Today, we delve into the world of deep-tech venture capital with Adam Niewinski, Co-founder and General Partner of OTB Ventures. With 20+ years of experience as a successful entrepreneur and top corporate executive, Adam has been constantly supporting ambitious individuals in growing their category-defining companies.
OTB Ventures stands out as a prominent European venture capital firm, with a total of over €265 million under management. Their expertise lies in investing in early-stage, high-growth startups, particularly those focused on real tech, operating in sectors of space tech, AI & automation, fintech, and cybersecurity. They excel in backing companies at the late Seed, Series A, and Series B stages, empowering them to thrive and make a significant impact in their respective industries.
In this interview, we explore Adam’s entrepreneurial journey as he sheds light on what sets OTB apart as a venture capital firm and shares valuable advice to founders aiming to secure funding. Moreover, he provides his perspective on the future of deeptech, Europe’s role in it, and his opinion on the influence of AI in shaping that future.
Can you walk us through your entrepreneurial journey and how it ultimately led to co-founding OTB Ventures?
During my time at Boston Consulting Group (BCG) in the late 1990s, I began to see a new phenomenon emerging – the internet – and I started to believe that this would change the world. It wasn’t easy for me to leave BCG, which was ready to pay for an MBA, but I decided to launch my own startup because I wanted to really test myself. That proved to be the best decision of my life. It changed my business perspective forever, as even when I became Deputy CEO of a large bank, I remained an entrepreneur at heart. It also gave me the confidence to pursue other ventures without fear and become an angel investor. Finally, I realised that what really drives me is working with visionary founders, which set me on a path to co-founding OTB.
How does OTB differentiate itself from other venture capital firms in Europe? What is OTB’s main investment focus and overall philosophy?
We were among the first investment funds in Europe to adopt a distinctive approach by eschewing investments in portals, marketplaces, and similar ventures, and instead choosing to prioritise genuine technological advancements. This strategic decision was far from conventional or widely embraced back in 2017. At that time, Europe was copying ideas from the US and adapting them to fit the European landscape. However, right from the outset, we recognised the importance of placing our bets on Europe’s exceptional technical talent. Nevertheless, what often falls short here is the ambition and commercial acumen required to scale these businesses globally, and that’s precisely where we offer our assistance. We were ahead of the curve in focusing on four verticals that we deemed most promising: AI & Automation, SpaceTech, Fintech Infrastructure, and Cybersecurity, and as early as 2019, we made our initial investment in a generative AI company, long before the current fad.
Due to the current economic situation, startups are facing challenges in securing VC funding or debt financing, with lower valuations and prolonged due diligence. Do you perceive this as a short-term phenomenon or part of a more prolonged phase of a healthy market correction?
I believe the current market is robust and healthy. The events of 2020-2021 were far from normal, and I find great relief in their passing. From my perspective, the economic climate is rather favourable, and my sole hope is that it does not deteriorate beyond its current condition. If an individual is unable to expand their business within the current market environment, it may indicate that their model lacks the necessary competitiveness.
How do you identify promising deep-tech companies? Moreover, what advice would you offer our readers who are startup founders, aiming to secure funding for their ventures?
We see about 1,000 investment opportunities annually mostly coming from our network. Some of them are quite interesting but do not fit the definition of unique disruptive tech – it doesn’t mean that they are bad, but it’s just not something that we focus on. My advice to the new generation of Founders would be to challenge the existing solutions but only if you know the current solutions well enough to actually know what’s wrong with them. Do not try to copy anyone, do not try to take shortcuts. I would recommend reading the poem by Robert Frost – “The road not taken”, which I take great inspiration from.
On the other hand, what are some specific factors or red flags that you come across which deter you from investing in a startup?
We need to see passion and vision but at the same time strong merit and good business judgement. So, first of all, we want to see Founders prepared in terms of how they plan the execution and where they can find potential challenges. If I hear someone saying there is no competition or not knowing how much money they really need at this stage – this is definitely an orange or even a red flag.
Given the volume of pitches and funding requests, you probably receive on a daily basis, what current trends and innovations are you most excited about?
We’re committed to sticking to our strategy, trying not to get caught up by temporary hypes. We’ve always been excited about innovative ideas and category-defining companies and are always open to new ideas and transformative solutions.
How do you foresee the future of deep tech and do you think Europe will play a significant in shaping that future?
Europe is rapidly establishing its presence on the global tech stage, fueled by its potential in deep tech. The continent boasts a number of exceptional technical schools and institutions brimming with the capacity to generate groundbreaking ideas. Historically, Europe has trailed behind the US, primarily due to its sluggish and inward-focused corporate culture, which has hindered innovation and limited ventures beyond their comfort zones. This remains a significant obstacle for Europe’s progress. However, in today’s interconnected world, the emergence of a remarkable startup no longer relies solely on local corporations. Whether born in New York or Vilnius, startups have virtually equal access to the resources necessary for success.
How do you foresee AI influencing our lifestyles and professional environments in the long run? Are you predominantly optimistic or concerned about this issue? Do you believe there should be increased regulations pertaining to AI?
I’m an optimist by nature so I typically see glass half full. I believe AI will help us solve some of the biggest human challenges and take humanity to the next level. This can probably be seen as a new tech revolution and as with all previous revolutions, there will be some who lose out, unable to adapt but the vast majority will strongly benefit from it.
Considering your track record of investing in AI startups, what attracted you to these technologies early on?
AI startups are super powerful and transformative and can solve complex issues with great speed and precision. This will simply be a game changer for many business models and we’ll see many markets being redefined over the next few years. It’s a great privilege to be able to invest at a time when many great new companies are being built over the next decade. These are the perfect conditions for VC investors so I’m really super excited about the times ahead.