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 duo at the helm of the firm who met when they were six years old, have already secured $30 million and plan to raise as much as $70 million for their initial 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 anything between $1 million and $10 million per deal.
While Pizzolato has already been an investor working for Felix Capital and Vitruvian Partners before, his co-founder Cam Rail has a different background. He joined one of the biggest market makers in the world and then moved to Macquarie Bank in London to build the prop trading desk. He then created his own startup called Stackup Risk and sold it to Creativemass.
What makes Defiant different from your average early stage fund is that the company wants to rely heavily on data to find the next promising investment. For that reason, the firm is building its own suite of products that will help the investment team and also foster inbound interest.
“Our thesis is that the future of venture is going to be pretty different to what it is today. And it’s going to be a lot more technologically enabled, a lot more sophisticated around the use of data, AI products,” managing partner Joseph Pizzolato told TechCrunch.
“We dedicate a third of our budget as a fund to product building. Again, I don’t think there’s any fund in Europe who 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 they were back then.
Defiant’s main product is Morpheus, an internal tool to source 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, cost of acquisition, 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 scoring formula for those startups.
“And then what we do is we enrich it with external sources. 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 pay for a bunch of data sets. We pull down and we build these profiles,” Pizzolato said.
Over time, as the Defiant team uploads more data and sees how companies evolve stage after stage, it can spot some over-performers and under-performers. This tools acts as the data infrastructure backbone of the VC firm.
The second product is called Blueprint, and it’s 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 get 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 dealflow and gather fresh data for Defiant’s own database. Defiant also offers templates for KPI dashboards or Series A funding decks.
Up next, the firm is working on a macro analysis 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, such as general partners at 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.
