1Mby1M Virtual Accelerator Investor Forum: With Milos Sochor of Y Soft Ventures (Part 2)

Milos Sochor: What I just said might sound pretty big, but it’s not. By US standards, it’s a small venture fund. We started the first one with only $4 million. We have invested in five companies. We are able to do more with less money in this part of the world because of very favorable valuations.

For example in the US, that kind of money that would maybe buy you a project on paper, but we already have a company that might have 10 or 15 employees and would already have some revenue. We have invested that money pretty quickly. Now, we are closing the fundraising for our second fund, which will be a little larger. It will be about $7 million. We are looking to finance another five to seven companies in the same space.

Sramana Mitra: Tell us a bit about geography. Do all the companies need to be based in your local city or country? Is it a 

broader charter?

Milos Sochor: At first, we didn’t set any geographical boundaries because we are a global company. We are running round the clock. We have people on calls late at night because we have branches all over the world. When we invest into these startups, they usually come with a 3D-printed prototype that is working. Maybe they have some customers.

We have to work with them hands-on in our manufacturing facility. We have to rework the product to be ready for serious manufacturing. We do the manufacturing and purchasing. Y Soft has 300 employees and they are all pretty much available to give know-how to our startups. I am the main connection point between the startup and the know-how in the company.

It makes more sense if they are geographically closer, because we really spend hundreds of hours per year with them physically in our facilities. We could finance a startup in Helsinki, but I don’t think we would be able to transfer as much value. It makes more sense to do companies in the Czech Republic and Slovakia.

Sramana Mitra: Talk about the five to seven companies that you have invested in. Walk us through the concepts. What kinds of companies are you seeing in that region that fits your investment thesis?

Milos Sochor: Our region has always been strong in manufacturing for the last hundred years. It has been said that we have very skilled people when it comes to manufacturing. It was natural that with the coming of new high tech, this old industry in manufacturing would somehow join. We do see quite a bit of activity in the hardware space.

I’ll start with one of our company called Savio. That’s a company that we have invested two years ago. What they do is an indoor GPS that is used especially in the automotive industry. Savio has a fundamental technology for Industry 4.0 because they digitize everything that’s happening inside the building. They have been very successful in automotive. They provide a hardware/software solution. The hardware are the tags that you have on machines or workers. It provides you data.

One company in the United States came out with the statistics that over 300 people die in US warehouses by being hit by forklifts. If you put a tag on the worker and the forklift and you tell the software to turn off the forklift when it gets within five feet of a person, it will just shut off. There are some companies using it for safety.

Other companies are using it for access or disabling access to certain areas. Manufacturers of cars are using it so that workers can choose the right tool. If you take the wrong tool closer to the car, your manufacturing will shut off. In the sporting facility, it provides you data for the players. In any indoor sport, you can tag the players and provide the data to the coaches.

They have been very successful in retail. A lot of retailers like IKEA are using it for tracking the shopping carts and what’s happening in the store. You are getting information about what’s happening inside your space that you need to be smart about. Then you work with the data.

This segment is part 2 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Milos Sochor of Y Soft Ventures
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