VC Profile: Apex Ventures

Apex Ventures was founded in 2017 and held a first close for its debut fund in June 2017, followed by a final close on just less than €20m in December 2018. The firm planned to make 18 investments in total from the first fund and has so far made 14.

"Originally, Apex's three founders did not want to create a fund, but they were finding similar targets interesting," says Wolfgang Neubert, venture partner at Apex Ventures. "They had to get together their own funds per deal, and that was an obstacle, so they decided to form a fund and out of that we could be quicker, more flexible and more attractive. They started strategically with a small first-time fund as it can be difficult, since there are strong competitors in the landscape. The firm started with a focus on early-stage and technology companies, taking a specific approach based on active company building, helping them to develop in the right direction."

"I became involved as one of the first investors in the fund," Neubert says, adding that the firm focused on digital health at an early stage, although the first fund was not dedicated solely to this strategy. "One of the first startup investments Apex was in was in digital health; Vienna has a very strong backbone due to the AKH, which is the largest European hospital and has huge databases, attracting huge amounts of high-level scientists. After backing Contextflow, we were then flooded with digital health enquiries."

The VC's latest fund is targeting €50m and held a first close on €13m in Q1 2020. The minimum commitment for institutional investors to the Austria-domiciled vehicle is €1m. The fund is currently backed largely by DACH investors and is seeking further institutional LPs.

The fund will be headed by partner Gordon Euller, a qualified doctor and radiologist who has previously worked at AKH, Vienna's General Hospital, as well as at McKinsey in London.

The vehicle will focus solely on digital health startups that Apex believes have a strong technology concept, as well as some unique IP behind them and a multidisciplinary team. The fund will deploy initial equity tickets of €300,000-800,000 in pre-seed and seed rounds and reserve up to €2m for future rounds. The fund will focus on DACH-based companies, as well as those based in the rest of Europe, Israel and the US.

Venture partner Kelly Klein heads the firm's activities in Israel: "I have experience in sourcing early-stage Israeli tech companies and helping them with business development, sales and raising further fundraising rounds. Israel has become a global leader in innovation; it has more startups per capita than any other country, and it has one of the highest R&D expenditures. The IDF trains people and has technology units; young people who go into those units get social networks but are also trained in new technologies, and they are then equipped to set up businesses. Unit 8200 is the signalling and code deciphering unit and a lot of high-profile CEOs and startup exits come from there."

A healthy future
"Digital health is really prospering in Israel," says Klein, "and one way this is done is by leveraging its medical data; Israel has 25 years of data and 90% of this is digitalised." Klein also explains that the fund's European network will assist Israel-based startups: "One of the most important things once an Israeli startup gets funding is to internationalise it, and Apex can help to expand in the US, Europe and Asia."

The firm believes digital health businesses will be increasingly important in the wake of the coronavirus pandemic, says Neubert: "We are looking for areas where software meets hardware, and where technology meets medical data. Covid-19 has made it clear that we must change how we treat people and how we predict and analyse illness. To take an example from radiology, we have a huge growing database of radiology images, the machinery is expanding a lot, but the number of trained radiologists who can read these images is becoming smaller. The work is done under time pressure and does not use digital instruments; as humans, we can't deal with the challenges ahead."

One such example is MindPeak, a current portfolio company of Apex after it invested in September 2019. MindPeak produces software to enable pathologists to automate and digitalise the recognition of tumours.

Neubert emphasises that the fund's focus encompasses more than just startups looking to treat Covid-19 and that the industry as a whole must also think beyond this in the longer term. "Many startups are looking to work against Covid-19, but overall that is not sustainable. What is not articulated strongly enough is the many other illnesses and diseases that need to be treated; something like skin cancer, for example, could increase as people are not getting it diagnosed or prevented. Patients can't wait with cancer, and that is just one of them. This has been given a lower priority and is not being treated enough, so there is a huge backlog."

The fund has already begun investing and has a number of investments in the pipeline to be announced in the coming months. Apex backed a follow-on round for Conextflow in June 2020, having first invested in the company in 2018. The fund is likely to make 20-25 investments in total.

Says Klein: "We are open to speaking with startups; there are a lot of funds right now that are not looking at startups because they are spending time looking at their existing portfolios or allocating a part of their funds to bailing out their companies, but we are open."

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