How one venture firm invests in an increasingly fragmented world

Today’s world is riven by cultural differences, political divisions, and geopolitical strife, making it a challenging environment for investors looking for startups that can grow large enough to deliver venture-scale returns.

Operating from offices in Amsterdam, Copenhagen, Berlin and Tel Aviv, Kompas VC has developed regionally sensitive strategies to help navigate and invest in this fragmented world. And it’s investing new capital in this approach through a new 160 million euro ($187.5 million) fund, the company told TechCrunch.

“We’re seeing the world really split into three main areas of economic activity, political activity: the United States, Europe and China,” Sebastian Peck, partner at Kompas VC, told TechCrunch. “Today we see clearly that these three areas follow very different trajectories.”

Kompas has built its reputation on supporting startups that solve key industry competitiveness challenges, from manufacturing and supply chain to critical infrastructure and sustainability. These themes have not disappeared, but the degree to which they are emphasized varies depending on the region.

“There’s a lot of enthusiasm around these topics in 2021,” Peck said of the year Kompas was founded. “In 2026, we’re in a very different paradigm. It’s all about AI and it’s all about rapid growth, very explosive growth. There are a lot of big topics that we’re partially addressing but aren’t really part of what we stand for.”

“Our focus is on the physical world – everything that has to do with the production of physical goods,” he added. Kompas said it is focused on startups working on decarbonization, productivity and risk management. “We found our niche.”

It turns out that the niche is quite wide. Reshoring is popular In almost all markets, depending on the startup, these markets usually have enough scale for a company like Kompas.

Although smaller than some venture funds these days, Kompas’ newly raised second fund will provide ample opportunity to lead early-stage rounds with checks of between €3 million and €5 million.

As a European fund, Kompas has access to a wide range of founders and startups in the region. However, we need to assess how global fragmentation may limit the potential for some companies to generate venture returns. Peck cited manufactured homes as an example. This approach is widely used in Scandinavian countries, but is less common in Germany or the rest of Europe, let alone the United States.

“It feels like a really intuitive solution. It’s really an industrial product. It has to be highly scalable,” he said. Ultimately, the reason this doesn’t resonate outside Scandinavia has more to do with “cultural conditioning” than the technology itself, he said. “If the U.S. is not a viable market for your industry, you have to look very carefully to see if there is a large enough market.”

Fragmentation extends beyond housing. In Europe, for example, sustainability remains widely attractive. In the US, the theme is not as popular as it was a few years ago.

Still, a lot can change quickly, Peck acknowledges. “We’re investing in a 10-year, 15-year or longer time horizon. That’s a few years of legislation to build bridges, and sometimes things swing in unexpected directions.”

The changing environment is a challenge, but it is also an opportunity for small investors like Kompas. “I think there’s a good space for a very focused, highly specialized, small fund like us to be the first to check in and attract certain themes and certain founders,” Peck said.