Polish venture capital firm Inovo VC has just announced its third fund. With a target capitalization of €100 million, the firm will support early-stage funding for CEE-based tech companies.
The Central and Eastern Europe region has been making its presence felt in the startup community. Home to some of Europe’s most exciting startup hubs it’s proved fertile ground for nurturing successful innovation and European unicorns. Now, the region has another fund supporting early-stage funding.
Inovo VC – a Polish firm – has announced its third fund to back tech innovation in the region, looking for those entrepreneurs and teams with global potential.
“We are looking for companies conquering global markets that can grow to USD 100 million in revenue in just a few years. We have managed to become a fund of choice for Polish founders and we want to replicate that in the other CEE countries, as we already see we can be as helpful to those founders as we are to the ones from Poland” explained Michał Rokosz, Partner at Inovo VC.
The financials
With a target capitalization of €100 million, this is a fund that will leave its mark in the region. Already, over 50% of capital has been committed with private investors accounting for over half of its total AUM so far. There are additional institutional investors expected to commit by the end of the year.
The firm is set to invest in a total of 20-30 companies, with a single investment ticket running from €500 right up to €4 million. It’ll focus from pre-seed to Series B rounds – so there’s plenty of scope and variation coming from this fund.
“Over the last 7 years we’ve seen the region growing at an exceptional pace, which results in the rise of the number of funding rounds and in an even faster rise of startup valuations at every stage of their development. We are sure that the CEE region will raise at least ten new unicorns in the upcoming 5 years. With our new fund we want to help make that happen”. Tomasz Swieboda, partner at Inovo VC.
Nurturing up-and-coming innovation
This is Inovo’s third fund – the first Polish firm to reach this milestone. The aim is to identify and nurture outstanding founders of tech companies from the CEE region and boost international potential. About 60% of the capital will go to Polish tech startups and the remaining funds will go to companies from the rest of the region which includes Bulgaria, Croatia, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovenia, Slovakia, and the Czech Republic.
Inovo, which is led by Tomasz Swieboda, Michał Rokosz and Maciej Małysz has already set a strong track record with its two previous funds backing over 30 companies – of which, 6 already have a valuation of over €100 million.
The current portfolio of Inovo VC includes: AllSet –a pick-up or dine-in food marketplace operating in the US market, Archbee – a developers’ collaboration tool, Booksy – a SaaS-enabled marketplace for beauty services, Infermedica – an AI-powered technology for preliminary medical diagnosis and triage, Packhelp – a custom-made packaging producer, Preply – a global language learning marketplace, connecting tutors with students, Spacelift – a Terraform-compatible CI/CD platform for infra-as-code, Tidio – live chat, chatbot and mailing solutions for micro-businesses, and Zowie – a self-learning AI chatbot automating customer service for enterprise clients.
“Inovo was the first investor of Booksy and has been actively supporting us since then. Michał Rokosz even joined us as an interim COO for almost two years, helping the company grow its revenue sixfold and raise over USD 15 million from international venture capital firms. They have remained with us today and I still can call them for help even in the most extraordinary cases. Inovo is effectively a Swiss Army knife of VCs.” Stefan Batory, Co-Founder and CEO of Booksy.
Promoting Poland and CEE
Through its capital investments and the active support of founders and their teams in growing startups and paving the way for later-stage funding from international investors, Inovo VC plays a significant role in the development of the Polish startup ecosystem.
Polish VC investments grew 22.6x from 2018 to 2021, reaching a total value of €792 million last year. Further, the total value of VC investments in the first six months of 2022 in Poland reached €448 million – which is quite an impressive figure. We took a look at the promising Polish startups to watch this year back in February, and the country has certainly kept our attention as the year has gone on.
Inovo is committing itself to the wider CEE region as well – home to the always-exciting Baltic region as well as up-and-coming nations such as Romania, this fund is sure to have a prominent role to play in the years ahead.
“We see an increasing interest of international investors in companies founded in the CEE countries. Two third of our portfolio companies managed to raise follow-on rounds with top-tier international VCs. We want to strengthen the links between the CEE region and the global VC ecosystem even more. So far, we have co-invested with over 70 international funds and we are convinced this number will grow at a fast pace” said Maciej Małysz, Partner at Inovo VC.
We might be seeing some economic pessimism at the moment, but funds that support grassroots and early-stage innovation and entrepreneurship is one way that Europe’s wider business community can remain optimistic and keep striving for the future.
Interested in the CEE region? We have taken a look at several exciting startups from this part of Europe recently, including Romania, the Czech Republic (and Prague), Estonia and more.
