1) What sort of opportunities does P101 target? 
Giuseppe Donvito
P101 is an early and late-stage venture firm based in Milan (Italy) that invests mainly across Europe in fast growing technology companies with ambitious and strong management. P101 team’s strong technical background and entrepreneurial and operational experience are crucial and supportive for our portfolio companies in terms of value generation and growth acceleration.
The firm focuses on digital and technology sectors generally, including B2B software (AI/Big Data, cybersecurity, fintech), health-tech, consumer (marketplaces, e-commerce), and ed[1]tech.
If you have a startup in one of these areas, we would love to chat!
2) Why is P101 interested in cloud-related investments?
According to Gartner, cloud penetration is rapidly expanding: cloud computing spend was 105 billion dollars in 2015 and will be 848 billion dollars in 2025. In 2021, cloud spend is expected to represent approximately 20 percent of the 842 billion dollars overall infrastructure spend.
The cloud has standardised, compute capacity has increased, and the sophistication of machine learning models have improved to the point where innovation is being unleashed in emerging areas such as crypto, biotech, and fintech.
Emerging technologies such as containerisation, virtualisation and edge computing are becoming more mainstream and driving additional cloud spending: the pandemic served as a multiplier, for CIOs’ interest in the cloud and SaaS model were resilient during pandemic.
The shift to remote work and distributed teams will continue to drive innovation on a global scale.
According to CapIQ data: the average IPO valuation has increased ten times over the last ten years, and there are more software infrastructure companies worth over 10 billion dollars today than ever before; the median valuation for a public software-as-a-service (SaaS) company in 2010 was three times forward revenue; now the figure is 15 times forward revenue, with many companies trading above 30 times next-12-months revenue.
There’s a much better understanding of the SaaS business model today, with more than 40 public SaaS companies each generating north of 500 million dollars in revenue a year and 20 companies generating over 100 million dollars each in free cash flow.
3) On the cloud front, what subsectors has P101 explored?
Let’s start from where we have invested; these are our existing portfolio companies:
Opyn (https://www.opyn.eu), The Leading European Embedded Finance Platform focused on LAAS (Lending As A Service). Opyn has created a hassle-free, all-encompassing solution for SME financing, intuitive and customizable platform solving pain points for both lenders and SMEs.
Cyberguru (www.cyberguru.eu), a leading cloud Cyber Security Awareness Training platform. Founded in 2017, Cyber Guru’s mission is to increase employee knowledge around information security. Despite the advancements in cybersecurity technology, the “human factor” is still one of the primary vectors cybercriminals use to attack an organisation. According to the IBM Cost of a Data Breach Report 2020, 24 percent of data breaches are caused by human error, costing 3.9 million dollars on average to remediate and 280 days to resolve.
“The shift to remote work and distributed teams will continue to drive innovation on a global scale”
Appquality (www.app-quality. com), the leading crowd-sourced cloud computing platform. Since 2015, AppQuality has been helping enterprises improve the quality and the UX of their apps, websites, chatbots, IoT devices, e-commerce platforms, and cybersecurity, through the Crowd testing methodology. This innovative method brings real end[1]users and bug finders into the development process by making them the testers of companies’ digital products. The quick, reliable and uninfluenced feedbacks of the testers are collected and analysed by the AppQuality team, then translated into actionable to-dos to the clients’ marketing and dev teams.
Wonderflow (www.wonderflow. ai), leading European Voice of customer (VoC) analytics platform. As an advanced feedback analytics solution, Wonderflow works by collecting customer feedback from hundreds of sources [including online reviews and support centre records] and analyses them in a single place with AI and natural language processing and predictive technologies. The platform can detect product or service issues among the millions of online reviews, make predictions of outcomes based on VoC data, offer suggestions for process improvements, and much more.
In the last years, we have analysed several companies in the sector. We don’t have specific “infatuation” with one or more subsectors; we do our Due Diligence and when we find the right target we invest. We like recurring and highly predictable revenues of course.
4) What advice do you have to founders in the cloud space?
• Try to stay humble and really understand what having a VC in your cap table means. The cloud sector is growing significantly and there is massive fragmentation; this can lead to high competition, so in order to be attractive for a VC, startups need to tackle large markets or multiple markets
• If you are in B2B the risk of long sales cycles has to be managed, both from a business standpoint and financially
• Don’t fall in love with your product; always challenge all the assumptions and understand where the product-market fit is!
• Networking is crucial: with corporates, other startups, investors, M&A, banks, etc. Try to capture the latest trends, who is who in the industry
• If you are venture-backed don’t be shy to ask your VC for help in any shape or form (M&A, hiring, operation, etc): I personally love to help founders and add value where I can bring missing skills
• Give priority to highly recurring revenues so your business can be predictable and stable
• Build your equity story but be ready to add something new as the cloud space is in continuous evolution
Like other software industries, the cloud sector is evolving and several trends are impacting it. As founder, you need to foresee these trends, as your company can be disrupted by other startups.
