“Now everyone is doing data and artificial intelligence (AI) – big media companies are all trying to distance themselves from their heritage because it is hard to make money the way they used to,” said Tony Askew, who has seen major changes in the media industry since he co-founded REV Venture Partners.
The unit was known at the time of launch in the midst of dot-com bubble in 2000 as Reed Elsevier Ventures, a subsidiary of academic publisher and data analytics services provider Relx, formerly known as Reed Elsevier Group.
Askew said the concept of the media sector had been redefined since he became involved in the industry two decades ago.
Askew came from telecommunications and internet conglomerate SoftBank when the dot-com bust changed the funding landscape. As many funds shrank in size, REV started its first £70m ($100m) venture fund.
“We came onboard when Elsevier was about to embark on its early steps to its vocational journey going from largely print to beyond digital.
“The idea was to be three to seven years ahead of where traditional media groups were at the time. We were investing from a market sensing and strategic rationale, but it was always financially focused.
“Be strategic through the three to seven-year market lens; make money by investing in promising early-stage entrepreneurs.”
Askew added that the fund structure had a limited partner (LP) – general partner (GP) relationship, focusing on series A to C rounds and providing between $5m and $10m per deal.
Most of REV’s portfolio companies are US-based and half of these are in Silicon Valley. “Apart from San Francisco, we have done deals in Los Angeles, Austin, New York, the Midwest and Seattle,” Askew said.
However, REV’s team members are all based in London, UK, even though its international portfolio also includes companies in Israel and Germany. “We do a lot of travelling. I cannot think of another fund that has such a geographic footprint and has been doing this for as long as we have.”
Askew said as the fund had been financially successful, he and his team were at liberty to invest in strategically aligned deals for a long time.
“The first wave is around content replatforming – we went from print to digital, which is really what the 2000s was about.
“Our natural aim was to research digital content technologies including peer-to-peer and structured data – and that was what our earlier portfolio looked like.”
REV has invested alongside In-Q-Tel, the US intelligence community’s non-profit strategic venture investment unit. Askew said: “That gave us an early introduction to [big data processor] Palantir and we were very fortunate to be one of the first ones to put money into it.”
Askew added that REV and In-Q-Tel shared many resemblances. “Our journeys were similar because the technologies we were looking at were the same.” Threat analysis software provider Recorded Future is also among the companies that received funding from REV and In-Q-Tel.
Askew said after the dot-com bubble, REV started to appreciate the emergence of verticals that were similar to the media industry’s transformations.
“Healthcare in the US went from being physician-prescribed to consumer-led, as health plans shifted their focus to the consumer-driven market.” In addition, “education as we know it has its days numbered, and the notion of self-directed learning is through modernisation of information”.
REV began to invest in these verticals as these changes occurred. “Since then, two-thirds of our portfolio are in one of these verticals – healthcare, education, legal, finance and agriculture,” although Relx was not always involved in all of these, “there is a big correlation because all industries are now being reinvented through data analytics and AI.”
Instead of publishing, “we were looking at next-generation data, analytics and other technologies in the 2000s”.
More recently, REV has invested in information analysis software developer Quid. “It is a powerful AI and machine learning company that looks at Reed’s documents on a massive scale and presents them to humans.
“With Quid, we can understand what corporate data are talking about and navigate through them quickly – it cuts out weeks of traditional analytics time which was really hard for a real-time database.”
The focus over time remained the same because REV had upheld its vision that was three to seven years ahead, Askew explained. “Having that structure, we raise money every three to five years.
“Strategically, there is no such thing as a silver bullet in any industry – particularly in corporate venturing. What is important is the landscape that we are looking at. You have the broad market lensing between 2,000 and 3,000 companies a year, where you get to dive in a bit deeper until you get a deal.
“That is an inverted pyramid – one or two drops come out at the bottom from 2,000 or 3,000 companies. Each layer is like a fractional distillation process.”
Having had three chief executives, three chief financial officers and three chairmen, Askew is proud that the structure of REV had only been reinforced.
“I think we have to stick to our guns and stick to our portfolio companies.” Askew believes only mutual trust can create a win-win situation: “At the end of the day, it all comes down to individuals. And the entrepreneur is the centre of that.”
– Photo courtesy of Tony Askew
