of just sensed our persona, tapped into our culture and really got to know us early, just invited for a beer in the nearby bar. And that kind of eases the rest of the process in some way.
Of course, we will, do a thorough due diligence, but then we already kind of like you, so it makes it easier. And I mean, we will of course call the other investors who they say are interested. That's very important. To know that investors talk with one another, so don't lie, because we will figure it out.
But, I mean, we do like to keep it very down to earth. And then do like continous follow-ups because it may be too early, that it is not the right time for that particular investor. But, then just keep us in the loop, send us updates about what's new. So then at some point we will, want to invest in you.
And what you mentioned in terms of approachability is interesting because what we hear from many founders is that they send their pitch and then they never hear anything back. Do you think that you have an edge because of that? Is there something in there that makes you different from other types of investors?
We do want to answer in some way. We do want to provide you with perhaps a better option like some sort of feedback.
We aim to do that and we also aim to forward you to other investors that we feel are better and say that we may not be right for you, we feel that we can cannot contribute to you. That is very important that you also as a founder that you find the right investors for you and that you're not that kind of preoccupied with the thought of getting money because you want smart capital at that stage.
I believe we will be able to guide you a bit in terms of that. And also sometimes I just get the deck and I forward it to other people. I'm part of other networks, that I sometimes, view cases together with. And at least in Oslo it's the same pitch decks that are forwarded around.
You just need to find that person who really kind of sings your tune. And then create some buzz, because once you create some buzz and then several people are talking about you and you get forwarded the same deck from different channels, then you're sort of onto something and then you create this rumor that around town that this is happening. And then we are suddenly driven by fomo, fear of missing out. And that's the sort of sweet spot for the founders when you get to that stage because then it's like bees to honey, you know?
Final question. Difficult climate for everyone, both on the investor side and the founder side. What should founders think about when they are looking for funding in these times?
As I say, find the right investors and cultivate them. And sometimes it could be also other kind of industry companies who have all these kind of venture brands. They could be really helpful. So talk to them. Also, like Lyse Vekst, those kind of players. Also show that you have the ability to bootstrap or able and willing to sacrifice something. Because there are a lot of people out there wanting money at this point.
If it's a bit slow and you're not able to kind of stick out, then you should perhaps scale down a bit or at least show that you have the ability to focus on the most important things. And also you need to show what you are going to spend the money doing.
So, if you're asking for a certain amount of money, you need to show them or show us that this is money well spent. We have a plan for how to use it, and we know what this will contribute to. And then there, I guess it's debated whether it's more necessary to show a certain ARR at this point.
Like half a year ago it was more about the amount of users, and now it's more about revenue. So that is something also, perhaps you are able to scale a bit down or focus on revenue, and then it's easier in this type of market to have a good story of course. But, also have a good pitch, very standalone pitch deck, because you cannot, as an investor, spend more than one minute or two minutes to really understand what you're trying to do in this type of market because, you won't keep our attention. There are too many pitch decks going around.
