Driven by sustainability, venture models are evolving.

This article is a translation from Martin Kring’s interview in the Danish tech- and startup media, Bootstrapping.dk. Read the original Danish article by Nikolaj Stein Andersen via this link.

KRING, a company working with venture building and growth of new businesses within health-tech and green-tech, aims to double its portfolio of 11 ventures over the next two years. We have spoken with co-founder and partner Martin Kring, who has developed many of his own concepts for his toolbox for financing startups.

– You focus on creating financially sustainable businesses rather than chasing one unicorn (the Zebra model). What does your model suggest about this strategy, and what do you see as the biggest advantages for investors and the companies you support?

“At KRING, we have over the years developed an approach called Speedbooting (our method for rapid growth and innovation) that focuses on innovation, co-creation and scalable growth. The method is used both to create new businesses through our Venture Building and to help existing early-stage startups get an extra good start in life.

By focusing on creating “zebra” companies that balance responsible growth and profitability, we reduce the risk of large losses and wasted resources, which can sometimes arise in the pursuit of a single “unicorn”. This approach allows us to support more companies that deliver value early and consistently. We see it as an opportunity to create a portfolio of successful businesses, each with the potential to create a positive impact.

For investors, this means access to a more robust and diversified portfolio with lower risk and stable returns. Companies receive support to grow at their own pace and can thus build long-term value without being pressured by extreme growth, which often damages the foundation. The downside is that the process can take longer, but that’s what we are constantly working to optimize via Speedbooting”.

– Do you find that too few entrepreneurs start scaling before they have product-market fit or proof-of-concept?

“Yes, unfortunately we often see entrepreneurs trying to scale too early, before they have achieved a solid product-market fit or proof-of-business. It can be tempting to accelerate growth quickly to attract investors, but without a validated business model it can lead to unnecessary costs and wasted resources.

At KRING we focus on ensuring a sensible foundation. We help companies identify their product, understand their customers and validate their market position before they scale. In addition, we use our corporate network early in the process to clarify possible business models and distribution channels. This increases the chances of success when companies are ready for growth, because they already have good insight and a tested value proposition.”

– You validate early in the market and often recruit experienced co-founders and CEOs to realize your ideas. Is this the key to creating more financially sustainable startups, where up to 70% otherwise go down after 5 years?

“It is always a challenge to predict what will hit the spot in the market, especially with the rapid changes we see today. This applies regardless of whether they are ideas we gather ourselves, or whether they are co-founder’s own ideas that we need to realize together. I think our early market validation means a lot. By testing ideas early and involving the market in the development process, we only invest in projects with real needs and potential. This reduces the risk. But also our hands-on approach, combined with experienced co-founders and CEOs contributes. The team and its composition are super important.

When we put together the right team and board, we increase the likelihood that the companies will survive and grow. The key to creating financially sustainable startups lies in this combination of early validation and strong leadership. It helps us avoid many of the pitfalls that cause startups to drop out early.”

– In addition to go-to-market, team and product-market fit, you also help startups with funding strategies. Why is it so important, and how do you support them in the long term towards series-A?

“Once the foundation is in place, we focus on creating a solid funding strategy that supports long-term growth. A strong funding strategy is crucial because it’s not just about raising capital, but about securing the right type of capital at the right time. Premature or incorrect funding can put unnecessary pressure on growth and create the wrong priorities for value creation.

Therefore, we have increasingly integrated funding strategies into our Speedbooting method, where we help startups attract the right investors early on who can invest with us. In addition, plan their journey towards larger funding rounds such as series-A and alternative funding sources. Even when we are no longer directly involved, we now work to ensure that companies have a clear plan for how they mature and continue their growth journey.”

– What results do you see in the companies you have through KRING Speedbooting? Can you mention some examples of companies that have done particularly well?

“We are seeing good progress from several companies in the portfolio:

TestaViva, founded in 2017, is a platform that today helps over 150,000 Danes to manage legal matters through partners such as AL-Bank, Nykredit, Danske Bank, Nordea, TopDanmark, Mercur Andelskasse. With an annual growth of 50% and an NPS of over 75, and more than 60 employees, the company is ready for Nordic expansion based on its own earnings.

Valified, which pivoted in 2020, today helps over 2,300 SMEs with ESG and sustainable transition via partners such as Nykredit, SparNord, AL Bank and Tryg. With triple-digit growth rates and a positive operating result in sight, the company is preparing for an upcoming international scaling in 2025. There are currently approximately 20 employees.

Welldium, founded in 2020, is a platform that helps over 1,000 European health therapists and their many clients with dietary supplements. Has great growth which has been further strengthened by a merger with Dutch DeltaStar and is on its way to a positive operating result. There are currently approximately 40 employees.

Bodil Energi, which was also founded in 2020, has made energy optimization of homes and buildings simple for private individuals and SMEs through partners such as Jyske Bank, Nordea, EDC and Norlys. With a customer satisfaction rating of NPS +60 and a nationwide presence, they are ready for further growth. There are currently approximately 15 employees.

We have also launched four new health-tech companies, including Triba Health, which specializes in interdisciplinary lifestyle interventions to prevent and reverse type 2 diabetes. Early data show high customer loyalty (NPS +64) and significant blood sugar reductions (-17 mmol/mol after 6 months), which are comparable to GLP-1 drugs such as Ozempic or insulin. These promising results have led to partnerships with insurance companies to further validate the results through clinical studies, with the goal of reducing the impact of the disease for patients, insurance companies and employers. Triba also offers an important no-cure-no-pay guarantee, which underlines their commitment to effective results.”

– The market for startup financing is developing rapidly with new players. You hardly mean that more startups should look to the classic venture model as a path to growth?

“Not all startups immediately fit into the traditional VC model, and this is probably due to several factors. An increasing focus on sustainability and impact, and that founders have become more realistic in what it takes to build a company and therefore seek flexibility, support and a more long-term vision. We also see many investors moving in the same direction in the desire to create long-term value and sustainable impact.

In addition, there are alternative forms of financing, which we ourselves work with at KRING. In addition to financing in venture building and the early-stage phase, we have a tradition of co-creation. In fact, KRING Speedbooting is designed for that. This means that a larger company or Private Equity fund helps finance a new startup venture, because it can support an important part of their growth strategy, which is aligned with our start-up’s vision. This usually happens without ownership. But we also work with more classic VCs on co-investment partnerships later in our process, as this provides a number of benefits for all parties. We have also slowly started looking at revenue-based finance, which fits well with our focus on quickly creating cash-positive startups with a good data foundation.

So we just see it as a really positive development. There is a strong need for more capital to flow to companies with a focus on sustainable transition and impact in particular. Therefore, we will see the classic VC model change in line with the demands of the future and other financing solutions. Therefore, we will probably also experience classic VC being under change like everything else.”