Provocative is a new early-stage VC firm focused on B2B SaaS and fintech coming out of stealth on Thursday. Joseph Pizzolato (image right) and Cam Rail (pictured left), the duo at the helm of the company who met when they were six years old, have already secured $30 million and plan to raise up to $70 million for their seed capital.
Based in London and Lisbon, Defiant plans to invest in early-stage startups at the late seed or Series A stages. However, unlike many of the new early-stage VC firms, Defiant is willing to lead or to advocate in funding rounds. The goal is to spend somewhere between $1 million and $10 million per deal.
While Pizzolato was already an investor working for Felix Capital and Vitruvian Partners in the past, co-founder Cam Rail has a different background. He joined one of the world’s largest market makers and then moved to Macquarie Bank in London to build the prop trading desk. He then created his own startup called Stackup Risk and sold it to Creativemass.
What makes Defiant different from your average seed-stage fund is that the firm wants to rely heavily on data to find the next promising investment. For this reason, the company is building its own line of products that will help the investment team and also boost inbound interest.
“Our thesis is that the future of venture will be quite different from what it is today. And it will be much more technology-enabled, much more sophisticated about using data, artificial intelligence products,” Pizzolato told TechCrunch.
“We dedicate a third of our budget as a fund to product creation. Again, I don’t think there’s any fund in Europe that does that from an OPEX perspective,” he added later in the conversation.
According to him, most VC firms haven’t changed much in the last 50 years. Even newer companies operate the same way they did back then.
Defiant’s main product is Morpheus, an internal tool for sourcing new deals. When users upload a pitch deck to the platform, it is automatically analyzed by a large language model to extract relevant data such as annual recurring revenue, cost of acquisition, number of employees, etc.
Everything is then stored in a database so that it can serve as the basis for a competitive analysis. Companies can be filtered and sorted based on different criteria. Defiant has also created a scoring formula for these startups.
“And then what we do is enrich it with external sources. We go to TechCrunch, we go to LinkedIn, we go to PitchBook. We go to anything that is, anything that is public domain. We also pay for a bundle of data sets. We download and build these profiles,” Pizzolato said.
Over time, as the Defiant team uploads more data and sees how companies evolve over time, it can identify some outperformers and underperformers. This tool acts as the backbone of the VC firm’s data infrastructure.
The second product is called Draftand it’s a way to help founders understand how their startup stacks up against the competition and what a VC thinks about the business.
Founders enter data and receive a report that ranks their company’s metrics against similar companies in the space. Of course, this tool is also a great way to generate deal flow and collect new data for Defiant’s database. Defiant also offers templates for KPI dashboards or Series A funding decks.
The company then works on a macro-analytics product to find the next big investment themes based on large data sets.
So far, Defiant has raised money from family offices and people working for the tech industry, including general partners at Atomico, Cherry Ventures, Hedosophia, Salesforce Ventures, Earlybird, Vitruvian, GRO, Mubadala and Seek Ventures. Now let’s see if the Defiant team can turn this investment thesis into a portfolio of 15 to 20 high-performing startups.
