Venture Capital/News/ La Famiglia raises €50m fund with all-star LP backing The Berlin-based B2B-focused investor's backers include Pictet, Mittal, Swarovski, Niklas Zennström and Hanno Renner. By Amy Lewin 12 August 2020 La Famiglia partners Judith Dada and Jeannette zu Fürstenberg La Famiglia partners Judith Dada and Jeannette zu Fürstenberg \Venture Capital Hoxton Ventures to add a new partner in April By Amy Lewin 17 February 2023 Venture Capital/News/ La Famiglia raises €50m fund with all-star LP backing The Berlin-based B2B-focused investor's backers include Pictet, Mittal, Swarovski, Niklas Zennström and Hanno Renner. By Amy Lewin 12 August 2020 If we weren’t all living in a time of social distancing, you could imagine that VC firm La Famiglia might be hosting a pretty standout launch party for its latest fund. The Berlin-based firm, which has just raised its second fund of €50m to invest in early-stage B2B startups, has a fairly unparalleled little black book. For starters, its founding partner, Jeannette zu Fürstenberg, is a hereditary princess — and a member of an industrial business dynasty. La Famiglia’s backers include European industry behemoths like Mittal (the steel company), Pictet (the wealth managers), Oetker (of the baking goods), Hymer (the motorhome maker) and Swarovski (the diamond business), along with stars of the startup scene like Skype and Atomico’s Niklas Zennström, Zoopla and Cazoo’s Alex Chesterman and Personio’s Hanno Renner, and the families behind fashion businesses Adidas and Valentino. And its 37-strong portfolio covers startups from Munich to Paris, Berlin to London. But La Famiglia isn’t all glitz and glamour. At its heart, the firm helps bring together the worlds of tech and traditional (often distinctly unglamorous) businesses. And the opportunity there, says zu Fürstenberg, is enormous. Wrestling with Europe’s giants “If you look at the landscape of European companies, there are so many world leaders in the B2B space,” says zu Fürstenberg: in the insurance industry alone, there’s Allianz, Bayer and Merck. “And if you look at the degree to which digital transformation has touched insurance, it’s probably about 5–6% now. That’s a giant industry that needs to move and adapt its processes — and the opportunity there is massive.” The same is true of the two other sectors La Famiglia focuses on, alongside insurance: industry, and logistics and supply chains, she says. According to a report by Berger, the logistics sector in Germany could add €54bn in gross value through digitisation, while according to a report from McKinsey, industrial sectors have high potential for future digitisation. “These industries are really vast and really deep,” she adds — which means that there are a whole lot of problems to solve within them, right here, in Europe. Old and new entrepreneurs The challenge, as La Famiglia sees it, is getting the startup founders with the bright ideas close enough to the business giants for them to put their tech into action. “La Famiglia was born by the realisation that there needs to be a way for founders to get in touch with leaders and decision makers within specific customer groups, to get quick feedback and to get to market faster,” says zu Fürstenberg, who launched La Famiglia with Robert Lacher in 2016 and now runs it with partner Judith Dada. (Lacher has since gone on to launch his own B2B fund, the Visionaries Club; “We had very different investment philosophies,” explains zu Fürstenberg.) “It’s hard to get the ball rolling [with a B2B startup],” she says; hard to get people inside big companies to answer your emails, let alone pilot your product or buy it. “And it was even more so when La Famiglia started.” La Famiglia’s distinctiveness, she says, comes from its ability to put founders in touch with potential customers from the get-go — through its LPs, or wider network. For traditional businesses, the selling point is that insight into the digital trends which could sink their industry — or help turn it around. “Most of our LPs are entrepreneurs themselves,” says zu Fürstenberg. “They get excited about technology.” “We want to know, is this solving a real pain point or is it a vitamin?” In practice, connections get made between founders and LPs from the start. La Famiglia often calls upon LPs when performing due diligence of a company. “We want to know, is this solving a real pain point or is it a vitamin?” says zu Fürstenberg. “They might say, ‘We’ve seen so many of these solutions; it’s not interesting’ or ‘We don’t see how it would fit in our existing infrastructure’. Others might want to speak with the team straight away.” Those connections — which are one step closer to the holy grail of landing a contract — can be a bonus even for startups which La Famiglia doesn’t end up investing in. But it’s not all about landing contracts, explains Dada. The firm tries to help founders “tap into asymmetric information flows” — meaning, the kind of information that is stuck inside big companies and often hard for founders to access. “Having a conversation with someone who has three decades of experience in an industry — opening their books and their brains — in order to think about strategy and go-to market plans, is also useful,” Dada says. To that end, La Famiglia frequently holds events for its network. There’s an annual ‘unconference’ which brings together around 60–70 CEOs and owners from industrial leaders and startups to exchange ideas under the Chatham House Rule. There’s a portfolio day (taking place online for the first time this year) with panel discussions and pitches. And there are also smaller events, like roundtable discussions on specific topics and fireside chats with industry leaders. Recently, it held a roundtable on logistics, and brought together leaders from Home24, Westwing, Zalando and Conrad Electronics, and portfolio startups Ontruck and Forto. “Our events need to have a sense of intimacy,” says zu Fürstenberg. “Relationships are built on trust.” The land of opportunity La Famiglia focuses on two themes — the future of work and sustainability — alongside the insurance, industrial and logistics sectors. Sustainability, says Dada, is leaping quickly up the list of priorities for industry leaders. “Through the course of the fundraising, I realised how high up the agenda of CEOs [sustainability] is,” she says. “They’re struggling to find good solutions to measure their carbon footprint.” “Sustainability is high up the agenda of CEOs.” “They’re also getting increasing pressure from their stakeholders,” adds zu Fürstenberg. “Where do they source their goods? Are child labour or dangerous chemicals involved? They can no longer justify having that happen.” B2B companies are also affected by the increased focus from consumers on sustainability, she says, even though they don’t sell directly to them. A business which supplies parts to a carmaker, for example, needs to position itself in a way that appeals to the end customer (ie. the consumer) as well. Meanwhile, within organisations, La Famiglia sees “massive potential” in startups which can make the apps and platforms we interact with in our working lives as pain-free to use as those in our personal lives. “Employees are starting to ask, ‘Why is this experience so horrible? Why is this not as easy as shopping online?’” says Dada. Female founders In the landscape of European B2B investors, La Famiglia is unusual in being led by two female partners. Unfortunately, that hasn’t translated into a gender-balanced portfolio — yet. 18% of La Famiglia’s portfolio have a female founder, but Dada and zu Fürstenberg hope to edge that percentage up. “We encourage founders to consider diversity as a key element of their next hires.” “We work with founders to build diversity into their team early on,” says zu Fürstenberg. “We encourage founders to consider diversity as a key element of their next hires [after we first invest]. And we help them get there — as a female-led fund in the deeptech space, we have a lot of women in our networks who are looking to transition into [startups].” “We’re thinking, ‘How can we make this a high-performing company?’ And what’s needed are qualities like empathy. That’s so important when understanding product market fit, and how to position a startup from a sales perspective.” The current portfolio includes Forto, a freight-forwarding platform, Graphy, which makes digital dashboards, Back, a platform to help enterprises manage employee requests, and Alcemy, a software startup which helps cement and concrete producers reduce CO2 emissions. 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