Saskia Hoebée
Saskia Hoebée is a Senior Associate at Five Seasons Ventures, with the fund since March 2020. At FSV, Saskia is involved in the boards of Air Up, Just Legends, Her1, the Nu Company, KoRo, and Mammaly. Besides her passion for hunting for the best deals and portfolio management, she has made it her mission to invest in more diverse and female-led management teams.
Tell me about your experiences and what role you play in the current institution you work for now?
We are a specialized food tech fund based in Paris. We invest between two to ten million as initial tickets in food tech startups in series A companies across Europe. We only look for the type of companies that can become the category leader or a new champion within the food tech space. In Europe, we have two funds. We are currently investing from our second fund worth 180 million. We have made seven investments from that fund. We also fully invested our first fund over ten portfolio companies, including one company called Just Spices, that we sold to Kraft Heinz last year. We always find and invest in the best food tech startups and help those companies grow into European champions.
What are the key factors that entrepreneurs should keep in mind while establishing startups or businesses?
I am very biased toward food. That is my key focus and expertise. But generally, when you build a business, ensure that it's a product that people want and solves an issue. Always create products that people like. In the food business, if you make something, it must taste well and fill in real consumer needs such as improved health, lower sugar or plum based. There is a lot of product push in the market from companies coming up with interesting propositions, but nobody ever asks for it. This is the biggest mistake to think you can create demand because, to a certain extent, you can.
What challenges do you see in the food and beverage startup ecosystem?
At the moment, this year is all about two things, inflation and cash management. The cost of goods and products sold is becoming more expensive, impacting the gross margins and the fear that consumers might actually go for cheaper options. We also see a rise in white labels. For example, supermarkets own more affordable products instead of premium branded products. On the other hand is cash management. This is a very tricky year for startups to raise funds as interest rates and capital costs are rising. Investors get a little bit more anxious when making investment decisions. I would advise all startup founders to make sure that with the cash they have at the bank, they use it until at least the end of 2024 and manage their bottom line rather than continuing to spend.
“I would advise all startup founders to make sure that with the cash they have at the bank, use it until at least the end of 2024 and manage their bottom line rather than continuing to spend.”
Is there any new technology or process that will become more useful for entrepreneurs in the near future?
I was thinking about this question yesterday, and we also invest in companies that make direct consumer sales and sell straight from their workshop. I'm excited about how many more interesting tools you can get, for example, attribution. How do consumers find your product online in the whole landscape of everything? And there is another ecommerce to increase customer retention and ensure that customers return more often. In general, a lot of ecommerce excites me because it'll also make it easier to sell food online.
How do safety and regulations affect funding rounds to build operations and create new businesses?
We would never invest in companies that don't have food safety issues. Many startups produce a Go Packer, so they need to do their production. If they do, it's always important for a company to ensure you have the proper safety standards, which means it has a plan and a certificate for food production. If you are a small company and incidents happen, you still get away with it, but the bigger you become, the more attention you will get. Then you don't get space to make mistakes and think. Also, it can impact the company's brands and trust towards the consumer if there is ever a scandal with the food product. It always requires a bit of time and resources upfront, but it's super important for a startup to get that right from the beginning. It takes effort to gain customer trust, and it's gone in a bit, so you will only get it back if it impacts the food product itself.
What are the key areas you look for in a budding company to invest in them?
It's always an ambitious founding team with the drive to build something big. Not only the right idea and building a nice brand but also managing to execute your product available across multiple channels. From direct consumers to Amazon to food service to supermarkets to those execution capabilities to make sure in the end you also sell your products. The product needs to not only have a market but also, what I say, product mass markets fit. We don't really necessarily look for very niche products, but it definitely needs to have the ability to become a habit of people because that is, in the end, how you build a big brand of food.
What is your advice for budding entrepreneurs or industry leaders in the market?
For many entrepreneurs, it's a tough market in the coming months. Next year will be more challenging for entrepreneurs before it gets better. However, it's also an opportunity because startups would manage to keep their hand above the water in the coming months. They will be the ones that can attract new fresh capital in 2024 and beyond. There is talent that will become available on the market because there are many startups that, unfortunately, have to let people go. If it's your startup, it's an excellent opportunity to make sure you consolidate talent within your business. For many entrepreneurs, keep your head down, manage your cash, and ensure you survive the coming 12 to 18 months because it will worsen before it gets better. But if you are one of those startups that manage to survive the upcoming prices, you're super well positioned to build something big afterward.
