Reflections on 2022 — our eighth year disrupting the built world
As the eighth year of Pi Labs comes to a close, I have taken the time to pen my thoughts on what became yet another tumultuous year for global capital markets. In the early weeks of 2022, we had the privilege of announcing the successful close of Pi Labs’ $90 million Fund III — our largest fund to date. Fund III is backed by limited partners from 16 countries spanning four continents — bolstering our global reach. Following the fund closure, 2022 has been focused on deploying this capital into the most exciting start-ups transforming the way we interact with the built world. This has required us to look beyond conventional definitions of “PropTech”, with investments such as Airly (outdoor air quality monitoring); Flown (future of work); Cure (on-demand consumer healthtech); Moonhub (virtual reality training); and Route Konnect (urban mobility analytics) serving as examples of how our investment team are exploring the boundaries of our vertical. Our work has seen us travel the globe, meeting ambitious founders, and sharing our thoughts at events as close as Oxford, as far as Singapore, and everywhere in between (New York, Paris, Copenhagen, Ibiza, Helsinki, Tel Aviv, Lisbon, Bangalore, and so on). As the end of year approached, we were honoured to accept the UK PropTech Association’s Investor of the Year award. With all this growth, 2022 felt like the appropriate time to evolve our brand in order to better align with the way we do business.
Growth of team Pi Labs
With 2022 including an emphasis on deal flow, one of our priorities was to expand the skillset and bandwidth of the team. In the spring we became a three-partner business with Stefania Ponzo and Michael Murad taking new leadership positions alongside myself as Managing Partner and Founder. We also welcomed Gaurav Bassan as Financial Controller, Jacquita Glyn as Office Assistant / EA, Regan Smith as Programme Associate, Juliet Kerr as Investment Analyst, and Pia Choudhury as Venture Partner. I’d also like to thank our interns who have supported our Investment and Programme teams this year, including Christiana Osarenren, Jennifer Darmali and Diogo Nabais.
Investments
Although we’ve seen quarter-on-quarter declines in global venture investments over 2022, Pi Labs saw an increase. We invested £9.2 million into 22 start-ups in 2022 — up from £7.2 million from 19 start-ups in 2021. 13 of 2022’s 22 investments were in new companies joining the portfolio, whereas nine were follow-on investments into existing Pi Labs portfolio companies. There is plenty of research showcasing that the best venture returns have been generated by fund vintages that were actively investing during downturns. We therefore intend to continue executing on our long-term investment strategy going into 2023. Throughout the year, our investment strategy continued to be supported by our industry-leading research, with three white papers launched this year and another arriving early in the new year. Investments this year were spread across eight countries spanning three continents and six round stages (see chart below). 20 percent of the capital allocated in 2022 went to companies with at least one female founder — an area we are actively working to improve across the sector. We also made our first emerging market investment with GoJom.
Aside from those already mentioned, welcome to 2022’s new portfolio additions: ConWize, Firmus, HausBots, Laiout, LiveCosts, Modulize and SymTerra!
Cohort 10 — the new-look Growth Programme
A number of this year’s investments came from Cohort 10 of our Growth Programme (distinct in size and delivery from past years’ accelerator programmes). It was great to see our founders face-to-face (through our new hybrid delivery format). Mid-year, UK Tech News shared that Cohort 10’s combined capital raise post-programme amounted to £15 million. We are very much looking forward to announcing some of our recent investments and programme participants for Cohort 11— where we have actively tested the conventional boundaries of what technologies are relevant to the built world.
Portfolio activity
2022 has been a tumultuous year for technology companies — perhaps the understatement of the year. We have seen mass layoffs at numerous technology behemoths; the NASDAQ Composite Index shave off 30 percent over the year; and downward momentum on venture funding. Nevertheless, Pi Labs portfolio companies have reached monumental milestones in 2022, indicative of the real value many of them have been able to deliver within their respective markets. In the summer, Pi Labs Fund III had its first exit, with Carta acquiring Vauban. We also saw a number of portfolio companies raise later-stage rounds including Demand Logic’s pre-Series A round led by Ashcombe (and participation from Grosvenor); Fulfilld’s pre-Series A round led by Heartland Ventures; Generation Home’s Series B round led by Legal & General (as well as their Peter Thiel-led debt+equity round earlier in the year); Perchpeek’s Series A round co-led by Albion Capital and Stage 2 Capital; Switchee’s Series A round led by AXA Venture Partners; as well as a number of others yet to be announced.
Onward to 2023!
A couple of months back we shared our thoughts on the relationship between crisis and opportunity. We intend to continue taking advantage of current economic uncertainty when finding, backing and doubling down on the start-ups on a mission to transform the way we interact with our built world. History tells us periods like this are the most transformative — where industries are born, die, or change to something barely reminiscent of how they were before. Keep this in mind when contemplating whether to cut back or lean into those innovation budgets.
Bring on the new year!
