Gorilla Capital Fund III’s 30th investment is Spacent, a pioneering company redefining how organizations manage workspace in the era of hybrid work. With one agreement and one service, companies gain access to over 300 offices across 24 countries. This empowers teams to work flexibly and allows businesses to set effective hybrid work policies, all while reducing real estate costs, CO₂ emissions, and administrative complexity.
Spacent is currently used by leading enterprises in tech, consulting, and engineering, making it the must-have tool for facility and workplace managers, HR, and Business leaders who are building flexible, competitive, and responsible workplace strategies.
Co-Founders Jatta Nemeth and Eetu Ristaniemi at Spacent comment: “From the very first discussion, Gorilla Capital saw Spacent not just as a workspace platform, but as essential infrastructure for the future of work. Their experience in scaling B2B SaaS and clear-eyed approach to growth makes them an ideal partner for our next chapter.”
Gorilla Capital Partner Kirsi Vine-Haaparinne adds: “Spacent is addressing a critical and global shift in how companies think about the workplace. Their product elegantly solves pain points in hybrid work — cost, control, and culture — in a scalable, future-proof way. We’ve been impressed by the team’s ability to learn and morph their execution based on that learning. Combined with their super-lean operating model and strong B2B traction, Spacent is a textbook later-stage camel: resilient, capital-efficient, and positioned for disciplined growth.”
In this funding round, we are investing alongside Lifeline Ventures and Halton VC, Redical Holdings AG, and Morrow Portfolio Oy, who are also backing Spacent’s next growth phase.
In his Medium post, Matt H. Lerner, founder of Startup Core Strengths, considers the calculations behind risk and return in venture capital. Using a Monte Carlo simulation, he finds that ceteris paribus, a larger portfolio yields markedly better return multiples than smaller ones.
This is chiefly due to the power law characterizing VC returns, which implies that a small number of portfolio companies bring in a large portion of total returns. Simply put, the more companies you have, the more likely it is that you find an outlier that ends up becoming a unicorn and yields a gargantuan multiple.
Of course, VCs do not choose their firms randomly, and some of the top ones highly benefit from their brand and connections which certainly boost the probability of success for all of their respective portfolio companies. The above still holds true, and we at Gorilla Capital have since 2012 been vocal advocates of the large portfolio approach.
The diversification benefits from having 70+ active companies in total in our Funds I & II mean that our success is actually not even contingent on finding the occasional unicorn. Instead, the bulk of the solid returns is generated from a large number of successful, earlier-stage exits. However, should a portfolio company show potential to reach a billioneuro IPO, we certainly support them on their path – our approach doesn’t force any artificial ceiling on companies.
There are some understandable reasons behind LPs preferring managers that practice unicorn-hunting over this more sensible strategy. First, venture capital is seen as an asset class with a high level of risk correlated with a high level of reward. LPs might feel as though they can get solid returns with a sounder risk level from other assets. Second, the irrational optimism characterizing the entire venture capital industry is strongly present when funds are pitching to LPs: the dramatic, emotional and overoptimistic style often entices more than a more cynical one.
At Gorilla, our mission is thus to show that a larger portfolio size of companies is also able to generate sizeable returns for investors. We are essentially hedging our downside without limiting our upside in the slightest. The success of our previous funds applying this strategy serves as empirical proof: the general VC wisdom of unicorn-hunting can and should be challenged.
A Tale of Two Squirrels: The Not So Simple Math on Venture Portfolio Size: https://medium.com/@matthlerner/a-tale-of-two-squirrels-the-not-so-simple-mathon-venture-portfolio-size-b33a2de51003
Money is
always a consequence, not the root cause. You work – you get paid. You sell –
customer pays. You roll the dice and get lucky – you get rich. You have a
business (plan) that works – you get funding.
But getting
funding is not the end goal, not even for a startup. The end goal is to be able
to pay all that funding back, and some more. To reach that you need to have a
business that works. For getting there, you need the right strategy. The
strategy should be all about your business: who is your customer, what is your
offering, how you plan to win etc.
The journey
from where you are today to where you need to be one day is typically so long
that you may need to top up some fuel on the way. Funding is your fuel, helping
you to get where you need to go. But it’s just a means to an end, not the
reason your startup exists and definitely not your Northern Star. It should not
be the driver for your thinking and activities, do not let “what do I need to do to get funded” to
mislead you.
No, but this is still more of an “exception” rather than “the norm”. Some investors who have a similar kind of basic philosophy (model is more of a “scalable Angel” rather than “VC”)
https://www.kimaventures.com/ (the only European on this list) http://rightsidecapital.com/ (we owe a lot to these guys for setting up a role model we have taken full advantage of. Big thanks to Kevin & al for the inspiration and openly sharing their thinking) https://svangel.com/ (building on the heritage of the original SuperAngel Ron Conway, they have the longest track record to demonstrate the strategy works) https://500.co/ (the most vocal on this list. For them investing is just one of the things they do) There certainly are more but most investors with this strategy tend to prefer a low public profile, they focus on their business rather than PR.
Similar to product/market fit, there needs to be a match between what the startup needs and the investor can offer. This applies first to all “visible” elements of the investor’s screening profile: fit against investment strategy, stage, ticket size, vertical focus etc vs the profile of the startup. And it goes beyond the “visible” – there needs to be a strong alignment in values, philosophies, ways of working etc for the relationship to last during the rough ride ahead. We are not the right investor for many, as what we believe in is rather different from the stereotypical thinking.
Every investor should have a clear investment strategy, including an exit thesis. What we believe in is what professional Angel investors in the US have practiced for years and proven to work. Which results in a very different approach from the typical VC. So while we technically are a VC (=we make a living of investing 3rd party funds in startups), our philosophy is much closer to that of an Angel investor (who invest their own money, so the downside risk feels more real).
Not really, we decide for ourselves only and expect the founders to reach out to other investors. It is also an acid test of the founder’s ability to sell – if you cannot sell yourself and your business to investors, you are likely to fail with customers as well.
Governance and Legal DD (Due Diligence) and Agreements. We have standardised processes and templates on both, there are no mandatory out of pocket expenses. The speed of the process is in your hands as you will do most of the work. We do not insist on our processes if there are better alternatives. We care about the end result, and are pragmatic about getting there. But we do need a proper DD and Agreements.
For us making the ”yes we’re in” decision is fast – can happen in days. Decision is made among the 3 of us, no committees needed. We work independently and our decision does not depend on what others do so we are often the first to commit. But getting to the closing including payment totally depends on you. If you are well prepared and execute promptly on all formalities it can go through in a few weeks, but usually it takes longer – can be several months. Two most common reasons for that are:
You do not have enough investors to close the round (we are never the only investor so you will need others)
The DD brings up issues that need to be addressed prior to final closing (such as unfinished paperwork in share transfers).
Our target is to have 100 companies in the portfolio. Our runrate is 20+ new investments per year. We are actively looking for new companies to invest in.
