4 investment themes

Non-exhaustive list of themes and ideas I'm excited about

The innovation cycle doesn’t stop. There is an abundance of things to be excited about right now. Together with the LocalGlobe team, here are some of the themes I’m spending a fair amount of time on. It includes a mix of emerging ideas, opportunities, and more established areas where we've already made several investments. Please note that this list is non-exhaustive: we often find ourselves venturing into new territories guided by the founders we meet, arguably the most rewarding aspect of investing at the early stage.

Here are four themes that we’re excited to invest in and explore:

1. Consumer-Grade Products for Business Workflows: These products digitize critical business workflows, including transactions such as ordering, spending, and payments. They come in various forms, including vertical software, B2B marketplaces, SaaS+marketplaces, and finance platforms. Matan, co-founder & CEO of Melio, describes it as “workflow+payflow”. It’s an area where we’ve been very active over the past 5+ years; our existing investments include Travelperk, Melio, Tide, Motorway, Qogita, Goodlord, Rekki and Libeo, among others (incl a new one to be announced soon). These companies are driving the digital transformation of SMBs, and we continue to see immense opportunities, especially with the rise of LLMs, which could enhance reasoning capabilities to streamline actions and integrations without altering the user interface (emerging middleware opportunities?). There is an opportunity for these businesses to become “multi-products” much earlier in their journey (and sometimes they need to be to win). My next post will be about the different models we’ve seen and what we’ve learned about these companies.

2. E-commerce 2.0: Shopify (an excellent example of workflow+payflow) defined the first generation of online commerce. Companies like Algolia, Klavyio, and Mailchimp have built successful businesses around the e-commerce stack. With the emergence of foundational technologies like AI, Web3 (it is not dead!), new form factors (3D, spatial computing), and the cultural shift towards a more holistic and omnichannel digital commerce experience, we’re excited about the evolving e-commerce stack, from back-end to front-end and new applications. We’re moving away from monolithic SaaS solutions towards architecture and products that enable greater customization, personalization, and automation. Our investments in this space include Medusa, Meilisearch, NextDecade. There is a fair amount of activity trying to leverage the ubiquity of WhatsApp in commerce (Charles, Kiosk). Beyond commerce via a chat interface, I’m particularly interested in the opportunity to leverage LLMs to merge “search+discovery”. A couple of companies are starting to work on this (Dialog, Enso, Moonsift), including Shopify and Amazon of course. What does Perplexity.ai for commerce (could) look like?

3. AI Eating Services: AI is not only enabling workers to be more productive but also taking over analytical tasks. The growing reasoning capabilities of LLMs present an opportunity to offer services traditionally performed by freelancers or consultants, both at an integration/ingestion level—capturing data (both structured and structured) from multiple sources—and at a reasoning level for generating insights and triggering actions. Services industries previously considered “not venture scale” are particularly appealing to us—existing investments in this area: Faculty, Streetbees, Feedier. We’re looking for more :)

4. A new stack for the physical world: The most impactful products and companies stem from layering technological breakthroughs. With its camera and GPS sensor on top of cloud infrastructure, the smartphone powered the last wave of innovation, catapulting our lives into the digital world. While AI represents the new software platform shift, we’re incredibly excited about its combination with new hardware (sensors, drones, satellites) that will unleash a new wave of innovation. There is a new stack to build for and on. This new generation of hardware unlocks vast datasets about our physical world, which can be proprietary or publicly available (e.g. satellite imagery). Thanks to advancements in AI, particularly in computer vision, we are more equipped than ever to process and understand these datasets, enhancing our comprehension of the environment. There are numerous commercial applications to reinvent here: certification, localization, exploration, monitoring and restoration. Before being acquired by Meta, our portfolio company Scape was building a 3D map of the world (or a digital twin, if you prefer) to help machines understand their precise location. Another portfolio company, Oden Technologies, is doing monitoring and insights in the manufacturing space. I’m particularly interested in potential applications around biodiversity to help our generation solve the climate equation. Our portfolio company ERS has created a new certification standard for the carbon markets. We’ve seen other mission-driven teams doing exciting work in the exploration of minerals (MinersAi) and the restoration of forest ecosystems (Morfo). Since the start of the century, we’ve mined (!) our physical resources to build our digital lives. We now have the opportunity to leverage our digital age to rebuild our physical world. You could say it’s payback time :)

We’re continuously evolving our thesis around these opportunities and love learning more. If you’re working in these areas or have thoughts, please get in touch!