Welcome to a new special episode of the EUVC podcast! In this episode, we’re joined by Apostolos Apostolakis, Founding Partner at VentureFriends and one of the early backers of Blueground, a European unicorn in the prop-tech space. Blueground, founded in 2015, operates as a full-stack provider of fully furnished apartments for medium-and long term stays, available in over 30 cities worldwide, including New York, London, Paris, Dubai and Tokyo. Apostolos shares the journey from VentureFriends' initial investment to Blueground’s growth as a global leader, raising multiple rounds and overcoming challenges.
Apostolos co-founded VentureFriends, a €170M fund currently deploying from its third fund and planning a fourth. Focused on pre-seed and seed investments, VentureFriends operates across Europe, the UK, and the Middle East, backing startups in B2B and B2C software, fintech, and marketplaces. Notable investments include Blueground, Huspy, Instashop, Carmoola, Plum, Flexcar, Embat and Harborlab.
Together, we explore how Apostolos and VentureFriends supported Blueground's expansion from Greece to international markets like Dubai and the U.S., the lessons learned from navigating crises like COVID, and the importance of founder conviction and operational efficiency in scaling a business. Expect insights into prop-tech innovation, venture dynamics, and the art of balancing growth and profitability, along with candid reflections on the human side of venture investing.
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✍️ Show notes
Part 1: The Inception Story
How Apostolos met with Blueground founders
We met through an introduction from a common acquaintance. After that introduction and reviewing a pitch deck, I visited Alex at the Blueground office, which at the time was on the ground floor of a residential building in a suburb in the North of Athens. I remember the office was near an old swimming pool, so the setting of that first meeting was kind of surreal.
We hit it off right away, and I knew that I really wanted us to become VentureFriends😊
2 things became apparent to me fairly soon
The idea of providing an easy and consistent experience for booking a beautifully furnished apartment for a medium-term stay made sense and appealed to a large market.
Alex was clear, thoughtful, and an outlier individual with very strong capabilities and a mission to build an impactful company.
First impression after hearing the pitch
It was a straightforward pitch, and the discussion that ensued provided no red flags. There were question marks, such as a lack of strong tech team, international expansion, scalability, and the fact that Alex was the main founder; however, the idea, founder caliber, and market size boxes were so clearly ticked that there was little room for doubts.
The pitch was clear and well articulated, and additionally, there were already data points to back it up. Blueground was already managing around 100 properties with positive unit economics in Greece.
Alex had lived with the problem himself and shown commitment to launching the business while working full-time. As a McKinsey consultant as well as with Samsung, he was spending months abroad and he had to stay at hotels. He would have preferred the comfort and homelike experience of an apartment.
Conviction-building
The communication was easy and clear, and it was evident we shared the same values (meritocracy, fairness: he has treated his early colleagues/cofounders fairly with a relatively large equity %, transparency, openness), and a huge ambition.
I could feel Alex was committed to pursuing his dream irrespective of whether he was raising VC money. After all,he had started Blueground while working at Samsung and invested his personal savings.
Behind-the-scenes anecdotes
I remember I felt it was too good to be true. It is not often you have the feeling there is a very clear product/market/founder/investor fit.
I could feel Alex was a mission-driven founder with strong values and committed to building a consequential company.
Part 2: The Development Until Today
Biggest milestones
Challenges in the next funding rounds
2016 VF led the Seed round to launch in Istanbul and Dubai. (The successful launches solidified my belief)
2017 Early Series A round: BG, we went out to raise a 5mil Series A round in 2017 to launch more cities: that proved difficult, so VF led the Series A and invested 4mil (20% of our first 20mil fund) in Blueground!
2018 Series A: We go to the US, launching NYC and SF, and aim to raise a 15mil round. That doesn’t happen, so VF leads again from our second fund and invests a 6mil ticket in a 12mil round (crossover from a 50mil fund!)
Sep 2019, eventually, we raise a 50mil Series B with Westcap and Prime Ventures
COVID happened, and in 2020, there was a play round with preference where we participated and also brought on our LPs to support. This way we end up investing 10mil out of our 50mil second fund!
As a summary, we have invested 20% of 2 funds in Blueground.
Takeaways
Aligned Values and open communication are important to build trust and keep team and investors close.
Alex was open and made sure that good as well as bad news were shared.
The transparency and alignment in values are motivating for employees as well as investors, who feel an increased responsibility to support.
Mission-driven founder
Alex always had very high standards for himself and the business and would go through walls to create a huge, impactful company.
Early on, focus on the basics: profitability and unit economics
BG was growing more efficiently than all global competitors.
Eventually, truth comes out: better-funded competitors not focusing on solid foundations go down.
Alex had a cost conscious and an “always be automating” mindset since the beginning, and that is why we won against Sonder, Zeus Living, Lyric, and Alfred that had more backing but failed.
A crisis reveals leaders
Corona crisis took BG in survival mode, and Alex delivered. He worked relentlessly, had to do layoffs and push out obligations, and did what he had to do in a fair but reasonable way to ensure that BG would survive.
Investor conviction (VF invested 20% of 2 funds)
In some cases, funding availability can be make or break, especially when you are trying to remain relevant as a global player.
It was 2 key times when we decided to step up and support Blueground by leading their Series A round and pre-Series B round with 2 different funds. That meant we undertook a significant risk because it was worth it.
Additional takeaway: US investors are initially sceptical to international founders moving to the US as an expansion market. They'd rather fund less efficient local startups.
Even great founders can lose sight
It happened twice. Once, when we raised Series B, we got carried away and started growing less optimally.
We then optimised during Corona, but then again, with post-Corona Euphoria, higher margins made all asset underwriting work and our cost structure appear healthy. We became a bit more complacent.
The last crisis, 2023-2024, is really what made the company the legendary company it is. We looked hard internally and optimised to build a sustainable, profitable business under any market conditions.
Challenges and obstacles
In startups you never know what will happen
Corona crisis.
High interest rates, an adverse funding environment, and mild recession all brought less demand, lower margins, and an inability to tap into new capital. There was no growth funding available for 3 years, 2022-2024, so we had to become profitable.
Lessons learned
Even the strongest people need support both in bad but also in good times (to not get carried away by their success).
Beyond a certain revenue level/stage (after Series B) a company should be able to get to profitability with limited capital.
Anecdotes or insider stories
Series A round discussion with a VC that took much time and effort only to provide a lowball investment offer. That was the time we decided to step up and support by leading the Series A round back in 2018. I felt the pain of a founder fundraising as I participated in those discussions.
Expansion telling of ambition. Another compelling story I have is that when we were discussing our next city expansion, I suggested London and a European geographical expansion path. That was when Alex said that actually what he would have preferred is go directly to the US and win that market first. He added, “The reason being that if we delay going to the US, the US players will be undisputed leaders. We can always come back to Europe once we win the US.”This was an accurate assessment but, at the same time, an audacious suggestion. US expansion is more costly and carries more risk, given the higher capital requirement.
Part 3: Looking Forward
Looking ahead
Alex and the Blueground team had matured a lot, coping with so many ups and downs and the demanding business environment of the last 2 years.
Now, after tremendous work, we are looking at a high-performance organization in a huge market. 2025 will clearly be a profitable year we are more confident than ever that Blueground will be a category-defining company.
We have launched two new scalable and efficient business models that are growing fast: partner network and franchising (Japan, Cairo, Riad, and eight more coming).
By 2027, we expect to be doing more than 1.1B of revenues with 150M of profits.
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🗓️ The VC Conferences You Can’t Miss
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GoWest | 📆 28 - 30 January 2025 | 🇸🇪 Gothenburg, Sweden
Investors Summit Bilbao 2025 | 📆 11 - 12 February 2025 | 🇪🇸 Bilbao, Spain
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0100 Europe 2025 | 📆 02 - 04 April 2025 | 🇳🇱 Amsterdam, The Netherlands
0100 Emerging Europe 2025 | 📆 14-16 May 2025 | 🇭🇺 Budapest, Hungary
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