Ripple Ventures’ Mid-Pandemic Impact Report
2020 has been one hell of a ride! The Coronavirus threw the whole world on its head and the economy has taken a massive hit around the globe, and there are still no signs of when our lives will go back to ‘normal’. The Venture Capital industry was not exempt from this downturn, as LPs became risk adverse quite quickly, and many of the largest funds in the world pulled back from investing for the first 3–6 months of the pandemic in order survey the damage and manage liquidity for their investments. For a brief moment in time, the startup world was in a frenzy and the outlook seemed similar to that of the Global Financial Crisis of 2009.
At Ripple, we too felt the pressure from this once-in-a-lifetime global pandemic. Our team had to quickly transition to a completely remote work-life, including the transition of our 5,000 sqft incubator space, The Tank, where over 40 employees from our portfolio companies had to transition to be completely online.
Our in-person Tank Talks, previously limited to our portfolio companies and advisors, were also forced online. We transitioned our conversations into a new podcast series, Tank Talks, in order to keep the knowledge transfer going between industry experts and our portfolio companies while now offering insights to the rest of the startup community at large. We unfortunately had to cancel our Ripple Retreat, where over 100 members of the Ripple family were going to be taking part in a fun filled weekend in northern Ontario.
From an investment perspective, our investment thesis made us well positioned to weather the storm relatively unscathed, given our focus on B2B SaaS startups in North America. While the Restaurant, Hospitality, and Travel industries are still finding their way, the majority of the B2B software industries have been able to weather the storm quite well.
At the beginning of the crisis, most businesses were too nervous to sign new contracts, resulting in longer sales cycle times for many startups. The majority of enterprises have since come to realize that many software applications have become mission critical instead of nice-to-haves in our new virtual world, and the idea of cost savings through technology is as appealing as ever. Fortunately for Ripple, our investments in the Healthcare, Logistics, Voice Technology and Enterprise Training industries have seen a significant increase in demand. As a result, we have helped four of our existing portfolio companies complete Series A rounds in the last several months during the pandemic and expect at least two more portfolio companies to complete follow-on rounds by the end of the year.
From a deal-flow perspective, our pipeline of companies looking for venture funding has never been larger. Technology companies around the globe have been raising capital at significant speed since the summer months, and valuations have not gone down either, especially for enterprise software companies. In fact, since the beginning of the pandemic, we at Ripple have spoken to over 600 new companies, which should result in three new Fund II investments by the end of 2020. We have had to adapt our due diligence process to be completely virtual, and although it made us uneasy at first, we now believe we can build just as deep a relationship with founders as ever before. Our due diligence process has increased its focus on data driven metrics, and has actually sped up now that our meetings are virtual and can be taken from anywhere. Overall, we feel very fortunate at Ripple Ventures to be able to operate remotely and still provide our portfolio companies with the tangible support they need each and every day. Our investors have been extremely supportive of us throughout this difficult time and we believe we are well positioned to be active investors in this market with our newest investment Fund.
If you are interested in working with us, please feel free to get in touch, we would love to hear from you — www.rippleventures.com
Written by Josh Garbe, Principal at Ripple Ventures
