How Kompas VC is navigating a fragmented world with a regionally sensitive strategy

In a world riven by cultural differences, political divisions, and geopolitical disputes, investors are facing a challenging environment when hunting for startups that can grow large enough to deliver venture-scale returns. However, Kompas VC, a venture firm with offices in Amsterdam, Copenhagen, Berlin, and Tel Aviv, has developed a regionally sensitive strategy to navigate this fragmented world and invest in startups that can thrive. Kompas VC has just closed a new €160 million fund ($187.5 million), which it will use to back startups that tackle core industrial competitiveness challenges, from manufacturing and supply chains to critical infrastructure and sustainability.

According to Sebastian Peck, partner at Kompas VC, the firm sees the world as falling into three main spheres of economic activity: the U.S., Europe, and China. "We certainly see today that these three domains follow very, very different trajectories," Peck told TechCrunch. The firm's focus is on startups working on decarbonization, productivity, and risk management in the physical world, particularly in areas related to producing physical goods.

Peck noted that while themes like AI and fast growth are currently popular, Kompas VC's focus on industrial challenges has remained steady. "We've found our niche," he said. This niche is broad enough to encompass a range of startups, particularly in the area of reshoring, which is a growing trend in many markets.

Kompas VC's newly raised second fund will allow it to lead early-stage rounds with checks ranging from €3 million to €5 million. As a European fund, Kompas has access to a range of founders and startups in the region, but it must carefully consider how global fragmentation might limit the potential for some startups to deliver venture returns. Peck cited prefab housing as an example of a solution that is popular in Scandinavian countries but not as widely adopted in other parts of Europe or the U.S.

The shifting landscape poses a challenge, but also an opportunity for a smaller investor like Kompas VC. "I think there's a great space for highly focused, highly specialized, smaller funds like ours to be the first check-in and bring sweep up certain themes and certain founders," Peck said. With a long-term investment horizon of 10-15 years, Kompas VC is well-positioned to navigate the complexities of a fragmented world and support startups that can thrive in this environment.

Kompas VC's approach is built on a deep understanding of the regional differences that shape the startup landscape. By taking a regionally sensitive approach, the firm aims to identify opportunities that might be overlooked by larger investors with a more generalist approach. As Peck noted, "We are investing over 10-, 15-year horizons.

That's a few legislative periods to bridge, and sometimes things swing in unexpected directions."