By Joshua Mitnick, VCJ Correspondent
As the inaugural director of Google Campus London seven years ago, the blogger, tech founder and investor Eze Vidra helped build up the U.K.’s fledgling startup ecosystem.
Now, as a founder of Reimagine Ventures, Vidra and firm co-founder Kevin Baxpehler want to spotlight and cultivate a nascent category of the Israeli startup scene: new companies making technology for the entertainment digital age.
Apart from a few exceptions, the critical mass of Israeli technology startups have built their reputation on enterprise software for cybersecurity and B2B solutions, rather than entertainment or ecommerce technology that touches the consumer. But the two managing partners of Reimagine are betting that the disruption of the media landscape and changing consumer behavior is so powerful that large corporates will look to entertainment tech startups in Israel and London with strong know-how in artificial intelligence and big data for solutions.
“If you look at the list of industries being disrupted by technology, media is very high up,” Vidra said. “That means two things: One, it’s unpredictable. Look what happened to different media outlets in recent years. But, two, [corporations] are really ready to embrace change because they have to adapt or die. They can’t just sit still because technology is changing the world around them.”
In September, Reimagine Ventures closed a first fund of $35 million and unveiled investments in such startups as Minute Media, a sports content platform; Vault, an AI-driven system predicting audience and demand for content; and Novos, a training service for video gamers.
The fund was originally established in 2017 with the goal of raising $40 million. Vidra said that fundraising process was a learning curve. “Raising a first fund is not trivial. You get good at fundraising toward the end,’’ he said.
Vidra takes care to emphasize that Reimagine seeks to focus on the technology that powers entertainment companies, rather than investing in media properties.
“We don’t invest in media. I’m not here to invest in the Huffington Post,’’ he said. “We invest in the underlying technology trends that are shaping our world: AI, machine learning, computer vision, and natural language processing.
The fund is interested in the convergence between those technologies and entertainment, ecommerce, gaming, and sports. Vidra described a focus that crosses boundaries between sectors and doesn’t fit any convenient categories.
“Part of the challenge we have ahead of us is defining this space, which we jokingly call ‘TME:’ technology, media and entertainment, or ‘entertainment tech,’’’ he said. “I think that the intersections of the areas that are hard to put in a bucket are the most interesting ones.”
The fund has dual headquarters in Tel Aviv, where Baxpehler is based, and London, where Vidra has lived since 2008. About half of Reimagine’s investments will be in Israeli headed startups, and most of the remainder in the U.K. and Europe — locations where the partners have established networks.
A native of Argentina, Vidra grew up and attended university in Israel. Before working for Google, he spent several years in New York and Silicon Valley, working on internet search products for Shopping.com and America Online. Along the way, he maintained ties to Israel’s startup scene. For the last 14 years, he’s penned a blog, called VC Cafe, a passion project that follows news and deals back home, and includes interviews with CEOs and VCs.
As the head of Google Campus London, Vidra oversaw a building geared to entrepreneurs and startups; it included floors with co-working space, a startup accelerator and a venture capital fund. The campus hosted several events daily for the tech community, drawing at least 100,000 people in the first year, Vidra said.
“It was done at the time where London tech was in a massive upswing. In fact, some would say it was also catalyzed by Campus,’’ he said. “There was the belief that … London tech, you know, can be a force to be reckoned with. Campus was basically the center of the action.”
Following the success of Campus London, Vidra worked as a general partner at GV, the investment arm of Google. Baxpehler, meanwhile, was running the Israel-based venture arm of German broadcaster ProSeibenSat.1, and oversaw investments in Israeli startups that were acquired by McDonald’s and Vimeo.
Reimagine grew out of Baxpehler’s tenure at ProSeibenSat.1, and the desire to widen the pool of investors in the area of entertainment technology. Vidra was interested in the category from stints working at AOL, Ask.com, Shopping.com and sitting on the board of Kobalt Music Group.
The experience of the managing partners in corporate VC investment explains why Reimagine is built around a core of corporate limited partners. They include: British media conglomerate Sky, German publisher Axel Springer, German telecommunications and broadcast content company Freenet Group, German online advertising company Stroer, New York investment bank LionTree LLC, FutureTV Group, Japan’s Adways and ProSeibenSat.1. Reimagine’s backers are keen to get exposure to companies developing technology that could be useful for entertainment and media companies.
The number of corporates investing in venture capital nearly tripled between 2011 and 2016, and more than 75 percent of Fortune 100 companies invest in startups, according to Global Corporate Venturing, which collects data on corporate venture capital.
“When you invest in startups, and you have a corporate behind you, and you align those incentives, it can be very very powerful, especially at the early stage of companies where you’re really able to accelerate their time to market, or give critical data insights, or a design partner, or reference customer that they need,’’ Vidra said.
That said, the founders preferred operating as a traditional venture fund focused on financial returns rather than as the arm of a larger corporation. Corporate VC arms tend to be limited in their deal focus and wait to pull the trigger due to red tape, Vidra said.
“That means, in some cases, missing out on some of the best deals because they are too slow,” he said. “It also might mean skipping deals that managers believe in because they are considered too small or not strategic enough.”
Reimagine plans to make investments ranging between $500,000 to $2 million. The early-stage fund plans to invest in 10 to 15 companies.
As the fund looks for new investments, Vidra and Baxpehler are trying to build a community of entertainment-focused entrepreneurs in the same way the Google Campus London connected startups. Recently, Reimagine hosted a “speed dating” event between dozens of startups and corporate investors. They have also hosted a meet up for companies focusing on esports.
“This was purely to build the ecosystem, and to create that sort of like a trusted place where people can meet other people,’’ he said. “We can help grow this entertainment tech community.”