Defiant is a new early stage VC firm focused on B2B SaaS and fintech coming out of stealth today. Joseph Pizzolato (pictured right) and Cam Rail (pictured left), the pair at the helm of the firm who met when they were six years old, have already secured $30 million and plan to raise up to $70 million for their seed fund.
Based in London and Lisbon, Defiant plans to invest in early-stage startups at the “late seed” or Series A stages. However, unlike many of the new early-stage VC firms, Defiant is willing to lead or co-lead funding rounds. The goal is to spend something between $1 million and $10 million per deal.
While Pizzolato has already been an investor working for Felix Capital and Vitruvian Partners previously, his co-founder Cam Rail has a different background. He joined one of the world’s largest market makers and then moved to Macquarie Bank in London to build the backers’ trading desk. He then created his own startup called Stackup Risk and sold it to Creativemass.
What makes Defiant different from your average seed-stage fund is that the company wants to rely heavily on data to find the next promising investment. For this reason, the firm is building its own suite of products that will help the investment team and also drive interest internally.
“Our thesis is that the future of entrepreneurship will be very different from what it is today. And it will be much more technologically enabled, much more sophisticated around the use of data, AI products,” managing partner Joseph Pizzolato told TechCrunch.
“We dedicate a third of our budget as a product building fund. Again, I don’t think there’s any fund in Europe that does that from an OPEX perspective,” he added later in the conversation.
According to him, most VC firms haven’t changed much over the past 50 years. Even newer firms are run the same way as back then.
Defiant’s flagship product is Morpheus, an internal tool to get a new deal. When users upload a pitch deck to the platform, it is automatically analyzed by an LLM to extract relevant data, such as annual recurring revenue, acquisition cost, number of employees, etc.
Everything is then stored in a database so that it can serve as the basis for a competitive analysis. Companies can be filtered and sorted based on different criteria. Defiant has also built a valuation formula for those startups.
“And then what we do is we outsource it. We go to TechCrunch, we go to LinkedIn, we go to PitchBook. We go to whatever it is, anything in the public domain. We also charge for a variety of data sets. We step back and build these profiles,” Pizzolato said.
Over time, as Defiant’s team uploads more data and sees how companies evolve stage by stage, it can spot some over- and under-performers. This tool acts as the backbone of the VC firm’s data infrastructure.
The second product is called Blueprint and is a way to help founders understand how their startups stack up against the competition and what a VC thinks about the business.
Founders enter data and receive a report that ranks their company’s metrics against similar companies in the space. Of course, this tool is also a great way to generate deal flow and collect new data for Defiant’s own database. Defiant also offers templates for KPI dashboards or the Series A funding deck.
Next, the firm is working on a macro analytics product to find the next big investment themes based on large data sets.
So far, Defiant has raised money from family offices and individuals working for the tech industry, as general partners in Atomico, Cherry Ventures, Hedosophia, Salesforce Ventures, Earlybird, Vitruvian, GRO, Mubadala and Seek Ventures. Now, let’s see if the Defiant team can turn this investment thesis into a portfolio of 15 to 20 high-performing startups.
