The US consumer market is one of the largest and wealthiest in the world, so the opportunities the US market offers have always been attractive to European investors. But should you set up shop stateside?
VCs like Berlin-based Best Nights VC (BNVC), the investment unit of Jägermeister, say yes.
BNVC was created during the Covid pandemic with the aim of strengthening the infrastructure of the global nightlife industry and, as its name suggests, creating the best nights possible for consumers. The VC’s investments focus on consumer tech that creates an online to offline experience, bringing people together online and building communities, but then routing them offline to create experiences in real life.
“Tech, lifestyle innovation and consumer trends are mostly coming from the US,” Lorrain de Silva, managing director at BNVC, tells Sifted. “The US is a global tastemaker by definition, spearheading and leveraging culture and trends. This applies to music, fashion, food and tech.
“Regardless of whether it originated in Europe, it comes to the US and then goes on to become a major worldwide trend. Electronic dance music (EDM), for example, comes out of Ibiza or Berlin, goes to Miami and LA and then comes back as a mainstream trend. This is something that we really like,” he adds.
A springboard for global success
The ability of the US to propel consumer tech startups onto the global stage is what makes the market so attractive to investors. With BNVC focusing on startups in the nightlife sector, de Silva says building a presence in the US was an obvious move.
After having screened more than 400 US-based startups and investing in five of them, we have built a portfolio of 35% US-based startups.
“Los Angeles and New York always have and always will be cultural hotspots with strong potential for the creation of entertainment, music and consumer trends,” he says. “This meant we always tried to screen and find business models from the US operating in that space. After having screened more than 400 US-based startups and investing in five of them, we have built a portfolio of 35% US-based startups.”
To build on its US success, BNVC will host its ‘Best Night in LA’ networking event in Los Angeles on October 23, merging the startup tech scene with culture and nightlife. The guest list includes BNVC’s portfolio founders from both the US and Europe, industry experts from the entertainment and nightlife space and like-minded investors with a passion for consumer tech and nightlife innovation.
“In our half office, half gallery space in Berlin, we host talk panels where we invite founders, investors and tastemakers from the industry to speak about the challenges of the sector,” says de Silva. “They’re interactive sessions where people find inspiration and collaboration opportunities — and this format will take place at our Los Angeles event with a panel discussion and DJs.”
Mutual benefits
Working with a European VC with a growing US presence can have significant benefits for portfolio companies, too.
Alex Brees is founder and CEO at Un:hurd, the London-based startup whose data-led tool supports music marketing and promotion for independent artists. As a portfolio company of BNVC, he says the VC’s growth in presence in the US is timely given it is Un:hurd’s biggest market.
“This is because investors there speak their language and understand the potential in a different way.
“We have over 40k artists in the US, so we are looking at ways in which we can reach more partners, investors and, of course, artists,” says Brees. “Doing this alongside BNVC also expanding into the US expedites our growth strategy, with a great example of this being invited out to the BNVC US event in October.”
De Silva says by extending to a US presence, European VCs give their portfolio companies an extra boost for finding further investment.
“For our European portfolio with their niche approaches – because entertainment always will be a niche approach within venture capital – the chances of securing follow-on investment in a Series A or further are higher in the US,” he says. “This is because investors there speak their language and understand the potential in a different way.”
Sourcing capital from Europe as well as the US means more access to new funds and opportunities
The benefits of a European and US connection is beneficial for US startups, too – especially for portfolio companies of VCs with a specialism, like BNVC.
“Knowing a VC has a specialism in a key area is appealing — it means they can provide insights, benchmarks and resources to unlock faster growth,” says Jennifer Lewis, CEO and cofounder at Lex, a queer social networking app and BNVC portfolio company.
“For us, it has helped expand Lex’s investor ecosystem,” she adds. “Sourcing capital from Europe as well as the US means more access to new funds and opportunities — and it also can help with insight on the ground as we roll out to new markets.”
Read the orginal article: https://sifted.eu/articles/european-vc-in-the-us-brnd/
