‘I don’t want to talk to any of you’: Addressing the VC Blindspot

Decades ago, an important venture-capital investor spoke to a room of Endeavor Entrepreneurs in California. Our earliest founders were building companies in Latin America, Eastern Europe, Southeast Asia and other regions around the world — the places we call Elsewhere. 

One entrepreneur asked the investor what his advice was to founders from “Elsewhere” markets hoping to raise capital from Silicon Valley. “I don’t want to talk to any of you,” the investor told them. “If you become important enough, you’ll eventually come to San Francisco.”

To a roomful of entrepreneurs invested in their home countries and the companies they were building there, it felt like a slap in the face. One of our founders, Marcos Galperin, was so upset that he left the room. Now, decades later, Marcos still lives in Argentina. His company, Mercado Libre, is still based in Latin America. It’s worth $130B.

Iconic companies from Elsewhere have proven that you don’t have to be based in Silicon Valley to achieve stratospheric levels of success. 

In 2003, 90% of global VC dollars were invested in the US. Twenty years later, 60% of VC dollars were deployed outside the US, spurred by dramatic growth in China, India, Latin America, and beyond. Endeavor Catalyst, our rules-based co-investment fund, puts our money where our mouth is and has proven the vast returns available to those investing Elsewhere: we’ve supported and invested in 64 emerging-market unicorns, making us the number one most prolific investor in $1B+ unicorn companies beyond the US, China, and India.

But those Elsewhere success stories — companies like Mercado Libre, Careem, and Paystack — were underestimated by investors in their early years. Underfunded, undernoticed, misunderstood, they reached their success despite, not because of, international investment. And investors following conventional VC wisdom — US-based pattern recognition, elite funder pedigrees, FOMO-driven rounds — are likely to miss out on the next round of success, too. Our current unicorns didn’t fit the mold; neither will the next ones. So what did you miss about the last big success stories? If we take a look, we’ll also see the key to catching the next one.

‘Not the right region’

Lots of VCs are interested in international companies — but not from there.

That’s the problem that Marcos and his co-founders saw when they launched Mercado Libre. Too many investors didn’t see Latin America as a functioning space for e-commerce, and they missed out on the company that launched a thriving start-up ecosystem. Now, investors are more likely to crowd around Latin American start-ups like Kavak, Creditas, and more. Lesson learned?

No, because VCs are still too wary of “unproven” regions. The next surprise startup success probably won’t be in a region with so many eyes on it; it will be somewhere else entirely — like Pakistan. Five-year-old e-commerce and fintech platform Bazaar Technologies is too often overlooked because conventional VC wisdom announces it’s “not the right time” for Pakistan. But despite economic turbulence, Bazaar has recently acquired digital payments platform Keenu and announced it expects to hit profitability in the coming quarters. It is currently Pakistan’s best-funded startup, with $100M under its belt, and it’s building the rails for B2B commerce and fintech in a brand new market.

You won’t find the next great region by obsessing over the last. Like Mercado Libre, great companies come from anywhere. Or is that Elsewhere?

“Where’s the hype?”

Like most industries, VC loves a flashy moment. Bending Spoons, an Italian app studio, did not fit that mold: with no media hype or name recognition outside of its home country, for too many investors it passed neatly under the radar. Then came a series of surprise acquisitions:

All of a sudden, the company no one had heard of owned all your favorite apps.

The obvious problem with waiting for hype is that by the time it rolls up to the station, you’ve already missed the train. Instead of sitting around sighing over the lost opportunities, smart investors need to keep an eye out for the signs of another Bending Spoons about to happen.

This time, we’re picking Codeway from Türkiye. Far from Silicon Valley, Codeway hasn’t raised any funding yet. They don’t need to: they’re already profitable, with a bootstrapped model that led to $100M+ in revenue. And they have three AI apps in the global top 50, according to VC giant Andreessen Horowitz (a16z). 

Don’t mistake flying under the radar for staying still. Codeway and companies like them are heading for new horizons.

‘AI is an American and Chinese game’

In 2024, 80% of venture capital investment dollars for AI went to the US and China. Standard VC thought heralds these regions as the engineers and homelands of AI, the places where everything began. 

Applications, not infrastructure, offer greater opportunities for high returns. And looking Elsewhere offers a plethora of options. One that some VCs missed is ElevenLabs: the Polish voice AI startup that got bored of bad dubbing across foreign films and created a $3.3B unicorn to solve it. Along the way, ElevenLabs have expanded into synthetic voices and text-to-speech generators, delivered speeches in the US Congress, and been adopted by over two million developers.

Other companies working in the AI application space away from Silicon Valley offer opportunities for VCs to get in while they’re still at the millions-rather-than-billions funding levels. Luzia, a Spanish-speaking AI assistant, has gained 65 million users in two years, making it one of the fastest growing startups in Europe and Latin America. 

On the other side of Europe, DRUID AI is building enterprise-grade conversational AI from Romania, powering voice and chat assistants for global banks and telcos. The company is finalizing a €46M ($52.7M) Series C round led by European VC Cipio Partners.

Despite their traction and successful funding rounds, both Luzia and DRUID AI are relatively under the radar, with low media coverage. That will change, as the story around AI itself shifts. The infrastructure layer is groundbreaking; but the application layer is where AI as we use it from day to day will live. 

And that home is likely to be Elsewhere.

VCs who rely on the same signals will only see part of the stories. It’s time to consider the specificities of local markets, not just their GDP, talk to founders who didn’t go to Stanford or raise from Sequoia, and be curious about companies building in places you’ve never been. When the next big thing from Elsewhere crosses your desk, you’ll be ready to recognize it.