Home / Business / Mosaic Ventures, the London-based Series A investor, has closed a second fund at $150M

Mosaic Ventures, the London-based Series A investor, has closed a second fund at $150M

Well, that was quick: A little over two months since we reported that Mosaic Ventures was in the middle of raising a second fund, TechCrunch can reveal that fund two has in fact now closed, as the London-based venture capital firm looks to double down on backing “Europe’s most ambitious entrepreneurs”.

We began hearing from sources late last week that news was imminent, and in a call on Saturday morning Mosaic founding partners Simon Levene and Toby Coppel confirmed the details. Fund two totals $150 million, as per an earlier SEC filing, and will be used to continue the firm’s Series A remit, which will see it back 5-10 new companies each year, as lead or co-lead, typically with a $3-7 million first check.

Four years since launching, Mosaic has invested in over 20 startups, and in a range of sectors. These include blockchain/crypto startups Blockstream and Blockchain (the firm remains bullish with regards to the space), fintech startup Habito, open source drone company Auterion, period tracking app Clue, and data startup Infosum. The firm has also invested directly in deep tech company builder Entrepreneur First, alongside Reid Hofflan with Greylock, a deal Mosaic helped instigate.

“I think what we do is very unique,” says Coppel, when I ask how the VC differentiates itself from competing early-stage firms in London and Europe, especially since — only just on fund two — it is somewhat unproven. “What we do is focus very much at the early-stage, Series A, where founders have built an early product, they’re a long way ahead of themselves in terms of building out their team and their got-to-market. We roll up our sleeves and get stuck in with them in many of the foundational pieces of building a company. That’s our entire focus”.

He also argues that when Mosaic write a cheque, the firm’s interests are more aligned with the founders it backs than larger venture capital firms.

“Given our fund size and the cheques we write at Series A, we think working with us is a very strong choice because of our experience and because we are willing to take risk and because of our network and so forth. And we’ll give everything — we’re entrepreneurs ourselves. As you say, it is early for Mosaic and therefore whatever we do at this point we are going to give 150 percent.

“There are firms that are much bigger in terms of fund size and for them, often writing a $3 million cheque is not the same, it’s a very small part of their fund, you don’t necessarily get the same focus and effort and alignment. And I think that is what sets us apart”.

To that end, Levene and Coppel, who both built much of their career in Silicon Valley, most notably in senior positions at Yahoo, tell me that Mosaic will continue to invest thematically, specifically outlining five areas. They are: “blockchain, crypto and the decentralized web” (it’s the decentralised aspect of blockchain where no one vendor needs to own or have control over the platform, that the pair say is attractive), “computational health”, “machine intelligence”, “mobility and location services”, and “finance 2.0”.

Elaborating on how Mosaic views health tech, Coppel says that over the next five to ten years the cost of sensors that enable “continuous bio tracking” will continue to drop and therefore we’ll all be collecting huge amounts of data from our bodies, such as our metabolism or cardiovascular systems, so that we can monitor our own health. Combined with various “-omics data” and that the fact that sequencing the genome can be done for less than $100, we’ll be able to generate new drugs or help adapt personalised treatments based on that data. “When you’re collecting all that data it creates significant new things and opportunities in new areas. That’s the transformation that healthcare is going to go through,” he says.

Regards “finance 2.0,” Levene and Coppel don’t entirely disagree with my assertion that much of the low and mid-hanging fruit in fintech has already been picked (Coppel himself was an early investor in Transferwise), as the banks and financial services continue to be unbundled. However, they say there are still opportunities to build “best-of-breed services” both for consumers and businesses.

“Insurance is one of those,” says Coppel. “Today the experience is pretty poor because most insurance companies have gone through channels and therefore they’re not consumer-centric. But also the underlying insurance product itself hasn’t really been geared for trust where they’ve created these products that have suited their own internal risk models not necessarily what the customers need. So there is a whole series of opportunities to reinvent the core underlying… risk and protection product to tailor it to the customer’s needs”.

Pressed to be more specific, he says that today many people are overinsured in the wrong products, such as phone insurance, and underinsured in what really matters, such as life insurance or critical illness insurance.

Another area Mosaic is eyeing up is SME financing, where the “attack vector” could be building a great accounting or invoicing product, and then by using the data passed through those services, offering more flexible business financing.

A common thread throughout a number of Mosaic’s existing portfolio — and just about any VC firm these days — is machine learning, and the Mosaic founders says they remain firm in their belief that the impact of machine learning will be pervasive across all industries and businesses. “We’ve gone deep into machine learning and machine intelligence-based businesses,” adds Levene. “Obviously there’s the investment in EF… that, if you like, is an index of that whole sector. At least half a dozen of the portfolio have a strong machine learning vector as to how they are attacking a particular vertical”.

On that note — and given that AI is an area where Europe and the U.K. in particular excels — I turn the topic to Brexit and ask the pair what they make of the current Brexit mess (actually, I used a far less polite word).

“Entrepreneurs at this point still don’t understand what Brexit means,” says Coppel. “It hasn’t come to fruition and most entrepreneurs are focused on the next week, the next month, the next quarter, rather than what’s going to happen in a year and a half to the U.K. economy. That’s certainly true of the early-stage companies. [For] the later stage companies, there are some more significant decisions. It’s not easy to move hundreds of people around.

“We don’t really know what Brexit means yet and it obviously creates havoc for people who are trying to plan. But at this point we haven’t seen any evidence from entrepreneurs saying ‘I’m not going to start my company in London, I’m going to start my company in Barcelona or Berlin’ and we haven’t seen companies move from London to the continent because of Brexit. Could we see that in six months from now? Possibly”.

Adds Levene, less optimistically: “The biggest single risk that we foresee is… if it changes the hiring market. If you don’t have access to 300 million people you can bring on your books tomorrow. If you have to go through a visa process that is cumbersome, that would stymie startups being able to hire talent quickly and scale up. So the capital follows talent and if we put up the walls around immigration then that’s going to be a problem”.

I suggest that, given the current trajectory and the music coming from the U.K. government, whatever the immigration mechanism put in place post-Brexit, it won’t be as optimal for U.K. startups as the status quo. Levene doesn’t refute my logic. “It’s shooting ourselves in the foot,” he says, “and it’s not just in tech but I think it’s also going to be in other verticals… So I think the government is gonna have a reckoning if they create friction for hiring, not just in tech but in many other industries”.

Check Also

Ezra raises $4M to diagnose cancer with MRIs, not painful biopsies

1 in 41 men will die of prostate cancer. But sticking a needle through your rectum into your prostate to screen for cancer brings along a ton of bacteria and terrible side effects like pain, infection, urinary trouble, and even erectile dysfunction. It turns out you can detect cancer with Magnetic Resonance Imaging…it’s just prohibitively expensive to do one-off MRIs and have radiologists analyze the scans. But by buying MRI slots in bulk and using artificial intelligence to scan them, a new medtech startup called Ezra wants to replace blood tests and biopsies with MRIs as the new standard of care. Today, Ezra launches v1 of its MRI prostate cancer screening subscription service in New York City. For $999 per year, patients get one MRI, access to medical staff and educational guides, and on-going support if the test finds they have cancer. For now, human radiologists still analyze the scans. However, Ezra is working to get FDA approval next year for its AI analysis that’s was initially found to be 90 percent as accurate as medical experts, and could turn Ezra into a lucrative and scalable medtech company. Comparing Radiologist and AI detection of cancer in MRI scans “One of the biggest problems in cancer is that there’s no accurate, fast, painless, way to scan for cancer anywhere in the body” says Ezra co-founder and CEO Emi Gal. He hopes that eventually, Ezra could offer full-body MRIs that make screening for all types of cancer easier to stomach so more cases can be caught early and more patients can survive. To build out its team and market to potential patients at risk for prostate cancer, Ezra is also announcing it’s raised a $4 million seed round led by Accomplice, the health-focused VC that funded PillPack before it was acquired by Amazon for nearly $1 billion. The firm was attracted by Ezra’s 50 percent gross margin on subscriptions that could get even higher at lower subscription prices once its AI is approved. “We’re not losing money every sale” Gal tells me. And while $999 might sound steep, he says a prostate MRI will cost you $1500 if you book it yourself. With 30 million men in the US alone at risk of prostate cancer, there’s urgent need for Ezra to fulfill its mission of “making MRI-based cancer screening affordable to everyone.” Ezra’s Super Hero Origin Gal has one of those startup founder super hero origin stories that gives him the grit necessary to see the problem through. “I developed hundreds of moles as a child that put me at very high risk of melanoma. Every year I’ve had to check for abnormalities and do a couple of biopsies” he candidly revealed. “I’ve been acutely aware of the importance of cancer screening since a young age.” Ezra co-founder and CeO Emi Gal After studying computer science and applied math in his home country of Romania, he built an adtech company at age 20 and sold it at 30. While working with terminally ill cancer patient charity Hospices Of Hope, he seized on the need for better cancer screenings and began his research about different methods. “The more scientists I spoke to, the more convinced I became to build a new screening modality” he recalls. Typically, prostate cancer screenings involve a blood test for prostate-specific antigen, with an needle-through-the-rectum biopsy done if PSA levels are elevated. But PSA levels can be inaccurate, triggering painful and unnecessary biopsies. Gal discovered a recent study by a leading urologist that looked at 500 patients with some diagnosed the traditional way, and some with an MRI that when cancer is detected is then used to guide a biopsy. The latter method identified 18 percent more cases of cancer while reducing unnecessary biopsies and the associated side effects by 27 percent, the study found. MRIs could work. So Ezra conducted its own investigation to see if AI could perform as well as a radiologist. It had three experts mark up a data set from the National Institute Of Health and trained its AI on the data set through the work of Gal’s co-founder Diego Canto, a PhD in deep learning applied to MRI. They found the AI was 90 accurate at agreeing with the experts on a new data set. Now an FDA regulatory expert on the team is trying to get the AI approved to assist radiologists to lower Ezra’s labor costs. Magnetic Resonance Innovation Rather than wait around, Ezra has partnered with the leading MRI facility network RadNet. It buys MRI time slots in bulk for a cheaper rate, starting with a location in Lenox Hill, Manhattan. Next year it will expand to more RadNet locations beyond New York City. If the AI gets approval, there’ll still be human medical experts involved. The AI eliminates the grunt work of doing measurements and annotating MRI scans so the human can focus on just making the cancer/not cancer call. And if the diagnosis sadly is positive, “What we don’t want to do is just drop a report on people that says ‘you likely have cancer’. We want to help with the treatment process and recommend the best urologists” Gal tells me. A study found AI to agree with medical experts on prostate cancer detection 90 percent of the time The combination of hard technology and the booming direct-to-consumer industry drew the $4 million round that also includes Founders Future, Credo Ventures, Seedcamp, Esther Dyson and a number of startup founders and angel investors like SoundCloud co-founder Alex Ljung. They see Ezra as differentiated from expensive overall health screening services like the $25,000 Human Longevity Inc. “Ezra’s uniqueness stands as much in the company’s investigational AI technology as it does in its innovative consumer-centric cancer screening model” says John Crues, M.D. RadNet’s Medical Director. But the biggest threat to Ezra is insurance. If it can’t convince insurers that MRIs that are expensive up front but could be more accurate with fewer complications are more capital efficient long-term than the biopsy status quo, it may have a very tough time getting people to pay $1000 out of pocket. It will also have to find the right balance of margins and affordability that insurers will tolerate. “We want to focus on building a data set that proves [MRIs] are more accurate, less painful, and faster than that the standard of care” Gal concludes. If it can institute MRIs as the new standard for prostate screenings, Ezra will be on its way to offering a single painless test that could spot cancer early enough that it can be beaten. Cancer will kill 9.6 million people this year. It doesn’t have to be that way.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Disclaimer: Trading in bitcoins or other digital currencies carries a high level of risk and can result in the total loss of the invested capital. theonlinetech.org does not provide investment advice, but only reflects its own opinion. Please ensure that if you trade or invest in bitcoins or other digital currencies (for example, investing in cloud mining services) you fully understand the risks involved! Please also note that some external links are affiliate links.