Investor Q&A: Oscar Hoare from Edenred Capital Partners (ECP)

Tell us a little bit about yourself, your background?

I’ve had a traditional path into VC. Most of my career prior to ECP was in consulting. Firstly with Accenture then with Oliver Wyman focusing on commercial due diligence supporting blue chip PE houses rationalise their deals. I also did two years in a PE roll up focussed on gaming, media and ed-tech businesses. Although those segments are not exactly aligned to ECP, a lot of the learnings, skills and KPIs are transferable.

I’ve always been entrepreneurial myself and knew from my early twenties I wanted to do venture. I like that we take a long-term view, backing founders and their visions. Looking back, I did consulting for such a long time as venture capital is such a tough industry to break into. That is one of the reasons I’m so thankful to ECP for giving me the opportunity.

Could you tell us about your current role at Edenred Capital Partners?

My role is an investment principal in our London office. We are specialists in four verticals: future of work, professional mobility, corporate payments and commerce technology. Everyone has a vertical and geographic focus with different team members focusing on UK, France, Iberia and the Nordics.

My focus is the future of work theme which is incredibly broad. When I started at Accenture, corporate learning was long form and dry whereas it has evolved to be gamified and highly interactive. We’re also seeing biometric data being used to evaluate and predict workforce performance which is a theme we’re following closely. Talent management is being disrupted whether it's recruitment, internal mobility, performance management, wellness, or internal communications.

For those that have not heard of Edenred Capital Partners, can you touch on the Edenred Group and how you think CVC investing differs to traditional venture capital?

ECP is the corporate venture arm of the Edenred Group, a world leader in specific-purpose payments with a €15bn market cap. We have a high level of independence giving us freedom to make our own investment decisions. Our brief is to invest in the next generation of business within Edenred’s sphere of interest, so it is not just a returns game but also an educational one.

One of our differentiators from traditional VC is that we are an evergreen fund. This gives us the option to double down on winners, but also give struggling businesses a second chance. Having a single LP also means our communication channels are direct, honest, and regular. Where we have a strong conviction, we will invest whether the market is buoyant or tight as it is now. Our approach has not changed even in the current environment as we continue to invest where our conviction is strong.

As you’ve mentioned, the market has tightened in the last 18 months. Have you seen changes to deal flow in the market?

In terms of volume, it is still high. Perceived ‘great’ start-ups led by founders with a previous exit are still achieving juicy valuations and competitive cap tables. First time founders or those with weaker track records are struggling to get valuations close to 2020 and 2021. I add that businesses with 6 months or more of runway are in a stronger position when it comes to negotiating terms vs those where cash is tight.

What are some of the key areas you look to assess first when looking at prospects?

We are people focused and try to understand the founder as a human being before we deep dive into their business. Building rapport to understand the dreams and motivations of the founder is key. Secondly, we try to fall in love with the product. There are occasions where we love the product and founders but there's a block around valuation, go to market or another area. Right now, the stars really do need to align; we are very methodological with a low volume of targeted deals. We are not trying to do a deal a month, so it’s okay to say no when it’s not quite right.

You mentioned earlier that you’ve always been interested in working in venture. Since joining the industry how have you found it and is it what you imagined it would be like?

I love my job and think you’re only going to be successful if you love what you do. All the great founders are obsessed with their product and the problem they are trying to solve. I am passionate about ECP because I enjoy meeting entrepreneurs and forming a view on their business. All points of view are welcome at ECP and it is the team debates and decision making process which make the job so stimulating.

For the final few questions are hopefully a little easier to answer and we’re borrowing them from ‘Desert Island Discs’.

• What's the one album you have with you and why?

I’m well past albums (!) so I’ll go for my Spotify playlists, but an artist I would pick out is Fleetwood Mac

• What one book would you have with you and why?

I’m going to pick two if you’ll allow me. As a child I adored Roald Dahl because of his imagination and my favorite book was Danny the Champion of the World. As an adult it would be Robert Parker’s The Wine Advocate.

• Which luxury item would you take to the island?

A solar powered air conditioning unit to make the heat more bearable.