Nazo Moosa is an extraordinarily impressive woman. She has recently been described as “having been investing in European cybersecurity longer than almost anyone else”. Despite her impressive CV and notable intelligence, she is humble, warm and really good company.
Right now, Moosa is a managing partner at VT Partners, an entrepreneur-centric European growth capital fund supporting fast growing technology companies that she co-founded with Natalie Tydeman in January 2017. Previously, she worked as director of the Carlyle Group and managing partner at the first European cybersecurity venture capital, C5 Capital.
Her investor focus is on cybersecurity, machine learning and the digitalization of critical industries, which, she says, is actually quite rare here in Europe. “Cybersecurity funding in Europe is a fraction of what it is in the United States. Most tech firms don’t invest in cyber”, she tells me. Why, I ask? “Because cybersecurity is complex, there is a lot of vendor churn and major platform and model changes”, she answers.
The consequence of less venture capital for technology in Europe is that entrepreneurs tend to be more risk averse. “There’s less funding, so the founders tend to be more sensitive to risk. This adds a good level of discipline, but it can mean that entrepreneurs become overly tactical rather than visionary.” Whilst the VT Partners office is in London, they cover all of Europe, although Moosa considers the UK to be the hub for cybersecurity in Europe.
“Europe has brilliant centers of knowledge and education,” she says. “There has been a realization that entrepreneurship is the engine of Europe and there are brilliant minds and great innovation.”
The complexity and fast-evolving nature of the cybersecurity industry means that it requires a specialist fund, says Moosa, and that is what VT Partners offers. “Developing and launching in new specific areas, like cyber, helps investors to pick winners and get better contacts” she says of their logic. “We believe that specialist outperforms generalist subject matter, because knowledge is important.”
VT Partners is a growth capital fund, not a venture capital fund, which Moosa explains, is an important distinction. “Venture capital funds include a focus on seed stage investments, whereas growth capital involves funding for companies at a later stage in their growth and maturity cycle. There is a view that there isn’t enough domaine specific investing”, she said, an opinion that VT Partners are trying to challenge.
You’d be wrong to assume that growth capital is all about the money. “Entrepreneurs need guidance,” explains Moosa. “Entrepreneurs often operate in the here-and-now, becoming very tactical and may need support to gain an overview of where markets are heading. Our ability is to sit above that and give a better view of the competitive landscape. It’s about strategic focus, support of merger and acquisition activity, growing the contact base, helping to commercialize and scale their business.”
Who Does VT Partners Look to Invest in?
“We invest in growth companies with more than £5 million in sales who have already achieved a certain level of scale and are looking to compete on a global scale.” VT Partners looks to support entrepreneurs looking for £5m - £15m worth of funding. “Our focus is on fast-growing semi-mature companies, often which are developing new products. We fund innovation to expand a company’s offerings”, Moosa adds.
It’s about strategic focus, support of merger and acquisition activity, growing the contact base, helping to commercialize and scale their business...Nazo Moosa
Moosa and her team don’t wait for entrepreneurs to contact them. To the contrary, they search hard for the right investments. “Growth capital is a mature market so we needed to find a way to stand out – and we did that through specializing.” The VT Partners Team identifies themes of interest, rather than companies. “For example, we look at CISO areas of spend. We look for product differentiators, for traction.”
Once they have a shortlist, they meet the entrepreneurs and founders. “This step is important because you have to be very comfortable with someone to work effectively with them. For us, it has to be a real partnership, a joined-up vision. So personality is as important as themes and the technology.”
When the US and Europe Come Together
Last week, VT Partners announced a collaboration with Paladin Capital, a US-based venture capital firm, to provide high potential technology companies - whether they are early stage companies or more established technology SMEs - with a one-stop platform for their funding needs. As part of this collaboration, Moosa has been named Paladin’s Senior Strategic Partner Europe.
Moosa explains that partnerships between funds and venture capital firms are rare, but that collaboration will enable them to combine their complementary skills, knowledge, experience and networks when identifying and supporting European technology firms in a number of important sectors, including cybersecurity.
“Paladin Capital are well-known in the US, with a distinguished group of advisors, and they can help us get our feet on the ground.” Moosa explains how the two firms will remain very independent, but will work closely together.
“Technology is still very much a US game,” concludes Moosa, “but it’s a very exciting time to invest in cybersecurity in Europe.”