Dear Friends,
Everyone in Europe and in countries around the world are in shock and condemn the war started by Russia in Ukraine. 3TS and our portfolio companies have helped in the refugee crisis directly or through many direct-aid organizations. In these tumultuous times, we look to one of our core 3TS principles for guidance – Resilience. For us, Resilience means that special ability to focus and execute relentlessly despite intense, unexpected challenges. Growing and building companies is never a straight line. We have been inspired by so many founders, CEOs and their teams over the past few months as they power-through and drive forward.
Here’s to better, more stable times ahead!
The 3TS Team
3TS KEY LEARNINGS
Two years ago, at the start of the Corona pandemic we wrote about Managing Through Crisis & Coming Out Stronger on the Other Side. In one of our Newsletters earlier this year, we covered Stress Testing Your Strategy. In both cases we had no idea at the time what was to come, but we are glad we called out these topics early and ahead of the curve. Both are worth re-reading and consider implementing as we move through an uncertain 2022.
Now, we have to talk about Valuations and Cash Management with 3 Key Learnings around these topics:
- The general consensus from the macro level down to the growth capital market we all live in, is that the Corona pandemic will continue to linger, inflation is running loose, there’s no clear end to the Russia/Ukraine war, there’s a 50/50 chance of a recession and public market valuations have been re-adjusted over the past 9 months.
- Valuations in the public SaaS stock peaked in July 2021 – yes, almost a year ago, and have been adjusting down since then. This is not new news from Q1 2022. Valuations in the private markets like Venture, Growth Capital, PE and M&A will reflect the public market in the near term. Don’t fall into the mirage that the metrics of 2020-2021 are still around, instead, assume they are not. If you need capital in the next 12 months, don’t hesitate on valuation at this point. Don’t risk the company over valuation. Valuations don’t pay the bills, Cash does, which leads to the next point.
- The CEOs number one Job is to never run out of Cash. This is a combination of 3 things: driving revenue, managing expenses and raising capital to fund the business. The only factor companies have control over is managing expenses. If you have 12 months of runway make it 18 by slowing expense increases. If you have <12 months of cash, reduce you cost base and raise capital immediately. Take a more conservative view. If the markets roar back, you’ll have a more efficient business that can grow faster with more capital.
3TS PORTFOLIO & NEWS
Schneider Electric Begins Partnership with Tosibox
With Tosibox, Schneider will enable its customers to protect a building’s technical systems from cyber threats, damage or external harm, while simultaneously enable digital services and functional solutions that contribute to better sustainability, efficiency and flexibility.
Piano Partners with Snowflake to Help Teams Leverage the Power of Advanced Analytics
As part of the Powered by Snowflake program, Piano leverages Snowflake as the cloud-based data platform for its sophisticated analytics tool, making it fast and easy to store, query, enrich and securely share data. The two companies have already started a joint go-to-market initiative that will contribute revenue in 2022.
Rich Media is a Poor Man’s Game, with NEXD
In a world where 80% of shared content is video based, 75% of traffic is on mobiles and attention spans are measured in seconds, brands of all sizes can leverage NEXD’s Lean Video Content platform to drive up engagement and click through rates.
Catalyst Romania Closed New Fund at Hard-Cap
We are proud to announce that our sister fund, Catalyst Romania, which has been backed by 3TS Capital Partners since inception, has closed its second venture capital fund targeting investments in early-stage technology companies. Thanks to strong demand from institutional and private investors, the original target of €40 million was substantially exceeded and the Fund reached its hard cap of €50 million. The Fund will make investments of €1-3 million to high-potential technology companies from Romania and South Eastern Europe to support their growth objectives and international expansion plans. Catalyst Romania Fund II has already invested in two companies and three more are in the due diligence phase. Read more about their plans here.
ITH Offers Ukrainian Refugees Free Flights & Transportation to Connect with Families Across EuropeWe are proud to report that since February 26th, portfolio company ITH, which operates flight booking platforms Vola.ro (Romania) and Fru.pl (Poland), has been providing free flight tickets and transportation arrangements to thousands of refugees to be able to re-connect then with their families in other countries. Great work ITH! Meanwhile, as Corona subsides and travel has resumed, ITH has experienced exponential growth in all of its markets.
MEET THE TEAM
Barnabás Vincze – Investment Analyst, 3TS Capital Partners
Barnabas is Hungarian and he is the most recent addition in the 3TS Capital
Partners team. He completed the primary and secondary schools in his hometown, Pécs. At 19, he moved to Vienna, Austria to study at Vienna University of Economics and Business (WU). Besides having a wide range of business subjects, he specialized in Finance and International Business and graduated among the top 10% of his cohort, in 2020.
After completing several finance related internships during his studies, he started his private equity career at the London based Flashpoint VC, where he participated in several technology, mainly software investments. Throughout these experiences he has developed a versatile skill set including financial analysis, understanding of various business models & industries, communication skills and other operational skills. In his free time Barnabas is doing different kind of sports. When he was younger, he was playing in the first national youth football division in Hungary, as the captain of his team. Besides football, he also participated in athletics, ice-skating and long-distance running competitions, nationally and internationally as well.
Nowadays, he is a gym enthusiast and also playing football with friends, at least twice a week. His other hobby is traveling. He visited more than 25 countries so far and like to meet new cultures and people to broaden the horizon. He is trying to find time for the hobbies between making new investments and working with the portfolio companies.
Favourite quote: “Success is not final, failure is not fatal — it is the courage to continue that counts,” – Winston Churchill
Last book read: “The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers”
GOOD READS & GREAT IDEAS
35 Impactful Questions Managers Should Ask Themselves Regularly – by FirstRound Review
In turbulent times it’s critical for all leaders, from the top to the bottom, of the organization stay close to the entire team and vigilant about pipeline velocity, sales cycles, customer success, product roadmap, etc. Will your business be impacted by a recession? Will buyers slow processes, exert greater pressure on pricing, or look to opt out of contracts? There’s not nearly as much advice on the questions managers should be asking themselves during critical moments.
The 12 Best Personalization Software Options for 2022 – By Hubspot
Its clear personalized B2B or B2C marketing yields better results since it aligns customer experience more closely with the customer perspective. Add that to the fact that you have 2-5 seconds to grab attention and make a first-impression, and personalization becomes key. Take a look and make sure personalization is included in your 2022 marketing plans, especially in uncertain economic times when rising above the rest is even more important.
Traditional B2B Sales and Marketing Are Becoming Obsolete – by Harvard Business Review
For a decade or more we’ve believed and advised our companies that the traditional “sales-cycle” has shifted into a “buying-cycle”, as enterprises of all sizes moved into a “find-try-buy” mode. HBR does a great job outlining the changes sales & marketing must make to align for the future.
JOIN US AT THESE EVENTS
0100 Conference DACH – 31 May – 1 June – Vienna, Austria
SummerSaaS – 9 June – Online
WebExpo 2022 – 10 – 12 June – Prague, Czech Republic
HTGF Family Day – 14 – 15 June – Bonn, Germany, Hybrid
SuperReturn International – 14 – 17 June – Berlin, Germany
CEE Deal Leaders’ Summit – 29 – 30 June – Vienna, Austria