Today, cultural differences, political divisions, and geopolitical disputes complicate the landscape for investors seeking startups capable of delivering venture-scale returns. Kompas VC has adopted a regionally sensitive investment strategy to navigate this fragmented global environment. The firm has announced a new €160 million fund ($187.5 million) to support this approach.
“We perceive the world as divided into three key spheres of economic and political activity — the U.S., Europe, and China,” stated Sebastian Peck, Kompas VC partner, highlighting their distinct trajectories. Kompas focuses on startups addressing industrial competitiveness issues, from manufacturing and supply chains to infrastructure and sustainability, though the emphasis varies by region.
Peck acknowledged that while themes like AI and explosive growth dominate now, Kompas remains committed to the physical world, particularly startups involved in decarbonization, productivity, and risk management, carving out a niche. This niche, while broad, aligns with trends like reshoring that present growth potential across markets.
With its second fund, Kompas aims to lead early-stage rounds with investments between €3 million and €5 million. Despite global fragmentation, European startups offer opportunities. However, factors like cultural preferences, illustrated by prefab housing’s limited appeal outside Scandinavia, require careful market consideration.
Fragmentation affects various sectors; for instance, sustainability holds sway in Europe but less so in the U.S. Peck notes the dynamic nature of these trends, with shifts often occurring over the 10-to-15-year investment horizon.
For smaller investors like Kompas, this landscape presents both challenges and opportunities. Peck emphasizes the value of specialized, focused funds like theirs in identifying emerging themes and founders in this evolving market.