Startup Poland is proud to present the first comprehensive overview of the Polish venture capital market.
The venture capital market in Poland has been developing steadily since the early 2000s, but there have been no regular reports of its performance to date. The range of statistics available from Crunchbase, Dealroom, Eurostat or Invest Europe, vary from unjustly understated to hyper-optimistic.
Startup Poland, Poland's largest independent technology think-tank, surveyed 130 venture capital firms active in Poland. 70 firms responded to the survey, reporting the data on their assets under management, exits, return multiples, and overall investment activity.
VC FIRMS INVESTING IN POLAND
EXPERT COMMENTARIES, FROM GOOGLE, 3TS PARTNERS, SPEED INVEST, OPEN OCEAN AND OTHERS
DETAILED PROFILES OF
2019 KEY FINDINGS
1. Polish VC firms have done their homework
For the first time in Poland we are able to find management teams who are raising their second or third funds - now with no state capital involved. EIF is already present in two Polish VC firms, and three Polish high net-worth individuals have set up their own VC funds. At the same time, over half of all VC firms are first timers - most often supported with the government programs.
2. Foreign VC firms have started co-investing in Poland
The top 10 largest rounds of 2018 have been done with well-known VCs from outside Poland, like Naspers, Target Global, General Catalyst, Enern, OpenOcean, Piton Capital or 3TS.
3. The market gap starts at tickets of €0.5M
Polish startups are hungry for growth capital. Only three firms with a track record of at least 5 portfolio companies have been able to invest above €1M: MCI (a private equity firm), TDJ Pitango Ventures (a family office-led), and mAccelerator (a corporate VC).
4. The 2017 slowdown was temporary
While globally 2017 was a year of new records in VC, for Poland it meant a shocking 30% decrease in venture capital investments, the reason being a break in the availability of state funding for VC. Some experts concluded that the market is not yet ready to pull out the lifeline of government capital. But 2018 has shown that the market was able to bounce back and surpass the figures of 2016.
The total amount of capital invested by all of the VC firms active in Poland
5. Public money accounts for over half of the venture capital available
Public contributions to VC funds are made through multiple programs run by four different state agencies. A wide palette of support instruments is available to angels, angel networks, corporate funds and typical VC investors, both Polish and foreign. From equity-free grants, to common LP mechanisms, these programs, however, might put obligations or restrictions on the beneficiaries regarding how they can invest.
6. Nano-VCs dominate the market
If a micro-VC is a fund with less than €100M under management, then only one Polish firm, MCI, runs a non-micro fund. Nano-VCs, with less than €10M under management, typically raised from state agencies as majority stakeholders, account for over a half of all the funds.
7. First-time VCs rely on the state funding programs
44% of VC firms active or about to start investing in 2019 are first-timers. Typically, their decision to launch a VC fund has been motivated by the programs of private-public partnerships for venture capital.
8. Pre-product and pre-revenue startups in local portfolios
Since 2016, 2 in every 3 venture rounds on the Polish market have been at the pre-seed or seed stage, into startups with no product or zero revenue. Given very few funds can provide capital beyond seed, this means all these newly-bred companies might have considerable trouble finding follow-on investors.
9. The portfolios are growing
On average, a Polish VC firm has a track record of 19 companies invested. Half of the VC firms have invested in fewer than 10 companies, but the largest portfolio, 111 startups, belongs to AIP Seed, which on average has been investing €36K per startup.
Top 5 VC firms in Poland by portfolio size
10. Family office funds invest with higher tickets
While public support programs incentivize seed and pre-seed stage investments, the new family office-led VC funds have a very different strategy. They almost never do tickets under €1M and co-invest with the international VC community.
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