R136 Ventures Tech Stack Profile: B2B enterprise software and fintech

We’re happy to share the latest in PEVCtech’s series profiling how investment managers are using AI, tech, and analytics to generate alpha. We’re fortunate to interview Victor Orlovski, Founder and Managing Partner of R136 Ventures.

David Teten: Please give us an overview of your firm. 

R136 Ventures partners with creative entrepreneurs to help scale their mid-to-late stage startups. We’re not just investors – we’ve been in your shoes as CEOs, CTOs, and execs, and have built many great companies and products in the tech world, so we understand the challenges and opportunities firsthand. We work with companies across the U.S., Israel, and the UAE, bringing our global network and experience to shape your vision, strategy, execution, and team.

We have over  $400 million of capital under management, our current portfolio is around 20 companies, but so far we have invested in over 40 companies since 2015. We specialize in B2B enterprise software and fintech, leveraging our team’s deep expertise in these sectors. While our firm has grown, our focus on building great management teams and driving innovation remains at the core of what we do.

In addition to myself, our leadership team includes:

– Yacov Nachmanovich, Partner, with more than 20 years of private equity experience, asset management and project development in the financial sector and retail. 

– Tom Dennedy, Partner and COO, who focuses on helping startups realize sustainable growth. Tom’s experience includes previous roles at Artiman Ventures and Telesoft Partners, where he oversaw numerous successful investments and exits. 

– Ratan Manehani leads investments in mid- to late-stage technology firms focusing on consumer and enterprise tech. Ratan’s background includes investment and advisory roles at various international family businesses, where he managed substantial assets and spearheaded strategic initiatives.

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 David Teten: Who are your peers/competitors, and how do you differ?

What sets us apart from our peers is our team’s deep operational experience. While many firms provide capital, we offer a unique mix of expertise in technology, business development, and go-to-market strategies. This allows us to effectively guide tech teams and implement proven practices that lead to real success in the marketplace. It’s our hands-on approach and ability to navigate both the technical and business sides that make us different from traditional venture firms. We specialize in building and scaling tech teams and operations for growing startups.

David Teten:  What’s your background? How and why are you in your role today?

I started as a software engineer and transitioned into leadership roles within fintech. Between 2001 and 2005, I worked on a pioneering mobile banking platform for a young bank, that became the de-facto best-in-class standard among banks in Central and Eastern Europe, well before the iPhone era. 

From 2008 through 2014, my team and I built a unique platform with a set of product and technologies that enabled this bank to become the largest adopter of mobile payments in the world (becoming also the world’s largest Apple Pay adopter) with over over 45 million daily users by 2015, outpacing the combined user bases of Chase, Bank of America, and Citibank. I also led the development of the world’s first financial super app in 2013 for the largest bank in the CEE region. Since 2015, I’ve been building and leading R136 Ventures, focusing on investing in cutting-edge technology and helping startups scale.

David Teten: What are the tools you’re using for your front office: sourcing, LP relations, investing analysis, etc.? What are the strengths and weaknesses of these providers?

We’ve developed a data-driven sourcing infrastructure that enables us to identify promising deal leads using proprietary filtering tools. These tools sift through thousands of data points, from not only popular platforms like PitchBook and CB Insights, but also from less conventional sources such as Gartner, Capterra, and G2, which provide valuable insights into emerging software companies gaining traction. By leveraging this approach, we can engage with founders and build relationships well before they reach the needed scale. This proactive outreach has resulted in some of our most successful investments (Dynamic Yield) and the discovery of one of our portfolio leaders (Roofstock). We are actively building our VC network and are well known among founders for our great support to the companies we have been investing in.

Our investment process places a strong emphasis on the people behind the businesses, evaluating leadership and team dynamics alongside financial metrics. We also integrate emerging technologies, particularly AI, into our strategy. Through our partnership with AIx2.AI, we’ve adopted cutting-edge AI tools to enhance decision-making and streamline our evaluation processes. This partnership helps us stay ahead of industry trends and continuously improve our approach. All four partners are involved in every decision, ensuring a comprehensive, 360-degree evaluation. Our team’s collaborative culture eliminates internal competition and conflicts of interest, allowing us to make well-rounded investment decisions.

David Teten: What are the tools you’re using for supporting your portfolio companies? What are the strengths and weaknesses of these providers?

We support our portfolio companies by helping them expand into overseas markets, particularly by connecting them with large corporate clients and investors in the Middle East. At R136 Ventures, we also encourage innovation through creative thinking and experimenting with AI technologies. To ensure success, we continuously refine our due diligence processes, learning from each investment to better assist our companies. One of our strengths is our deep network and market expertise, though we recognize that navigating unfamiliar regulatory environments in certain regions can sometimes be a challenge.

When advising our portfolio companies on strategy, inorganic growth, and market trends, we rely on our own data sets (as we have reviewed over 1,000 companies) as well as databases such as CB Insights and PitchBook to back our insights with solid data. This includes valuations, capital market trends, fundraising patterns, competitive landscapes, deal terms, and more, allowing us to provide well-informed guidance.

These resources are common among VCs. However our knowledge of tech industries and deep understanding of trends makes us rather unique in terms of utilizing this data and connecting dots for future products and technology. 

Also we deeply understand the pain points faced by companies and consumers, as well as the challenges associated with adopting new technologies. This insight guides our decision making, enhancing our ability to forecast future trends—a critical skill in venture investing. 

Additionally, our expertise extends to the nuances of tech teams and startup culture. Recognizing that venture investment is fundamentally an investment in people, we prioritize understanding individual behaviors and motivations, which is essential for successful venture outcomes. 

David Teten: What technologies/databases have you found helpful in winning LPs?  (I wrote about this in Why Isn’t Sales As Efficient As Online Dating and Fundraising hacks for VC and private equity funds.

As a firm, we aim to maximize the benefits of data-driven approaches throughout our processes. Our fundraising efforts are supported by several key tools:

  1. Affinity – a crucial CRM tool that helps us track fundraising progress, analyze funnel conversions, and assess the effectiveness of specific campaigns.
  2. PitchBook – an indispensable platform with a wide range of functionalities, including access to contact information. It’s especially useful for evaluating potential LPs, understanding their track records, and customizing our outreach. Additionally, we utilize PitchBook to prepare industry trend reports, which are featured in our marketing materials to showcase market opportunities.
  3. Productivity and automation tools like Calendly, Notion, and Zapier streamline our operations and communication, making our processes more efficient.

David Teten: What tools do you find helpful for expediting due diligence? 

In our firm, speeding up the due diligence process without sacrificing depth or quality is crucial. We rely heavily on a mix of advanced AI platforms and robust financial tools. For instance, AI-driven solutions like AIx2.AI, Google NotebookLM and IKI.AI can really cut down on the time it takes to analyze vast amounts of data. These tools use machine learning to sift through and make sense of patterns that might take humans much longer to identify.

Our due diligence process, both manual and AI-driven, relies on crucial data points sourced from platforms like PitchBook, CB Insights, and Crunchbase. These tools are essential for market and competitive analysis, benchmarking, valuation assessments, and exit scenario analysis.

David Teten: What are the tools you’re using for your middle office: tracking, risk management, etc.? What are the strengths and weaknesses of these providers?

For our middle office operations, focusing on tracking and risk management, we leverage tools such as PitchBook and AIx2.AI. PitchBook supports our tracking efforts by providing comprehensive data on market trends and investment opportunities, essential for monitoring our portfolio’s performance. AIx2.AI enhances our risk management by incorporating AI-driven analytics to predict and mitigate risks effectively, offering a significant advantage in responsiveness to market changes. However, its advanced features require a solid understanding of AI capabilities to be fully utilized.

David Teten: What are the tools you’re using for your back office: settlements, records maintenance, accounting, human resources, etc.? What are the strengths and weaknesses of these providers?

While we partially rely on our fund administrator for middle and back-office operations, our operations team utilizes QuickBooks by Intuit for accounting purposes and DocuSign for handling legal matters.

David Teten: A huge amount of valuable data flows through your pipes.  What are you doing to capture that data and mine it? Can you share any patterns you have identified?

Data is at the core of what we do at R136 Ventures. We’ve invested in sophisticated data analytics platforms, both in-house and third-party, to efficiently capture and analyze the vast amounts of data we encounter. This approach ensures that we don’t just collect data, but actively derive actionable insights to guide our investment strategies from sourcing to deal negotiations.

Leveraging data from the various databases mentioned earlier enables us to closely monitor markets, identify emerging niches, and make informed investment decisions. We regularly analyze a wide array of statistics across geographies, stages, and tech sectors, including fundraising trends, revenue and headcount growth, valuations, recent deal terms, secondary transactions, and exit activities. Over the past few years, as overall VC investment activity has slowed, we’ve observed a shift in leading verticals. SaaS, which dominated for decades, was overtaken by AI/ML for the first time last year, accompanied by significant growth in raised funds for cloud tech and DevOps solutions, which are driving the rise of generative AI. These sectors have long been integral to our pipeline.

In terms of confidential data, we have compiled invaluable datasets over the past decade, encompassing portfolio and pipeline company metrics, as well as qualitative information across various stages and industries, which has enriched our VC playbook. One of our recent discoveries within a fund’s portfolio revealed that companies focused on pure AI/ML-based solutions grew at twice the rate of others. While this finding aligns with current market trends, it further highlights the state of the industry.

David Teten: Do you see any room to use AI to exploit your dataset? If so, what are you doing to move that forward? 

Most generative AI tools have made significant strides in analyzing text-based information, though there’s still room for improvement when it comes to processing number-based data, including graphs, tables, and spreadsheets. Our team adopted text-focused AI tools early on, starting with the introduction of ChatGPT. However, there has been a gap in AI’s ability to analyze quantitative data—one that platforms like AIx2 have recently begun to address. Their new capabilities, such as analyzing Excel spreadsheets and tables, are something we are exploring for integration into our processes, including deal screening, initial due diligence, portfolio monitoring, and communications with LPs.

David Teten: What are the most creative or unusual ways you’re using AI & analytics in your organization?

Recently, we enhanced our screening process by incorporating insights from founders’ YouTube interviews, which are summarized concisely by Google NotebookLM. These summaries sometimes include valuable information that isn’t available elsewhere.

David Teten: What are your unmet technology needs?  Places in your firm where you’re seeking a solution and haven’t found an appropriate one? These may indicate room for Versatile VC to build or invest in a startup addressing that need.

We are in search of a simple and cost-effective no-code solution for web scraping to expand our dataset for investment decision-making. We’ve been evaluating a few suitable options, such as ScraperAPI and BrightData, but have yet to make a final decision.

David Teten: What processes are you focused on improving?

We are continually seeking ways to enhance our internal processes through AI and data-driven tools. One of the foci for us is exploring opportunities to partially automate our regular communications with LPs and potential investors, an area that could benefit from the capabilities offered by the AIx2 platform.

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