Solid ships, captains & crews excel in stormy seas

We are truly impressed by our fleet of startups navigating the COVID-19 crisis during H1 2020. Kudos and congratulations are deserved.

Arne H. Tonning
Alliance VC
5 min readAug 3, 2020


Follow-on investments all-time high

H1 2020 ended up being an all-time high for follow-on investment in the Alliance Venture portfolio. Eight companies raised a total of 479 MNOK (approx. 50 MUSD). Six of the funding rounds have already been announced, Apexx Global, Shoreline, Aprila Bank,, Novelda and poLight, while two deals are not yet public. Although we were an active participant, facilitator and supporter for these investments, the vast majority of the capital invested (approx. 90%) came from co-investors. These capital raises were a mix of planned funding rounds and extension rounds put in place to secure the financial foundation and runway for the companies to focus on operations in a challenging market. We are happy that most of the portfolio now has more than 18 months of runway. Six of the H1 funding events were uprounds, while two were flat.

This set of investments is a clear testament to the quality and attractiveness of the companies and opportunities. It also proves the viability of responsible investment practices in a challenging market — a principle endorsed in an earlier blog post.

Funding is of course not the ultimate objective for these companies, nor a guarantee for success, and it may sometimes be a vanity metric. However, it is clear that capital now gravitates to winners more than ever, making the capital markets a bigger separator. Therefore, we view the level, rate and terms of follow-ons in H1 to be a market validation of portfolio quality, as well as an enabler of growth coming through and out of the market turmoil.

Heads-down, agile execution

While funding can be a powerful tool, great execution is the biggest driver of success. Many of our outstanding portfolio companies have been heads-down focused on agile navigation and execution during H1. Examples include:

  • saw demand soar as the virus outbreak hit. In a recent podcast CEO/co-founder, Karl Munthe-Kaas, shared the story of how an aggressive 6–9-month scaling and growth plan was successfully crammed into 3 weeks to be able to serve immediate demand. The COVID-19 crisis, an opportunity for, stimulated creativity and previously unknown execution superpowers. The company also onboarded furloughed hotel employees to help cope with demand. The efforts resulted in new organizational capabilities and additional permanent fulfillment capacity.
  • One of the first markets impacted by COVID-19 outside of China was logistics and freight, caused by disruptions in Chinese manufacturing. As players scrambled to get a grip on the fallout, Xeneta, had a unique dataset providing insight. Everyone from hedge funds to financial media, like The Financial Times, turned to Xeneta as a source of “truth”. At the same time, core Xeneta customers, particularly ship owners and freight forwarders, were directly impacted by the effects of the outbreak. Xeneta stepped up to serve old and new customers alike with valuable data and insight to help navigate the dire straits.
  • Superside, delivering tech-enabled design services at scale to enterprises, has been built with a distributed workforce from the start. Superside is therefore a mature remote-first company well ahead of the curve with respect to one of the main COVID-19 trends. Check out their pro-tips for remote work. Superside has seen robust growth through H1, and its operations have been agile and efficient to serve a diverse customer base with varying and changing needs. Companies like Superside are uniquely robust for situations like the virus outbreak, and the crisis has further validated the business model and architecture. Superside also earned “social responsibility stars” by providing free design services to companies hit by the pandemic.

Observations and the journey ahead

A realization from H1 is that the future is truly unpredictable. COVID-19 is not quite a black swan, as a global pandemic was a known and partially planned scenario. Yet no one expected the recent series of events and responses, nor the current market/economic conditions at the start of 2020. Now, more than ever, it is important to keep a cool head and stay focused on fundamental long term trends and key company objectives, while reading the market to make agile adjustments accordingly.

Looking ahead we believe that:

  • COVID-19 is a massive accelerator for tech, given the catalytic effect the outbreak has on the digital transformation of enterprises, consumer behavior in e-commerce and service consumption, remote work, etc. — all enabled by tech. As an example, Morgan Stanley predicts that the US adoption of e-commerce has been pulled forward by two years due to the pandemic (see diagram below). Tech investing is a great place to be with tech’s increasing importance and consistent growth. The capital markets now appear to realize this, as exemplified by the BVP Nasdaq Emerging Cloud Index (Ticker: EMCLOUD) being up +50% year to date.
  • The crisis is not over yet — neither the short term unpredictability nor the longer-term effects of accelerated tech-enabled transformation. We expect to see further turmoil over the next 6–12 months, which requires continued solid execution. Looking like a winner today is in no way a guarantee for ultimate success, but well-resourced agile and focused operations will improve the odds.

We would like to congratulate our portfolio companies and teams on the performance during H1 2020, and we are both thankful and excited. Our faith is strong in the portfolio’s ability to weather the storm and navigate to come out ahead. Hence, we are bullish about the future for our founders, portfolio companies and funds, as well as on the tech market overall.