Verissimo Ventures Monthly: June 2024

Product-Priority Fit

Verissimo Ventures is a Pre-seed and Seed Venture Fund based in Israel and the US. We invest primarily in enterprise software companies and take a fundamentals-driven approach to early-stage investing. We work closely with founders to help them build the strongest, most fundamentally sound businesses with potential for explosive growth and a meaningful impact on the market.

We were founded in 2020 and are currently investing out of Fund 2.

Thoughts on Investing and Starting Up

As a VC, we are always iterating and learning. Part of our process is to develop frameworks that structure our thinking and guide our investment decisions. One such framework we use is Product-Priority Fit.

From Product-Market Fit to Product-Priority Fit

At its core, product-market fit aims to prove that a product solves a real problem in a market. The concept of product-priority fit shifts the focus from problem identification to understanding the urgency of addressing it in a given market. We identify a class of problems that we term "evergreen problems" – issues that persist over time, always ebbing and flowing between better or worse. Not all problems require immediate solutions, some evergreen problems can remain unaddressed for long periods before becoming urgent. The question of product-priority fit is not only whether a product addresses an existing problem, but whether solving that problem is a priority for businesses in the target market right now.

Frameworks and Real-World Applications

One example is the evergreen problem of data consolidation and cleanliness. A company may solve this in one year, doing a massive overhaul to standardize and structure their data stack, only to have it come back a year later. This is a natural progression - as businesses grow and expand, more workflows will be created, with more data silos being created. More data, more problems. Businesses are currently rushing to implement AI into their offerings. Doing so effectively requires clean and accessible data, creating an immediate and pressing need for solutions that can enhance data quality and accessibility. In this context, startups that address data cleanliness and integration are not only solving an evergreen problem, but also providing an urgent solution that enables businesses to capitalize on the AI revolution. The result: this evergreen problem just became a priority for a huge number of companies.

Our Investment Philosophy

When formulating our investment theses, we look beyond the problem and solution in a market, peeling back another layer of the story to understand the urgency in a market and how it will manifest in the near, mid and long term. We ask founders to articulate why their problem-solution combo is a priority for their customers. Timing is a huge part of the venture investing business which we cannot control, but we do our best to de-risk timing issues by pushing on priority and urgency to drive more immediate adoption. We go in knowing that many things will change in the lifecycle of a startup, but we also know that if a product can’t get attention early, it will be very difficult to properly iterate and then scale up into a successful business.

Portfolio Highlights

Firefly is a management layer for Infrastructure-as-Code that allows SREs to to gain comprehensive visibility and control over their entire cloud footprint. Their solution performs discovery and inventory of all assets, detects drift, predicts deployment implications, classifies assets using Policy-as-Code, and manages a single inventory of all cloud resources across Multi-Cloud and Kubernetes clusters.

Firefly recently raised $23M Series A led by Vertex Ventures. Their latest success also comes on the heels of tragedy, as co-founder CTO Joseph “Sefi” Genis was among the hundreds killed by Hamas in October 2023 at the now-infamous Nova music festival.

Botika harnesses the power of Generative AI to help fashion retailers create stunning product photos. Using Botika's AI-generated fashion models, retailers can transform their existing photos into a range of professional, studio-grade product images, reducing photo production costs and time to market.

CCX is a software platform that streamlines and optimizes the market access process between pharma companies and payers. With three modules—Planning, Negotiation, and Admin—users can model deals, efficiently structure and revise terms, and manage data comprehensively. This meaningfully reduces the time to market for new pharmaceuticals, getting patients the treatments they need faster.

Toybox redefines creative play with its advanced 3D printer, enabling children to print custom toys effortlessly. The user-friendly platform, extensive licensed design catalog, and material subscription service make Toybox a leader in innovative play solutions.

Verissimo Team

This summer, we had the pleasure of working with Zac, our intern from the US. He actively participated in our portfolio meetings and sharpened his financial modeling expertise. We wish him the best as he starts university this semester!