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Global Millennial Capital founder Andreea Danila is using deep learning and artificial intelligence to disrupt the traditional venture capital investment process.
Andreea Danila, Founder and Board Member Global Millennial Capital, used to research and test the randomness of returns distribution of venture capital early stage investments with the aim to generate top quartile returns outcomes, and for many, that would have been too complex a problem to solve. Yet, Danila, having studied at Massachusetts Institute of Technology and Harvard Business School, has always aimed high- and that’s the mindset with which she tackled this issue in front of her as well.
“Today, Global Millennial Capital is the first investor to introduce the concept of artificial intelligence (AI) and deep learning to revolutionize the traditional way of investment evaluation and decision approach,” Danila says. “As the first venture capital firm to make strategic investments on a relatively new data-driven thesis, we focus our efforts on a continuous basis to support our goals of achieving a leading position as an emerging fund manager, and, most importantly, as a homegrown brand from the UAE.”
This ethos is supported by Global Millennial Capital’s development of a proprietary data science algorithm that aims to generate statistically correct returns in early-stage deals. “As a data-driven investor, we even challenge the effectiveness of our own investing style and value creation approach as participants in the digital economy,” Danila explains. “For example, for verticals such as cryptocurrencies and blockchain, the average time to reach a unicorn valuation is around 18-24 months, with some examples in the US, such as security audit firm for the Web3 industry, Certik, and non-fungible token (NFT) domain name provider and digital identity platform, Unstoppable Domains, being valued at above US$1 billion in Series A itself. At the same time, we analyze the cycles of disruptions as it pertains to funding velocity, a metric we use internally in our data algorithm, shorter by about three to five years.”
Danila adds that the Global Millennial Capital team also takes a new approach to value creation and re-designs the investment approach by focusing on initiatives like identifying top-quartile early-stage technology companies that have a high ranking and success score, evaluating a robust minimum viable product (MVP) with a superior innovation score, and, lastly, advising the entrepreneurs to be limitless in the pursuit of bold and transformative visions, while maintaining focus on achieving the operating goals. “As early stage investors, our focus is that our portfolio companies enter the early growth stage phase with strong operating and performance indicators, and are able to attract interest from reputable Series A investors, such as Sequoia, Anderson Horowitz, and Tiger Global, to name a few,” Danila says.
The fund’s data-driven strategy, which positions it at the intersection of fintech and venture capital and creates its scalable and differentiating value proposition, has led to 10 investments in the American fintech space to date. “We hope to be the first VC from the Middle East to bring to the regional stakeholders a few unicorns from Silicon Valley,” Danila says. Some of the firm’s notable investments include Transcrypts, a Harvard-founded blockchain for document identification technology, Blue Studios, a Web3 crypto digital wallet for families and kids, Nexus, a Y Combinator-backed robo-advisory technology company that improves checking account money productivity by enabling equity type returns with liquidity, and Envel, a Harvard-founded and Massachusetts Institute of Technology (MIT)-backed fintech startup that uses AI to assist with automated investment and saving recommendations.
“One of the most relevant proofs of concepts that data and AI could generate superior returns lies in our latest case study, where we invested in Seashell, a blockchain technology for financial services set to generate high yields in an inflationary environment and reimagine the flow of money,” Danila adds. “The founder, Daryl Hok, was previously the founding member of a $2 billion (equity value) blockchain security company Certik, and also a founding member of Fiscal Note, a $1.4 billion (equity value) analytics company. Global Millennial Capital co-invested in the round with the likes of Vlad Tenek, Mark Cuban, Khosla Ventures, and Avalanche, just to name a few.”
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Andreea Danila, founder and Board Member at Abu Dhabi based venture capital fund Global Millennial Capital. Source: Global Millennial Capital
Danila reveals here that Global Millennial Capital has been invited to join Harvard Business School’s Impact Finance Consortium, alongside Wharton Business School and Chicago Booth, and that it is also considered to be the first MENA venture capital investor to adopt the United Nations Sustainable Development Goals in its investment framework on themes like innovation, gender equality, and catalytic capital, among others. All of this is, according to Danila, a recognition of the fund’s investment philosophy and impact. “Global Millennial Capital endeavors to position itself as the ‘first to innovate’ in the venture capital segment,” she says. “We seek alpha strategies by investing in visionary ideas and founders from Silicon Valley, and over the last years, we have created a global network in collaboration with the world’s best academic institutes, bringing fresh new perspectives on traditional topics such as investing using data and AI.”
Although Danila aims to focus on her enterprise’s global expansion in the next three years, she highlights that, instead of rapidly scaling a business, key to success in her field will always be based on one’s commitment to constant learning. “I believe each leadership journey is very specific not only to market conditions, opportunities, and sector expertise, but also to our systems of values, principles, and beliefs,” she says. “We have seen a significant transformation in the financial services and fund management industries in recent years, with trends such as decentralized finance, crypto, and Web3 emerging and disrupting operating models, coupled with the mass access to financial education and financial inclusion that triggered a shifting power from the institutional investors to the consumers of financial services information and products. It is a very new environment, and we need to thrive to constantly adapt, upskill and eventually lead in these emerging spaces.”
Such a philosophy also points to how Danila has reached her goals in life so far. A native from Romania, Danila worked in London and Singapore before relocating to the Middle East in 2010 and joining an alternative asset management firm based in DIFC, which became an award winning buy-out private equity player managing $1.5 billion of assets under management in MENASEA with more than 55 investments. After gaining such insightful private equity experience first-hand, she worked for global consulting firm, Ernst and Young Corporate Finance, where her role focused on advising financial institutions and corporates around areas of mergers and acquisition, market entry strategies, joint ventures, and buy-outs and carve-outs with exposure to the consumer and technology sectors.”
In late 2020, at a point which she describes as “at the bottom of COVID-19 market,” she teamed up with a couple of institutional investors who felt that the timing to invest and acquire stakes in technology companies in the US was favorable. “I pitched the idea of creating a data-driven fund over a Zoom call, with the vision to create a new model of venture capital in the Middle East, and provide access to Silicon Valley’s most prominent early-stage technology companies,” Danila explains. “A large number of qualified investors backed my vision as a blank cheque new hedge fund manager, regulated offshore by the Financial Services Commission in the British Virgin Islands.”
Danila shares her view pertaining to the local developments in the region when it comes to entrepreneurship and venture capital and comments that “UAE is an attractive destination for global entrepreneurship, given its macroeconomic environment, government initiatives as well as the transition to a hybrid work model”. We are particularly interested in the developments around AI in the UAE, as well as the various initiatives around blockchain and metaverse sectors, which tend to assist the further positioning of the country as an emerging global innovation hub well-positioned to attract global talent, especially in the areas of engineering, coding, and computer science,” she says. “Lastly, we observe a growing trend when it comes to the emergence of public and private funds, with strategies and allocations for funds of funds, venture capital, and startups regionally and globally.” That would explain why Danila’s advice for entrepreneurs is to set up (and settle) in a place that offers access to smart funding, a friendly regulatory environment, and a cultural mindset focused on growth- again, she is talking about the UAE, and for all the right reasons.
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