Base10 eyes more deals in non-US markets

The San Francisco firm announced its first investment in India last week and is nearing the final close on two deals in Africa.

Chris Zeoli of San Francisco-based Base10 Partners says he has recently spent a lot of late nights and early mornings talking to entrepreneurs in other parts of the world.

The results paid off with the announcement last week that Base10, which was founded just four years ago, had made its first investment in India by backing business process automation software developer SaaS Labs. Base10 led the $17 million Series A funding round, which also included Eight Roads Ventures.

SaaS Labs was founded by Gaurav Sharma in 2016, and Zeoli notes that it is growing in annual recurring revenue and profitability. He says the firm was already looking into investing in the space when its research brought them (virtually) to India, where it found SaaS Labs.

Zeoli says Base10 was the first venture firm to contact SaaS Labs, which had been bootstrapped until then. Base10’s Series A term sheet was the first the company had ever received.

VC Chris Zeoli Base10
Chris Zeoli, Base10 Partners

“For the scale that SaaS Labs is at, any company like it in the US would have gotten a bunch of term sheets already,” Zeoli tells Venture Capital Journal. “This shows that if you have a global perspective and look where others aren’t looking, you can find amazing entrepreneurs.”

Although Zeoli has not been to India in person yet to met Sharma and the company, he says he is planning to visit within the next of couple of months if covid protocols allow.

“We would have loved to meet in person with the company. But not [meeting in person] is no longer a barrier to investing in companies,” he says.

Such is life for a lot of investors like Zeoli who, because of covid-related travel restrictions, are conducting nearly all their calls virtually instead of flying around the world for in-person meetings. But, like many firms, Base10 has not slowed its investment pace. Zeoli says the firm, which is investing from a $250 million fund raised last year, is having a “super-active” year and is on pace to back 25 companies in 2021 through its main early-stage fund and its $250 million growth vehicle raised this year.

New geographies

Plenty of investors are also taking advantage of having to conduct due diligence and meet start-ups over Zoom by exploring new geographies. These include Icon Ventures, which is looking more aggressively at deals in Europe since general partner Michael Mullany relocated to Dublin, Ireland during the pandemic.

Base10 is not just looking at India. Zeoli tells VCJ the firm is also closing in on two investments in Africa, but those are not yet disclosed.

In all fairness, Base10 is no stranger to investing outside of the US – its portfolio also includes companies in Canada and Latin America. São Paulo in Brazil is home to fintech businesses Nubank (which has filed to go public in the US) and Lana, as well as foodtech venture Mimic.

Zeoli says the international expansion is in part a result of how business is currently conducted, as more companies in emerging geographies sell to the rest of the world, much like how SaaS Labs operates with international sales. He adds that more businesses starting up in emerging economies sell domestically, referring to some of the companies in the firm’s Latin American portfolio.

“We find both of those kinds of companies super-interesting,” Zeoli says.

Worldwide, venture investments are at record levels this year, boosted by a surge in deals in software, e-commerce, digital healthcare and fintech, according to data from market research company Refinitiv. Covid lockdowns and changes in consumer behavior brought on by the pandemic have also helped to fuel growth for digital technologies and start-ups, which in turn, has accelerated investor appetite worldwide.

Zeoli says business operations have also changed. SaaS Labs, for instance, allows users to sign up on its website with a credit card. “There’s no need to talk to a sales rep. The way businesses buy software has changed and the ability to purchase software from basically any vendor in the world is super-powerful.”

He adds: “Our investment in SaaS Labs shows that you can find amazing entrepreneurs anywhere. And we want to go wherever the best entrepreneurs are located.”