Interview with Eurocomms January 2015
As NGP celebrates its 10th anniversary, Bo Ilsoe discusses strategy for the year ahead, including the areas to look out for.
Eurocomms.com: NGP is 10 years old this year; what’s the most important lesson you’ve learned during this time?
Bo Ilsoe: Technology is moving faster and the emergence of mobile and internet as a global unified platform has accelerated innovation and the opportunities to build large scalable companies faster and more capital efficient than ever before.
Global differences and cultural differences remain across geographies but business models and innovation travel fast across all markets.
You are sponsored solely by Nokia – how confined are you by this in terms of the type of companies you can invest in?
That is an excellent question. Our model is unique since we are a completely independent fund manager sponsored by one sole corporate LP.
With this structure, we can combine best practices of both financial and strategic investing which has worked well for us and Nokia for the past 10 years.
This means we are not constrained or confined by our LP but are allowed to reinforce our financial focus together with intimate access to Nokia. That offers clear value and strategic leverage for the companies we invest in.
What percentage of the investments you make end up boosting Nokia’s portfolio?
We aim to invest in companies that align to Nokia’s strategy but not all investments lead to direct partnerships. Roughly around 75 percent of NGP’s portfolio companies have worked actively with Nokia through a structured partnership.
Having said that, it’s important to remember that there are many different ways to cooperate and more options than partnering.
I would say all our investments lead to valuable business relationships in one way or another through for example knowledge sharing, early insights, a broader network, new relationships, etc.
In 2014 you invested $60 million in 20 companies. What are your projections for this year?
We hope to make a similar amount of investments and continue with this same pace.
What are the characteristics that make a great mobile company to invest in?
I could talk about this for hours and hours. Essentially, companies need to have a mobile first strategy that goes across platforms and app stores, for instance in China distribution is very fragmented.
Most importantly, a great mobile company must have a great management team. Global execution is another factor we are looking for.
How does the entrepreneur scene in Europe compare with other parts of the world in your view?
There is innovation and entrepreneurship in all the regions where we are active. European companies tends to be a bit more capital efficient with an ability to go across languages and markets effectively.
Europe has several centres for venture capital and entrepreneurship, such as Berlin, London, Stockholm and Paris, [but they are] much less concentrated than other markets.
You’ve just announced an investment in urban transport app Moovit. Why is this big news?
We think Moovit addresses a complex issue and have the potential to really disrupt how we look at public transport globally.
Urbanization, age demographics and traffic congestion is driving up the usage of public transportation and we think Moovit can make life easier for millions of urban commuters worldwide.
Outside of transport, you invest in e-commerce, data and analytics, connected cars and enterprise market. Which of these are you excited about this year in particular and why?
We are passionate about all of our investment themes and see loads of disruption happening in each one of them.
Here in Europe, the areas we are particularly excited about are the connected car – because we see so much activity – and mobile consumer facing technologies, especially mobile health and wearables.