IT-veterans Peter Larsson and Lars Sveder see more investment opportunities as valuations go down.
The venture capital firm Monterro, is rather unknown in the Swedish tech sector, but the company has built a strong portfolio of software companies. The brightest shining star is Lundalogik. The company’s revenues have grown by 50 percent, to about $17 million (145 million SEK), since the aqcuisition two years ago.
“Our goal is to get a 5x return on our money on average on all our investments, and we are very happy with the outcome so far”, Lars Sveder says.
He started Monterro along with Peter Larsson and Thomas Bill three years ago. Carl Rosvall and Martin Bjäringer are also among the founders.
“The five of us raised $24 million (200 million SEK) on our own, and then we got another $42 million (350 million SEK) from external investors”, Peter Larsson, who has spent his career as CEO at the IT-companies Protect Data and Episerver, among other things.
Monterro is currently planning an even bigger fund. The company is looking to raise almost $120 million (1 billion SEK), and make its first investments over the next few of months.
“The fund will be at least $100 million (800 million SEK) and $145 million (1.2 billion SEK) at the most. We have recently presented the info to our pre-existing investors and the interest has been great”, Peter Larsson says.
“We have never had as many investment opportunities to look at as we have now. That is the main reason for launching a bigger fund”, he adds.
The company invests between $2.4 million (20 million SEK) and $18 million (150 million SEK), with a majority stake in each company being the goal.
“We have built the company ourselves and invest a lot of our own money. A lot of entrepreneurs seem to like that”, Peter Larsson says.
He and Lars Sveder has both noticed that the valuation of tech companies has declined the last few months, although none of them wants to give any quantified measure of the decline.
“The confidence is not the same among the entrepreneurs. There are fewer people who say that they are going to conquer the world in six months. This is reflected in the valuations”, Peter Larsson says.
Lars Sveder seems to agree with him:
“There are still signs of a bubble in some entrepreneurs, who values their own company way too high eventhough they haven’t gotten that far. But we notice that it’s easier to get constructive discussions as a result of the market cool down”, he says.