How one venture firm is investing in an increasingly fragmented world

In today's world, marked by cultural disparities, political unrest, and geopolitical tension, investors face a daunting challenge in identifying startups capable of achieving significant growth. Kompas VC has crafted a strategy that is sensitive to regional nuances, allowing them to effectively invest in this complex landscape. Recently, the firm announced the launch of a new fund, totaling €160 million ($187.5 million), aimed at supporting their tailored approach. Sebastian Peck, a partner at Kompas VC, shared insights into their investment philosophy. "We perceive the global economy as divided into three primary spheres: the U.S., Europe, and China," he explained. "Currently, these regions are on distinctly different paths." Kompas VC has built its reputation on investing in startups that address fundamental industrial challenges, including manufacturing efficiency, supply chain management, critical infrastructure, and sustainability. While these themes remain relevant, their prominence varies across different regions. "Back in 2021, there was significant excitement surrounding these issues," Peck noted. "Fast forward to 2026, and the narrative has shifted to focus on AI and explosive growth. Although we engage with some of these topics, they are not our core identity." The firm’s primary emphasis lies in the production of tangible goods. Peck indicated that Kompas is dedicated to supporting startups engaged in decarbonization, productivity enhancements, and risk management. "We’ve established our niche, which surprisingly encompasses a wide range of opportunities." Reshoring is currently a popular trend across multiple markets, and depending on the startup's focus, there is often ample scale for Kompas to explore. Although it may be smaller compared to other venture funds, Kompas's newly established second fund positions it well to lead early-stage funding rounds, providing investments between €3 million and €5 million. As a European venture fund, Kompas has access to a diverse pool of founders and startups. However, the firm must consider how global fragmentation could impact the potential returns of certain investments. For instance, Peck cited prefab housing, which has gained traction in Scandinavian countries, but is less prevalent in Germany or the broader European market, let alone the U.S. "This approach seems like a straightforward solution, as it is fundamentally an industrial product with scalability potential," he remarked. The disparity in adoption across regions often stems from cultural factors rather than technological limitations. "In industries like this, if the U.S. market is not viable, it’s essential to carefully assess whether there is a sufficiently large addressable market elsewhere." The theme of sustainability continues to resonate well in Europe, unlike in the U.S., where its appeal has waned over the past few years. Nevertheless, Peck recognizes that the investment landscape can change rapidly. "We invest with a long-term perspective, often spanning 10 to 15 years. This timeframe encompasses several legislative cycles, and it’s not uncommon for trends to shift unexpectedly." While the evolving environment presents challenges, it also creates opportunities for niche investors like Kompas. "There is ample space for specialized, focused smaller funds like ours to be the pioneering investors and cultivate specific themes and founders," Peck concluded.