Seedcamp is most easily described as Europe’s Y Combinator. It provides seed investment of up to €50.000 in exchange for 8 to 10 percent of the startup in question. Seedcamp stages events all over Europe which culminate in 20 or so companies being selected to participate in Seedcamp week in London.
Following an investment, the companies spend three months in London working with mentors to develop their product. Erply (received funding of €2 million) and Zemanta (received funding of €2.35 million) are among the most successful investments made by Seedcamp in its three-year history.
Since Seedcamp launched, it has received over 1,500 applications but invested in only 21 teams. This makes 2010 a bumper year, with 12 investments being announced at this year’s Seedcamp week. The selected startups tackle problems from providing real-time fashion intelligence (London’s EDITD) and monetizing video content from experts (Tel Aviv’s Sparkeo) to automated software testing (Albia which is based in Bosnia-Herzegovina). The full list of companies is available on Seedcamp’s web site.
I talked to Seedcamp’s CEO Reshma Sohoni about investing in Europe (she is American) and how the startup scene has evolved since Seedcamp started. Her first observation was that the European startup scene was very fragmented in comparison to the US, in terms of the physical locations of the companies and where money is available. As a result it took longer for startups to raise funding. To put that in perspective, the European Union alone has more than 500 million citizens who speak 23 official languages. In the intervening three years, the scene has grown and coalesced around startup hubs like London, Berlin and Copenhagen.
In terms of this year’s Seedcamp applicants, many more of the companies who applied already had revenue. This gives them a head start on Seedcamp’s ideal trajectory of receiving an external investment of €250,000 to €1 million within 3-6 months of receiving the Seedcamp investment.
When I asked Reshma what surprised her most about investing in Europe, she said that she is impressed by the product management and technical talent available in Europe but still struggles when it comes to instilling the same commercial drive in Europeans that you see in US-based startups.
The next step for Seedcamp is to increase the number of investments made per year and to widen its geographical reach. Seedcamp events are planned this year in Asia, India and South Africa. The fund also intends to work more closely with corporations. IBM’s Smartcamp is a Seedcamp “clone” focused on entrepreneurs providing technology for a smarter planet.
Getting content noticed is a challenge for everyone making apps. We’ll cover the topic at DiscoveryBeat 2010. Startups and big companies alike should consider entering our Needle in the Haystack discovery business idea competition. Early bird discounts are available until September 22. Sponsors can contact us at firstname.lastname@example.org. To buy tickets, click on this link.