We found a giraffe in Riga, Latvia : Our investment into Giraffe360
This was where I first met Mikus and his Giraffe360 team.
Okay, not quite, but it was on the same trip to Riga, Latvia in February 2019 that I encountered the ambitious startup and also the first living reindeer in my life.
In some sense, Giraffe360 and reindeers looked sort of alike to me at the time: both bizarrely gorgeous in such a distant, lesser known part of Europe. Both inspired as many questions as much awe for what and where they were.
On the reindeer side, the awe was apparently for their beauty and the question was: why do they stink so much?
For Giraffe360, the awe was the great technology and the incredible software platform they built. The question was: Riga, really? (A real giraffe in Riga would inspire as many questions I supposed.)
Obviously we at HCVC (Hardware Club) believe great founders could come from anywhere in the world today, given that internet has long connected every local community all together and you no longer need to be based in Palo Alto to build the next Google. I would know coz’ I personally led our investment into Gideon Brothers, who’s based in Zagreb, Croatia, which I visited twice before deciding to invest.
Still, compared to the much advertised neighbor country Estonia and its more well known capital Tallinn, the name Riga sounds more like a vacation resort town in the south of Portugal. It’d create imagination of perfectly grilled octopus rather than disruptive technologies.
That’s also actually why I went there in the first place. TechChill was this annual startup/VC event held in Riga to try to bring global VCs to Riga to meet the entrepreneurs and learn the incredible potential of the local community. Our friend Andris Berzins, Managing Partner of the Riga-based Change Ventures, put me in touch with the event organizer for a panel discussion. He then introduced me to Mikus, with whom we set up a visit to their office to meet the team and see the demo.
So in this freezing morning of Riga in February, I walked out of my warm hotel and waded through ankle-high snow on the ground from the previous day while trying to avoid dirty mud along the way. I then arrived at this old building at the given address that showed no sign and no indication. I called Mikus. A minute later he appeared with a big smile on the face to pick me up and led me through the stairs to the office.
After brief mutual intros and some good-natured bantering — I only later learned that bantering is not natural in Latvian culture — they showed me the demo.
And my jaw dropped.
How much money have you raised so far again? I asked.
I digested the answer and felt that there must be something they’re hiding from me — I only later learned that hiding is also not natural in Latvian culture except when it comes to emotion.
By then Mikus had moved to London for obvious reason — if you’re selling SaaS services to real-estate agents, London would be the best launchpad in the entire Europe. UK has the largest and the most active real-estate market. At any party in London (pre-Covid) you’re more likely to bump into a real-estate agent than an elementary school teacher.
Still, the idea that a startup from the culturally quiet and reserved Latvia would be able to sell and scale the business among the most chatty groups of human beings, a.k.a. real-estate agents in UK, seemed to me kind of like a self-refutal by itself.
Still, we continued to track Mikus and the team. There was the early morning British breakfast (not my favorite obviously) on a cold rainy day in Soho. Then there was the quick coffee catch-up nearby the new Google campus next to St Pancras International, immediately after I came off the Eurostar. There’s Mikus’ visit to our Paris office to meet my partner Alexis on a sunny afternoon. There were all those touch-base calls where Mikus updated me with the impressive month-to-month growth figures.
Still despite the big smile all the time on Mikus’ face and the bantering we generally enjoyed, I still found it at times hard to build the American-style founder-VC rapport given his still reserved Baltic nature.
With Matija of Gideon Brothers I was cracking jokes about France beating Croatia 4–2 to win World Cup 2018 merely 1 week after the Final when I met him for the first time in Zagreb. Not only I didn’t get a punch in the face, Matija and I also built this instant relationship that we’d continue to reinforce 2 years after our first investment into them in late 2018.
With Mikus it took longer time but at the beginning of this year we were finally ready to come in, totally excited. Mikus and we went back and forth on more in-depth discussion about valuation and terms.
Then COVID-19 lockdown hit.
Like most of the other VCs, our first reaction was to focus on our existing portfolio companies and help them through the hard times. I also had just closed two new SaaS deals in March and just started investing tons of time helping those two new portfolio companies.
Then obviously there was the question: what would real estate look like afterward? With all the claimed exodus of professionals from the metropolitan cities, with apparently negative cash flow impacts on the real-estate agents due to potentially fewer transactions, it’s only wise and fiduciarily responsible to our LPs for us to continue to monitor the market for a bit.
To the extent that Giraffe360 and we did not chase each other at the time, there seemed to me a tacit agreement that for the moment it’s better to focus each on the challenges immediately in front of us.
However, during the lockdown, I found that I didn’t stop looking for a new apartment as I had been doing before the lockdown for more than 9 months. I found myself spending more time poring over apartments on-line. Finally clicking into those VR walkthroughs — some of them horrible to the point of counter-selling — I started to feel that maybe this lockdown would actually be the catalyst for the old real-estate agent industry to finally speed up their digitization, just like it had done for Zoom with their global corporate and SME clients.
At a regular team meeting over Zoom, my partner Alexis, who was trapped in New York during the lockdown, also expressed the same sentiment of spending more time on-line looking at apartments. Then some news articles talked about how somehow real-estate transactions were still being done in London despite the pandemic lockdown.
We knew soon that we had to catch up with Mikus but sure enough he reached out to us first right out of the lockdown. This time we learned about the impressive month-to-month sales/booking growth out of the lockdown. We also learned that our good friends at LAUNCHub and Hoxton Ventures were co-leading a round.
Over the summer we picked up the conversation in earnest with Mikus and all other investors. We finally got ourself successfully into the round to close it out together with follow-on by existing investor Change Ventures. I joined as an Observer on the Board and we thanked sincerely Mikus and the team for allowing us participate in their exciting journey.
One day when Mikus and his team ring the bell at Nasdaq, I’ll surely come back to these photos of reindeers and snow of that freezing Riga trip, with a glass of Rīgas Melnais balzams in my hand, smiling.
For now let’s go out together and get those millions of real-estate agents to all become Giraffe360’s clients!
