80 startups, $35M in investments: how ICLUB works
ICLUB is a subsidiary project of TA Ventures, launched in 2018. The idea behind this project was to get more people involved in investing by freeing them from the routine work of finding and analyzing startups. The TA Ventures team took care of all this, and private investors only decide whether to invest or not through ICLUB, which has become a kind of investment club. ICLUB’s representative offices are open in several countries, and the most powerful community is in Kyiv. The editor of AIN.Capital talked to its leader Anton Polieskov about the figures of ICLUB and its work now.
Let’s start with the most important point — what are the results of ICLUB now?
In 2022, 27 companies were invested.
Over the entire period of its existence since 2018, there have been 80 startups.
The total amount of the club’s invested capital is $35 million.
At the same time, our investors have had exits, there were six of them for a total of $8 million. We can’t talk about the investment performance of ICLUB because it’s not an investment company: we don’t invest a notional million in ten startups for $100,000 each, waiting for results. At the same time, there are projects that have done well and multiplied their investment.
We also have two written-off investments. Saying “written-off”, we mean two companies that have already closed down, and we failed to save them. I won’t name the companies, but they worked in the areas of mobility and delivery.
What is the geography of investments?
About 41% are American, and 50% are European. The remaining percentage is a few cases from non-priority regions. These are startups from the MENA region — an Indian company and a Mexican company. Ukrainian ones can be counted on the fingers of one hand (OVO, Liki24, etc.).
In which sector do your investors invest the most?
I have prepared statistics to be as accurate as possible:
Healthcare and biotech are the most popular.
Second place is occupied by consumer goods (direct and consumer brands – companies that create some goods and sell them through their own communication channels, not through retailers).
The third is enterprise soft (B2B software).
The fourth is mobility and logistics.
The fifth is fintech (divisions: insuretech and taxtech).
How much do you invest?
Again, let’s separate TA Ventures and ICLUB.
TA Ventures usually provides $50,000 for pre-seed companies, and at the seed stage — from $250,000.
At ICLUB, the average investment ticket per company is from $150,000 to $350,000.
Did you make additional investments in your projects in the past year? There were a lot of problems for sure.
When a company needs more money, internal investors and funds try to save it first. However, ICLUB will not hold the company alone. If all the investors invest and say we need to help the company survive this period, we offer it to ICLUB and justify it. Funds should reserve part of their capital to reinvest in companies that perform well and support those that are worth to be supported. So if a company is having difficulty raising external funds, we tell ICLUB and explain that there is an option to help it survive the problematic macroeconomic situation and get it to the point where it can do fundraising. So yes, we do offer this option.
Explain to people who have never heard of ICLUB what it is.
It is an organization that helps non-professional and novice venture capitalists understand how to select and check companies before investing and building their venture portfolio.
Our focus is startups: ICLUB’s main value proposal is to reduce risk by co-investing with TA Ventures.
For example, suppose an investor needs venture capital investments as an asset in his portfolio. In that case, he can look for companies on his own, negotiate with them on terms and conditions, and invest on his own. But, like any other asset, investing without competence, without networking in the industry, means that success is very unlikely. Therefore, if an investor is ready to work with this type of asset, the easiest way is to start co-investing with those who know it better.
We do this even as the TA Ventures fund: In most cases, we do not go it alone but with other funds with more experience, capital, etc. ICLUB offers the same to private investors in the chain: enter together with TA Ventures and capitalize on the fact that our professional team has already selected the companies provided to our investors. If we look at the funnel, the startups selected and chosen by TA Ventures and then by a private investor through this filter are much less risky.
It is essential to add that ICLUB only invests if TA Ventures invests. At the same time, the fund self can take risks and invest where we will not lead ICLUB investors. That’s why I’m talking more about those who want to start investing in startups than about ICLUB as an offer for startups — they will go to TA Ventures in the first place.
Here I can only say that our strength is networking. We can introduce you to any foundation and help you with fundraising. In addition, we have a development team in Ukraine and can contact you if needed. Usually, we are a minority investor and not present on the board. We provide funds and do not intrude on operations. Our strategy is to find companies that do not need us.
How much does it cost to participate in ICLUB?
Now, ICLUB has two options:
- You can be a paid member with access to a closed community, events, and a contact person who helps you and answers all your questions. It costs $3500 a year.
- You can join ICLUB online for free (we launched this option in 2022). It will be enough to pass the document verification and get access to the agreements. Such a member pays only investment fees: a 2.5% annual management fee and a 25% carry fee, a share of the profit on exit.
The fees mentioned above are also included in the first type of ICLUB membership, but the member receives a more personalized experience and assistance in decision-making. In the online version, the member reviews the startups on the platform and makes an investment decision independently.
ICLUB used to host offline events for its members. Now they are gone, and the reason is clear. So how do people feel about the events being gone?
ICLUB in Ukraine continues to operate mainly online, as most of the Ukrainian community is not in Kyiv. Therefore, we don’t hold offline events — it doesn’t make sense to do it for the number of people who stay in the capital. However, we can organize events at the request of our audience, more like brand awareness.
We learned that people who invest, and even new people who join ICLUB, are ready to invest without those events. We couldn’t afford it before, but now the topic of venture and venture capital investments has become more understandable to people who join us. That is why there is no need to present a company offline.
Are there many investors who want to invest in startups?
Just look at the statistics: We have grown four times since 2020. Back then, we started by talking about venture capital from the basics. Now we almost always move to companies right away. This is because more people are interested in this asset. It’s just that time has passed. Plus, in the current economic situation, conservative investments bring almost no profit. People are starting to look around.
There are very different investor profiles. The more professional ones understand that we can do due diligence, but we don’t know what will work. But there’s a math — the more you invest, the more likely you will find a “new Facebook.”
This is because there are people interested only in innovation. So they make investments more cautiously but consider them more lifestyle investments to test and check their skills. We tell everyone that nobody could have predicted that the company performing the best right now would be so strong. The profiles are different, but they all share an interest in technology because venture capital investment is a very niche area and attracts people ready for a non-conservative approach.