Bain's Italian venture fund R204 Partners invests in Qurami

07 September 2016 Consultancy.uk

R204 Partners, a private venture fund run by Bain & Company Partners, Duilio Matrullo and Roberto Folli, has invested a ‘sizeable’ amount of money in Italian startup Qurami. The funding will allow the time-saving app startup to scale, as it seeks international expansion.

Queuing, especially for a limited service or scare resource, can be both frustrating and disappointing. Even when there is no chance of missing out, the uncertainty about wait time can create scheduling uncertainty or give rise to boredom.

In a bid to reduce uncertainties, startup Qurami was begun in 2010. Qurami, an Italian startup, offers people an app that allows users to reserve a space in a virtual queue, prior to arriving at the location – thereby freeing up waiting time for more important matters.

Bain's Italian venture fund R204 Partners invests in Qurami

The technology is integrated with queuing machines that already exist at a range of institutions, from public offices and hospitals to universities. The free app notifies users when their turn nears, as well as provides real-time insight into their place in the queue as people shuffle through to their appointment. The service is currently available in around 100 locations throughout Italy; international interest has been sparked, with a recent expansion into Costa Rica and Panama as well as discussions with premises in London.

The service currently has around 300,000 downloads, with 150,000 users using the app to save time. Qurami has also attracted a range of external funding, closing a funding round in 2014 for €590,000. Today the app is part of Italian venture capitalist fund LVenture Group’s portfolio of startups.

The startup recently attracted additional funding from R204 Partners, a Milan based fund set up by Bain & Company Partners Duilio Matrullo and Roberto Folli. According to reports, the partners have made a ‘sizeable’ contribution to the fund – although the exact amount has not been disclosed and remains concealed behind a secrecy clause.

“This investment will allow us to actually go to the most difficult phase, that of scaling up", says a spokesperson of Qurami. The firm will however face several stark challenges in realising its ambitious plans. According to a study by Deloitte, the chances of a new enterprise to ascend as a scale-up are around 0.5%, which means that only 1 out of 200 surviving new enterprises will become a scale-up.

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Consumer goods start-ups grow interest from venture capital

23 April 2019 Consultancy.uk

Funding the latest consumer goods start-up has been a real money-spinner for venture capitalist firms, with a number of $1 billion companies – or unicorns – having emerged in the space in recent years. New analysis has explored the resulting corporate consumer products activity in the acquisitions space.

Consumer products have enjoyed years of strong growth as new markets opened in developing Asia. China in particular has enjoyed strong growth across a range of consumer good types as the country’s middle class expanded. Private equity firms have been keen to pick up targets in the space as they expand their portfolios to include additional local capacity as well as customers in new markets.

As a result, a study from Bain & Company has found that interest from PE firms in the consumer product space grew sharply in 2018, hitting 6.1% of all invested capital for the year, and making it the third most sought-after category. It is now only behind financial services (23.9%) and advanced manufacturing and services (13.9%).

Corporate venture capital investment

The ‘M&A in Disruption: 2018 in Review’ research found that growth in the segment reflects key changes in the segment as a whole. This is particularly true of insurgent brands, which often leverage local expertise in order to take on international giants in domestic markets.

Short change

The market changes have led to shifts in motivations for consumer goods company investments from PE firms. The number of strategic investments stood at 50% in 2015 compared to deals that increased scope. This has shifted significantly, with 34% of deals focused on strategic outcomes in 2018 compared to 66% for scope. The move towards scope reflects companies seeking out fast-growing products that enable stronger revenue growth streams.

Acceleration in scope-oriented M&A in consumer products

However, there were other motivations for deal activity in the space. Activist investors have put pressure on companies to expand their portfolios in recent years, with the trend expanding from just US targets to Europe.

Further trends

The other key shift in the space regards outbound deal activity. The study found that outbound deal activity has increased significantly in the Americas (up 363%) with total deal volume up only slightly (15%). Key deals included Coca-Cola and Costa, Procter & Gamble and Merck’s consumer health unit, and PepsiCo and SodaStream. In the Asia-Pacific region, outbound deal activity rose 195% while total deal activity fell sharply, by -36%. The EMEA region saw both a sharp decline in outbound deal activity, at -68%, as well as lower overall deal activity, which fell by 32%.

Cross-regional deal making

Deal-making in the current environment is increasingly fraught with uncertainties, as business models change on the back of new technologies, new consumer sentiments and wider market changes from new entrants. As such, acquisitions are increasingly useful as possible hedges on changes in market direction. As such, companies are increasingly pressed to take a future-back position, making sure to incorporate a vision of how the company needs to look in five years into acquisition strategy.

The firm notes that certain acquisitions which enhance a remembrance of a nobler mission, revive a sense of entrepreneurialism and engage directly with consumers may be necessary qualities in acquisitions that transform a company to fit market expectations in the coming decade. While going forward, focus on innovation, partnering with retail winners, reducing cost base and constantly reallocating scare resources will be necessary to protect market share in areas where insurgent local and strategic competitors are active.

Related: Private equity asset growth top priority for 2018.