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XY Ventures: Interview with Simon Olson

XY Ventures is a $15M seed fund in Stockholm, Sweden, the second most unicorn dense area in the world, to fund high potential software startups in the Nordics targeting digital disruption opportunities.

Watch the interview with Simon Olson, alumni of VC Lab and the founder & managing partner of XY Ventures, a seed-stage fund that bridges the Nordics and Silicon Valley startup ecosystems. 

On Simon.

I have an entrepreneurial background.

At MIT, as part of an accelerator program, we raised some venture capital and worked on our startup Y-Box. After that experience, I ended up working with a big IT company in the Nordics called TietoEVRY. Heading up the ‘Innovation Studio’ and later on the ‘Ideation and AI’ program I was looking for “the next big thing“. From there, through my network and accelerators, I took on a lot of pro bono work in the Nordics and in the States. That eventually led me to the opportunity to join VC Lab, after I was invited to apply.

On XY Ventures.

We build a connection between the Bay Area and the Nordic region, enabling strategic bilateral relations between two of the most unicorn dense ecosystems in the world.

XY Ventures is a seed stage venture capital firm. Typically we work with accelerators in the Bay Area, where either myself or one of my partners have a relationship in mentoring startups that have a connection to the Nordics. This way we can work with founders very early on. It matches well with our investment thesis, which is to focus on digital disruptors.

On Founders.

The biggest thing for us is grit.

We look for people who give themselves no other alternative other than to succeed. For example, in the Nordics founders typically work on their startup as a side job until receiving venture capital. We prefer to work with founders who have already made the jump to running their startups full time. We don’t tend to invest pre-product startups.

On Innovation.

AI backed, manufacturing automation and fintech fraud detection

With my experience and interest in DeepTech, one application of AI that interest me is automation within manufacturing, which is an area where I have some experience. Another exciting use case of AI is fraud detection within financial services / FinTech, which has been a key area where a lot of the innovation has come from the Nordic region.

On Sweden.

There are a lot more people who want to become entrepreneurs compared to 10 years ago.

The ecosystem in Sweden is really exciting. Traditionally the community has been really tight-knit and a lot of the entrepreneurs know the VCs and vice-versa. We are now seeing a new wave of impact focused entrepreneurs coming into the scene and I think that is really exciting.

On the flip side, the VC scene is also very interesting in Stockholm. A lot of the VCs here come from a private equity background as opposed to ex-entrepreneurs. You can see it in the Series A venture rounds here where most are backed by P.E. firms / individuals within VC funds with that background. Notably, there aren’t that many seed funds in the region. At the same time we have a lot of accelerator programmes focusing on the ‘ideation’ phase. So it makes it really interesting to be a VC between this gap unfolding int the market.

On Being a New Manager.

The hardest thing hands down has been fundraising.

A lot of the LPs in this region expect emerging fund managers to have a private equity background and experience in the financing side rather than the company building aspect. It has been an uphill battle to explain to some LPs how that aspect works and that we aren’t just buying lottery tickets.

Secondly, building a team that is passionate and believes in the mission can be challenging , especially when you are a new fund manager and are relatively less known. Right now we have 8 people in our team. It takes time to build relationships and trust as a new manager.

On the Plan.

We’re aligning ourselves for the final close.

Since graduating, we’ve built a team which includes some senior members with private equity backgrounds. We have one more person to on board before the final closing.

I’m still on the lookout for more people who believe in our thesis of bridging Silicon Valley and the Nordics. We’re keeping our heads down until our final close at which time we will start thinking about our second fund and build up the network to close for that fund.

I wouldn’t say that this was even in my dreams about a year ago. It has been a roller-coaster of a ride in a good sense. We are thrilled to be working with VC Lab in our journey.

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