Hasso Plattner Ventures, interview with Yaron Valler
Date: 18 November 2013
Hasso Plattner Ventures CrunchBase profile
Hasso Plattner Ventures
Hasso Plattner Ventures (HPV) currently manages 2 funds worth a total of 150m Euro. A third fund of 120m Euro is coming available later this year.
One of the main investors in HPV is Prof. Plattner, one of the co-founders of SAP. HPV invests wordwide, mainly in early stage deep-tech software and hardware companies, from applications to bare-metal.
Yaron Valler is Managing Partner at Hasso Plattner and investor in Diablo Technologies. We met a few months ago in Berlin, together with CEO of Diablo Technologies Riccardo Badalone.
How are things going Yaron?
I am doing very, very well, we are getting ready to close the third fund of 120m Euro and we’re very excited about this. At the end of this year we should be finalizing the legalities and be ready to go.
We are also looking forward to attracting two new partners to the firm, these are all very positive developments right now.
Your career started at Intel, how did you come into your current role at HPV as managing partner?
I was a validation engineer at Intel where I worked on the Pentium MMX-233, later at Intel I grew into enterprise software. Then I decided to do an MBA at Insead and then in 1999 I founded a company with a few friends among which the CIO of Intel, ModusNovo. That company dealt with billing systems for application service providers. It raised a lot of money but wasn’t very successful.
Then we started a company in Supply Chain predictive – analytics, Exedo Technologies, that we sold in 2003. After Exedo I became an investor, I joined a group of investors that took over the Technion incubator and later joined the management of that incubator.
In this time I formed a lot of venture capital relations and was asked by a former partner of Giza Venture Capital to replace him. I joined their enterprise software practise, quite a large fund at the time.
One of the people I met during that time at Giza was Shai Agassi. That lead to a relationship with the people at Hasso Plattner. That relationship eventually lead to me leading the fund at Hasso Plattner.
(laughing) I just gave you my 15 year CV!
Are you enjoying your role?
I love it. It is the best job in the world.
What is the best about it?
You get to work with a lot of smart people and be around cutting edge technologies. You get to influence how these companies form, you get to be a part of lots of big things. That is incredible.
It is not the most lucrative job in the world, if you know how to found companies and be successful, that is much more lucrative. But for my nature and personality it is the most suitable role and the best job I could ever hope for.
One day working with someone as brilliant and impressive as Ric (Riccardo Badalone) of Diablo Technologies and the next day you get to speak with someone like Yossi Cohen from Panaya, who is brilliant and impressive in a completely different discipline.
How do you divide your time in a typical week?
It changes but in general I put around 60% of my time into portfolio companies, another 30% into new deals and 10% in fund management. Working with our companies is the main thing, my main focus.
Are you involved with Professor Plattner on a day to day basis?
Yeah we speak on a very regular basis, he is very generous with his time. It has been a very fruitful partnership, for us it is highly beneficial to have such a visionary industry leader as a resource that we can draw on. That is really great.
Considering the new 120 Million Euro fund and the upcoming new partners, will HPV extend its investment scope?
I don’t think we will change our investment focus. We will keep the same strategy, which is a very simple and consistent;
Hasso Plattner is focused on in deep-tech companies. We do seed and early stage investments in Berlin and Brandenburg, and we invest in later stage companies worldwide.
Aside from our focus on deep-tech, we have always allocated 20% of our funds in opportunistic things. We have investments in E-commerce, AdTec. For example we have invested in Sponsorpay, which is doing very well, and we have made investment in Dreamlines, ReBuy.
You focus on deep-tech and there are strong ties to SAP. What is your exact technology focus?
There is no formal relationship with SAP. There are friendships and informal relationships, through the relationship with our main investor Hasso Plattner and us sharing a chairman.
We actually sometimes compete with SAP, for instance Panaya potentially competes with SAP solution manager. I caught quite a bit of heat at first, but I feel free to invest in companies that cover an area I believe SAP has not yet covered enough.
What criteria should start-ups meet, for HPV to invest in them?
Companies should have high intrinsic value, they should have the ability to change the dynamic of the market.
We look mainly for companies that look at large-scale, real-world problems. Good examples are analysis of large data-sets, predictive analytics. These are things that excite us.
We are not interested in companies whose value is hard to define. A great example of such companies is Instagram, we actually passed on that opportunity. The value of companies like Instagram and Twitter depend entirely on the network effect, which is near impossible to predict.
In early stage investments, there is no line of thinking that could explain why Twitter becomes a champion and others do not make it. Making money from such companies is like winning the lottery.
We are not interested in flipping a company, investing and then selling it on quickly. We want to be a part of large tech companies that solve large-scale real-world problems. We want to build very large companies with market potential of billions of dollars. That is our vision.
Finally, aside from your role at HPV – what do you look for yourself?
My personal goal is to fund the creation of very large companies. I want to fund the next SAP.
Not that I want to found the largest SAP competitor, but I want to fund companies that could become as large as SAP.
I am very fortunate to work for HPV where all people, including our main investor believe in building big companies over the long haul. That makes HPV the right VC for me to achieve my goal.
This interview with Yaron Valler is a part of a larger VC series, I interview partners at venture capital (VC) firms. The leaders in VC are literally putting their money where their mouth is; their views on the market are directly linked to their investment policy, which impacts start-ups in a big way.
For this reason I want to find out how people in the VC world think, what their views on the market are and how they decide to fund one company over another.
My VC Series runs in parallel to my CEO Series, where I interview CEOs of startups in the IT Infrastructure space.