The current global landscape is marked by significant cultural and political fragmentation, presenting challenges for venture investors. Kompas VC has adopted a regionally sensitive investment strategy to navigate this complexity, recently launching a new fund of €160 million ($187.5 million) to support its initiatives.
According to Sebastian Peck, a partner at Kompas VC, the world is increasingly divided into three main economic spheres: the U.S., Europe, and China. Each of these regions is on a distinct trajectory, which influences investment opportunities.
Kompas VC is committed to supporting startups that address critical industrial challenges, including manufacturing, supply chains, and sustainability. While these themes remain relevant, their emphasis varies by region.
Peck noted that the investment landscape has shifted dramatically since 2021, with a growing focus on rapid growth sectors such as AI. However, Kompas VC remains dedicated to its core mission of investing in the physical world, particularly in areas like decarbonization and productivity.
This focus has allowed Kompas to identify a broad niche within the market. Reshoring, for instance, is gaining traction across various sectors, providing ample opportunities for investment.
Despite being smaller than many venture funds, Kompas's second fund positions it well to lead early-stage investments, typically ranging from €3 million to €5 million.
As a European fund, Kompas VC has access to a diverse array of founders and startups. However, it must carefully consider how global fragmentation might impact the potential for returns. For example, while prefab housing is popular in Scandinavian countries, it lacks the same appeal in Germany and the U.S., largely due to cultural differences rather than technological limitations.
Peck emphasizes the importance of understanding market dynamics, stating that sustainability remains attractive in Europe, contrasting with its declining popularity in the U.S. He acknowledges that the investment landscape can change rapidly, and Kompas VC is prepared to adapt to these shifts.
Ultimately, the challenges presented by fragmentation also create opportunities for specialized funds like Kompas VC. Peck believes there is significant potential for smaller investors to take the lead in specific themes and support innovative founders.
