Launching a new VC during the COVID pandemic

Starting a new business in the midst of a global pandemic might sound crazy. Raising it for a new venture capital firm is definitely nuts. Still we decided to take the risk and convince investors with a unique model. In this blogpost we take you on our mission with Styx Urban Investments and share the secret sauce of our model.

One note upfront: This is not yet another blogpost on VC data we’ve crunched. Others have done it by now. What needs to be said has been already. Let’s assume the following: Latest data from Crunchbase, Pitchbook and others show that the pandemic’s impact on the ‘pace and size of equity investments has remained relatively steady’.

Back to Styx; As many other stories, our story started with a last supper: A last dinner by a group of friends and business partners before the first lockdown, back in April 2020. What happened is something that I hear from many entrepreneurs these days: “After protecting my business, the pandemic allowed me to zoom out and shift my work to strategic areas”. This is also what happened here, a real estate developer, an entrepreneur and an innovation guy who zoom out, decide to join forces and share resources. What sounds like the intro to a bad joke turned into a novel venture capital approach with the opportunity to be more sustainable than existing models. In the following paragraphs I share with you three key drivers influencing our work at Styx, an early stage VC for proptech and urban communities:

We embody our vision of a modern city

Working with startups over the years I learned one thing: You need to offer a lot to attract startups. This accounts for any ecosystem, no matter how big, dense or mature it is. Coming from different backgrounds — real estate, innovation, the German Mittelstand — we have one credo in common that we shared individually before even thinking about Styx: We believe that thriving modern cities rely on strong ecosystems on a district level. A connective tissue of hardware (private and public space), people and third places (cafes, concerts, boutiques — all the places we love) and ultimately technology, enhance and facilitate daily life for inhabitants, businesses and other stakeholders in the district.

Building, co-developing and being visible in such a district in our hometown of Mannheim for seven years by now, gives us unique focus, opportunities and credibility to work with entrepreneurs solving the problems of such a modern city.

We keep focus through leveraging our assets

The competition to work with the brightest startups is intense. Not just investors but corporates, accelerators and other innovation programs court for the favor of the brightest entrepreneurs: The ones who succeed offer a lot because they have a strong and dedicated focus. Our credo and the possibilities resulting from our partnership offer a playground full of opportunities: Investing in startups, collecting data from existing real estate, providing testing space — just to name a few of them. Limiting our engagement to ideas we can immediately and uniquely impact with our assets assures that we stay focussed. We are convinced that focus is the key to run our fund sustainably in the future and not get lost in a desert of opportunities. We look for solutions we can test and validate until we are convinced customers ourselves.

The Styx Living Lab — our unique value proposition.

Our game changer goes by the name “Styx Living Lab”. This proprietary testing environment, spanning across infrastructure, community and data, allows us to focus on and advance our mission in real life. What sets Styx apart is that we are not looking for a proof of concept, but create our own. We believe that a combination of financial investment and proprietary testing environment is a strong and unique value proposition for early stage startups. The Styx Living Lab offers them exactly what they need to leverage their capital more efficiently:

Testings and POCs

Direct access to industry feedback

Initial commercialization opportunities through related real estate companies in the background and our rich industry network

Still there are many decisions to take and assumptions to prove on this journey.

Nonetheless, we see that the current pandemic is not just having very limited impact on the overall ‘agnostic’ venture capital market. Our first months of operations proved that such a model is attractive to both investors and startups. What started as the intro of a bad joke shows initial proof. Our story is going to continue and we invite you to follow along.

About

Styx Urban Investment is a German early stage investor focussing on proptech and urban communities. In addition to funding Styx has its own testing infrastructure, the Styx Living Lab which offers startups what they need most: access to real data, infrastructure and people.