Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Evangelos Simoudis was recorded in November 2018.
Evangelos Simoudis, Founder and Managing Director at Synapse Partners, takes us on a deep dive into AI investing.
Sramana Mitra: Let’s get acquainted. Tell us about the fund’s investing focus and your background. What size investments do you make? What kind of things do you like to dig into?
Evangelos Simoudis: I’m based in Silicon Valley. I’ve been here for about 30 years now.
Sramana Mitra: Where are you from?
Evangelos Simoudis: I’m originally from Greece. I came to the US about 40 years ago to go to school and I ended up staying. I started my career as an engineer. My Ph.D. is in Computer Science and Machine Learning.
Sramana Mitra: Your time has come.
Evangelos Simoudis: Yes. This is the second AI spring that I’m participating in. During the first spring, I did my startup. I came to the Valley in 1990 and worked in startups and large corporations. In 2000, I moved over and became a partner at Apax Partners. Then I moved to Trident Capital. In about two and a half years, we started Synapse. We invest exclusively in startups that develop enterprise applications combining big data with AI-based data exploitation technology. We’re not only looking at machine learning but other AI technologies that can take advantage of data and can convert data to insight.
Sramana Mitra: How big is the fund?
Evangelos Simoudis: We have a very interesting structure where we invest private money and we also collaborate in a number of corporations. The structure that I wanted to give to Synapse came out of my experience not only as an entrepreneur but also as an investor with more traditional institutional venture firms.
There are three pillars to what we do. The first is, we focus exclusively on a particular sector. We invest in both horizontal and vertical. With regards to the vertical applications, we look at three industries – automotive, financial services, and health. In order to execute on this vertical industry focus, we partner quite closely with corporations in these three industries. When I say we partner, we spend considerable amount of time with top executives and try to understand the strategic problems they have which can be addressed with the application of big data and AI.
Today about 60% of our investment comes through this interaction. There’s a third pillar in that we maintain quite a significant database of startups that work in these areas that we invest in. Our database today has about 5,000 startups that we track. We track many different attributes of those startups. We try to practice what we preach. We analyze that data to identify important investment opportunities. We have a portfolio today of 15 companies. We’ve had two exits so far. Of the 15 active companies, at least half came from our analysis of data.