"But uncertainty is a challenge for everyone."
Elena Volotovskaya is CEO of Softline Venture Partners (SVP), a corporate venture fund of Softline. In 2008 Elena graduated with an MBA in Finance from California State East Bay University and joined the team of Softline as Investment Director. That very year Softline Venture Partners was founded with Elena Volotovskaya being appointed its head. Since then Elena has been successfully managing the fund’s operations.
SVP has already invested about US$25 million in 35 portfolio companies with the amount of investment in one project ranging from $200,000 to $1 million. The fund’s investment focus lies in the spheres of Cybersecurity, Cloud computing, Big Data, Artificial Intelligence, Internet of Things, Edge Computing startups.
Elena’s expertise lies in Venture investments, Mergers and Acquisitions and Female leadership. The team knows her as a person who keeps abreast of the constantly changing world of VCs, monitors big deals and the upcoming trends, and shares them with the community.
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Table of Contents
We are thrilled to have you join us today, welcome to ValiantCEO Magazine’s exclusive interview! Let’s start off with a little introduction. Tell our readers a bit about yourself and your company.
Elena Volotovskaya: I am Elena Volotovskaya, CEO of Softline Venture Partners, Vice-President of Investments at Softline Group. Softline Venture Partners is a corporate venture capital fund of Softline Group. It was established in 2008. Over the years, we’ve invested over $50 million in various projects. At the moment, there are about 30 projects in the fund’s portfolio. In 2021, the fund closed eight deals, including follow-on deals with previously invested companies; the portfolio was enriched with five new companies, including the parking lot booking and payment service Parkly.
Softline Venture Partners specializes in investing in early-stage projects in Cybersecurity, Edtech, Big Data, E-commerce, FinTech, IoT, and SaaS. As part of Softline Group, Softline Venture Partners aims to execute its three-dimensional growth strategy to expand geography, solution portfolio, and sales channels, and to support disruptive technology projects in non-strategic areas.
Headquartered in London, Softline is a leading global provider of digital transformation and information security solutions and services. The company has offices in more than 50 countries, including Asia, Latin America, Eastern Europe, and Africa. In October 2021, the company conducted an IPO on the London Stock Exchange.
I graduated with honors from the Department of World Economy. In 2006, I earned a PhD in Economics and continued my education at the California State University, receiving an MBA degree in 2008. I joined Softline Venture Partners that same year, which means that I’ve been a part of this fund practically since its inception. A few years later, I was appointed to head it
2020 and 2021 threw a lot of curve balls into business on a global scale. Based on the experience gleaned in the past couple years, how can businesses thrive in 2022? What lessons have you learned?
Elena Volotovskaya: As the first half of this year has shown, it is difficult to be prepared for anything even with all the experience we already have. The world throws us more and more curveballs. So the main lesson for us has been the need to become more flexible and learn to adapt quickly. Fortunately, being a part of an IT company, we were able to do this quite easily.
This year’s challenges are quite different from the previous two years. The venture capital market is going through a major upheaval, I would even call it a transformation. The investors are moving away from putting a premium on growth to emphasizing current profitability figures. Many startups continue to deny changes in their valuation changes, but they risk running out of capital before they come to terms with the new reality.
A market reset creates an opportunity to pay lower prices for future investments, to back startups that show greater financial discipline, and to face less competition from rival startups funded by major companies, such as Softbank.
The pandemic seems to keep on disrupting the economy, what should businesses focus on in 2022? What advice would you share?
Elena Volotovskaya: In 2022, the pandemic stopped influencing the global business and economy directly as it did in 2020, but now we are all experiencing the economic shockwave.
Looking a few years ahead, businesses should prepare for an economic downturn and the so-called VC Winter. Those startups, whose viability depends on venture investment, should take a hard look at their strategy. I would advise the founders to concentrate on the quality of their products and services and make self-sufficiency their top priority.
Investments cannot die totally, but the focus will shift to Seed and series A rounds. According to the latest Pitchbook report on the US venture capital trends, the current situation seems to be the best for Seed investments, and their number and the size of deals remain high.
How has the pandemic changed your industry and how have you adapted?
Elena Volotovskaya: Unlike individual entrepreneurs, small business owners, and the public service sector, the pandemic was a time of prosperity for VCs and CVCs.
With everybody sheltering in their homes, hundreds of delivery, streaming, remote medical, educational, and banking startups appeared in order to help us survive this isolation, and investors knew how to make the best use out of the situation.
Before Covid-19, CVCs used to have some trust issues with startups, because funding is fully dependent on the prosperity of the parent company or corporation and startups were reluctant to come there for financing. But Softline is one of the global providers of IT solutions and services and during more than 10 years of investments we built a strong reputation and credibility as reliable investors.
That’s why I can say that the pandemic didn’t cause financial losses for the fund, but, instead, added new great companies to Softline Venture Partners portfolio.
What advice do you wish you received when the pandemic started and what do you intend on improving in 2022?
Elena Volotovskaya: Looking back to 2020, I would permit myself to take more risks. But it was hardly possible at that time because we are all humans, after all. And besides the economic turbulence, there was a massive social anxiety about simply surviving Covid-19 and its aftereffects, about well-being of one’s family, friends, and colleagues, about the lockdown. So it was a real challenge to cope with the inner panic and make business decisions calmly and in cold blood.
In 2020, the pandemic caught us all off guard, and that’s why it was a big stress for the global business and economy. Today, we have a rainy day fund and are constantly monitoring the global situation to make predictions and act accordingly.
Online business surged higher than ever, B2B, B2C, online shopping, virtual meetings, remote work, Zoom medical consultations, what are your expectations for 2022?
Elena Volotovskaya: Last year, cybersecurity attracted a record amount of venture capital, and unicorns seemed to appear on a weekly basis. Even this year, as the venture capital market is changing, there are many new unicorns in cybersecurity. Specific areas include startups in DevSecOps, where security is integrated into the software development process, cloud security, and any technology related to personal identity and authentication. Anything that contributes to a company’s digital transformation will continue to be funded.
How many hours a day do you spend in front of a screen?
Elena Volotovskaya: At least 12 hours, sometimes more, especially when traveling and there is a change in time zones. It’s important to be available because a certain issue can come up at any moment.
The majority of executives use stories to persuade and communicate in the workplace. Can you share with our readers examples of how you implement that in your business to communicate effectively with your team?
Elena Volotovskaya: We hold a weekly status call with the entire fund team and a daily one with the investment director and analysts. I use examples from my own professional experience as such stories, and this does have a very encouraging and motivating effect on the team, especially in difficult situations. It is important for people to know that they don’t have to deal with a problem alone. This is equally true of our portfolio companies, for whom psychological support is often just as important as financing.
Business is all about overcoming obstacles and creating opportunities for growth. What do you see as the real challenge right now?
Elena Volotovskaya: Venture capitalists are by definition some of the greatest optimists in the professional world. But uncertainty is a challenge for everyone. It is far from clear how long the venture capital market will take to reboot and how many of today’s investors and startups will be left standing when that happens. The venture capital market is a very high-risk business. But I like to tell myself that “We are in this game to beat the odds.”
In 2022, what are you most interested in learning about? Crypto, NFTs, online marketing, or any other skill sets? Please share your motivations.
Elena Volotovskaya: I have a great personal interest in studying different cultures. Today, Softline Venture Partners is focused on the APAC market, which is very heterogeneous. Each country, even certain regions of one country, has various approaches to business culture, the processes of decision making, management, even time.
It’s crucial to understand these differences to successfully operate in the chosen markets, because in Asia you only have one chance to make a good impression. It takes time and effort to prepare, but as a result you have a chance to find reliable partners and new investing opportunities for the fund.
A record 4.4 million Americans left their jobs in September in 2021, accelerating a trend that has become known as the Great Resignation. 47% of people plan to leave their job during 2022. Most are leaving because of their boss or their company culture. 82% of people feel unheard, undervalued and misunderstood in the workplace. Do you think leaders see the data and think “that’s not me – I’m not that boss they don’t want to work for? What changes do you think need to happen?
Elena Volotovskaya: I think that the Great Resignation became the result of multiple internal management problems that were accumulating for years and burst into the open under the influence of Covid. First of all, employees become more aware of their mental health and work-life balance.
This trend emerged within Millenial and Gen Z generations, who are now the labor market’s most active participants, and that’s why the managers, who generally represent an older generation, perceive such attitudes as laziness and lack of diligence. Covid made it obvious for people how vulnerable and fragile our lives are, and made them take better care of their mental health.
Moreover, the lockdown made remote work a reality, which is why most workers do not understand the necessity of returning to the offices, and companies have to take this in consideration and offer better conditions to retain workers.
On a lighter note, if you had the ability to pick any business superpower, what would it be and how would you put it into practice?
Elena Volotovskaya: Well, as a person who is in charge of a venture capital fund, I would choose to foresee the future. The answer is a low-hanging fruit, and I think that 90% of managers and entrepreneurs would choose this superpower. At the very least I’d like to know what AI and ML will achieve in the coming years and discover the highly promising technologies.
What does “success” in 2022 mean to you? It could be on a personal or business level, please share your vision.
Elena Volotovskaya: From a professional point of view, it would probably be a successful entry into the Southeast Asia market. We are still at the start of this journey. We recently had our first business mission to Singapore.
We got to know the market and talked about ourselves, laying the first brick in the foundation of future investments in one of today’s most promising regions. And, of course, the year wouldn’t be complete without several successful exits and promising additions to the fund’s portfolio.
Jerome Knyszewski, VIP Contributor to ValiantCEO and the host of this interview would like to thank Elena Volotovskaya for taking the time to do this interview and share her knowledge and experience with our readers.
If you would like to get in touch with Elena Volotovskaya or her company, you can do it through her – Linkedin Page
Disclaimer: The ValiantCEO Community welcomes voices from many spheres on our open platform. We publish pieces as written by outside contributors with a wide range of opinions, which don’t necessarily reflect our own. Community stories are not commissioned by our editorial team and must meet our guidelines prior to being published.
