SeedBlink Blog

For the following lines, we asked him about their investment thesis, strategies, criteria and what they look for in a startup.

Can you tell us more about Fortech Investments' investment philosophy and strategy?

In short – we are a strategic partner for early-stage founders, not just an investor. We work closely with them, so they reach their goals fast and sustainably, especially in today’s landscape which doesn’t favor the “growth at all costs” approach, as in the past few years.

Our focus is on a few industries where we have expertise (software, business AND industry expertise). This allows us to understand the requirements and specifics of each industry at a deeper level, meaning that the founders can benefit from the economies of scale – lessons learned from other start-ups from our portfolio or from our extensive network of professionals, investors, companies etc.

How does Fortech Investments evaluate potential investments, and what are some key factors you look for in a startup?

Well, since we invest in early-stage start-ups, the focus is on the founders, followed closely by the rest of the team (or the capabilities of the founder to build the right team). It is best if they are in one of the industries we target so we can provide the right support, but we’re not limited to that.

We get an initial overview of the start-up in terms of market, to see if it’s big enough, both from the top-down and bottom-up perspectives. We use a custom tool developed by our sister venture company studio that helps our investment analysts to better understand (in a structured format) what startups are doing differently from their competitors and the initial market research based on their landing page, using AI technology.

Then, we look at the product itself and the financial forecasts. For those that have recurring revenue and a forecast for at least 2-3 years, we use another custom tool in which we input the key financial and growth parameters to see how feasible it is for the start-up to reach the next milestones required for future rounds.

What are some of the biggest challenges that early-stage startups face, and how does Fortech Investments support them through these challenges?

The biggest challenge I think is the fundraising itself. It’s tough, especially for early-stage start-ups to sell before they have any revenue. To help them, we make intros to our network of potential enterprise clients or even other VCs which are a better fit (in terms of industry or stage). Since we are partners with many local initiatives and programs that help start-ups, we also recommend those – accelerators and whatnot.

In the last 5 years, you helped over 13 founders reach their goals with over 4 million Euros. Can you provide an example of a successful investment that Fortech Investments has made in the past, and what made it successful?

Yes, three examples come to my mind right now, out of the investments that are currently public.

Telios is one of them, a company we’ve been close to for a long time now. They are constantly growing, reaching their milestones and they are about to open a physical clinic, which is a huge achievement for them.

Another one is Licenseware, one of the most promising Romanian start-ups, according to a recent article I’ve read. They raised three rounds from us so far and we’re really impressed with what they’re doing. They know their industry very well and they’re doing a great job at solving its inefficiencies.

UpLyft, a US start-up from our portfolio has great impact with their medical devices and they have a noble mission. They had an impressive backlog of pre-orders when they raised from us and now they are out there in front of the customers, whose lives they are truly changing.

You recently invested in Synaptiq, a MedTech startup involved in optimizing oncologic X-Ray. Why you chose them?

We are interested in the healthcare industry and Synaptiq is working to innovate an area that is extremely important – cancer prevention. At the same time their solution is highly beneficial for those who use it, helping them automate a very labor-intensive process with AI. There are not many radiologists out there and Synaptiq’s solutions really allows those few ones to save more lives by reducing 2-3 hours of work to a few seconds.

Of course, we know them, they are local and they are all experts in their domains. They have built a strong team with the right people and that is one of the biggest factors for their future success. They have also balanced scientific research with the technical aspect which is essential in health start-ups.

Their achievements so far speak for themselves. For example, the imminent clinical trials and the future customers waiting for the certification to start using the solution.

On the official website, you emphasize on your post-round support, that positions Fortech Investments as an operational VC. How does Fortech Investments work with startups after making an investment, and what kind of support do you provide to help them grow and succeed?

Yes, we like to call ourselves strategic partners for founders. We started as a CVC, but now we are independent from Fortech, which became a GlobalLogic company. At first, we counted on the technical expertise of Fortech and the industries that they were focused on. We now have Fortech Products, which allows us to offer the tech-for-equity option for founders, helping them build software and save a lot of time that would be spent finding the right people with the right skillset, seniority etc.

Our roots also enable an extensive network of partners in the industries we focus on (potential clients, investors, other key players) which mean partnership opportunities for expanding in new markets or other intros. They also offer support and feedback whenever needed.

Now, with several investments in our portfolio, we also have the experience of working with other start-ups, meaning that we can use the learnings to help the new founders in our portfolio with insights, growth strategies and other valuable support that helps them navigate their lifecycle successfully.

What industries or sectors are you particularly interested in investing in currently, and why?

Healthcare, Manufacturing, Energy, FinTech, Automotive and Real Estate. These are the industries where we have the most expertise and where we can provide the most support. This is actually an important criterion for us when choosing the start-ups we invest in, especially when they are very early stage. If their needs are in tune with the additional support we can provide, that is even better.

What advice would you give to entrepreneurs who are looking to secure funding for their startup?

It depends. There are various pieces of advice for various situations. But a general one would be to focus on the problem they are solving. Focus on a problem that is big enough for the solution to be feasible and please don’t build solutions and then look for problems. That means that they should not be biased and listen to the feedback from clients.

Another tip for fundraising – even if they don’t have customers, letters of intent help a lot. Show to investors that clients are interested in what you’re selling, even before you’re selling.

What qualities do you think are essential for successful founders, and how do you identify these qualities in potential investments?

I would say that we’re looking for outliers and founders that break the patterns, but most investors say that. Well, we ARE looking for outliers but those that are also grounded in reality and in their markets. Being a visionary is good, but execution is even more important.

Founder-market fit is essential and for that, they need to have real expertise in their domain, not just in business. They also need to be adaptive, flexible and open to feedback. Of course, chemistry is important, since we’re all human after all. We need to get along as people, business partners and, why not, friends.

Key takeaways:

• Fortech Investments invests in Healthcare, Manufacturing, Energy, FinTech, Automotive and Real Estate
• They recently investment in Licenseware and Synaptiq
• Founders, team and market size are important aspects in their investment thesis