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The search for the urban unicorn

Jack Aldane spoke with Mark Paris, Managing Partner, Urban Us and Managing Director of URBAN-X, which is providing investment to support urban tech start-ups
Mark Paris, Managing Partner, Urban Us and Managing Director of URBAN-X
Photo: Jenna Bascom

Urban Us funds urban tech companies and creates investment vehicles for such projects. How do you source and uncover such companies and what are you looking for in terms of a business being investable?

As in all venture capital, you’re searching for start-up founders who have thought about a problem, like, let’s say, the potential tenant who does not know the condition of an apartment or the quality of a landlord before they rent. Then you want to know that the founder has a solution and a way to inform others about that solution.

One of the most important things is to assess the size of the opportunity. In the case of apartment ratings, you don’t have to think really hard to see that there’s a huge market out there.

The market opportunity needs to be substantial otherwise the venture investment maths don’t work. As many people know, the majority of early stage start-ups should probably fail. A few may make enough to make a bit of payback, but it’s those one or two that make a huge payback for a venture capital firm to pay a market return to its limited partners who invest in the fund. If a start-up doesn’t pass the market-size test, we cannot take the risk to invest in it.

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