In 2023, 72% of the transactions in Poland were financed by VCs with Polish public LPs (PFR Ventures, NCBR Bridge Alfa, and BGK). It shows how important public funds still are for the Polish startup ecosystem.

General data of Polish VC market in Q1 2024:

• 30 Polish startups received funding;
• €43 million is the value of investments;
• 35 funds were involved;
• over 80% of transactions remained seed rounds, with 5 investments recorded at the A and B rounds;
• the median transaction size rose from PLN 1 million to PLN 3 million;
• 36% of the capital was provided by international funds.

The Polish startup ecosystem in Q1 2024 decreased by 76% YoY in the number of transactions
decreased by 55% YoY in capital invested (for comparison, global VC activity in value has decreased by 5% YoY according to Dealroom).

Activity of Polish funds:

In the first quarter of 2024, Polish VC funds made 10 investments in foreign startups, totaling €16 million. In recent years, the professionalization of Polish investors was observed, enabling access to a global network of contacts and participation in attractive financing rounds for foreign companies.

Two of the most significant transactions included the Saleor Commerce (PLN 32 million) and Vasa Therapeutics (PLN 24 million) rounds, both of which were seed rounds and attracted foreign investment. Furthermore, an additional five companies secured funding ranging from PLN 10 million to PLN 20 million.

Public funding in Poland:

By the end of 2023, the number of active Polish VC funds had decreased by over 80% from its peak in 2022, and most teams/GPs won’t be able to raise a new fund without the support of Polish public LPs.

Additionally, there was a decrease in the share of transactions involving solely Polish teams and an increase in the share of foreign capital, with co-investments rising from 21% to 26%. The substantial (> €60 million) private funds raised recently (OTB, Inovo, bValue) have already started to have an impact on Polish ecosystem.

I anticipate this trend to persist, with Polish teams able to offer larger investment tickets and the launch of new funds under the FENG programme. Over the long term, this is expected to systematically increase the proportion of transactions in which Polish funds play at least a partial role,

Radosław Kuchar, Investment Manager at PFR Ventures, predicts.

In the second quarter of 2024, a little over €209 million (PLN 896 million) flowed through the Polish VC market. This is the total value of capital that Polish and foreign funds invested in 38 transactions in domestic innovative enterprises.

Thus, in the first half of this year, the value of VC investments in Poland amounted to nearly €250 million PLN 1.07 billion, adding onto the results of Q1 2024.

General numbers

• 38 companies secured financing.
• €209 million was invested.
• 47 funds participated in various investment rounds.
• 12 Series A+ provided 80% of the total investment value.
• ICEYE’s $93 million growth round is the biggest transaction in the Polish market in 2024 yet.
• Kontakt.io $48 million had the second biggest transaction and Smart Lunch $15 million — the third.

12 out of 38 transactions are investments with the participation of PFR Ventures funds. They provided 16% of capital for innovative enterprises. Most of the transactions were carried out with the significant participation of private Polish funds and business angels. 46% of the capital was provided by international funds.

The state of the Polish market

According to the report, Q2 of 2024 has showcased a significant decline in the number of companies that obtained financing. This trend has been continuing since the first quarter and is related to the end of the investment period of EU funds from the Smart Growth Operational Program.

“The increase in the number of A+ rounds translated into a much better result of the Polish VC market in the second quarter compared to the beginning of the year. However, it is worth noting that the number of transactions itself remains relatively low. This means that the market for financing early-stage companies has temporarily slowed down. We are working on implementing measures from FENG that will significantly improve this situation,”

Aleksander Mokrzycki, vice-president of PFR Ventures, commented.

By the end of June 2024, only 51 seed rounds and 18 Series A+ transactions were recorded.

About the program:

Huge Thing is part of the SpeedUp Venture Capital Group, a group of venture capital funds in Poland. As a group, it invests in enterprises at the early stages of development.

Now, the Huge Thing team has prepared three specialized tracks for the Startup Booster program, according to the different stages of startup development and the so-called TRL, or Technology Readiness Levels:

While preparing the Huge Thing Startup Booster program, we decided to divide it into three tracks, perfectly tailored to startups at different stages of development. This way, the invited mentors, partners, and the prepared content will perfectly address their current situations and needs,

Maria Tyka-Majewska, Senior Program Manager at Huge Thing, commented.

Industry Test (corporate) (TRL 6-9):

The corporate track designed for startups with an already functioning product or service. Participants will receive grants of up to €80,000 and have the opportunity to collaborate with project partners, including Veolia, the City of Zduńska Wola, Saint Gobain, PKO Bank Polski, Rossmann, PZU, Alior Bank, Żabka, and Legimi. The goal of this track is to provide startups with the opportunity to test their solutions in a real business environment.

Go Global (TRL 8-9):

This track is designed for startups that have reached a higher level of technology readiness and have completed their initial market implementations. The program offers grants of up to €80,000 and focuses on supporting companies in their international expansion, particularly in Asian, American, and German markets. Participants will receive assistance with market entry strategies, establishing business contacts, and adapting their products and services to the specifics of local markets.

Sector Agnostic (TRL 5):

This track focuses on startups at an earlier stage of development, specifically at TRL 5. The program is designed to support the refinement of their product or service and prepare them for market entry. Participants can receive grants of up to €40,000 and will have the opportunity to collaborate with mentors and Huge Thing partners. Additionally, the initiative facilitates the establishment long-term partnerships.

Recruitment for Startup Booster program has already started and will be open until July 28th, here.

• Founded in 2023, Radix is a new Poland’s VC fund with three general partners — Paweł Bochniarz, Wojciech Ratymirski and Michał Urbanowski. The firm has already engaged several tech investors in Romania, Hungary, and Ukraine as venture partners, responsible for operations in the key local CEE hubs.
• Radix’s portfolio consists of startups, including Booksy, ML System, Tresoit, Bitrise, Lerta.energy, and Noctiluca. The founders of VC have a collective 45 years of experience in technology ventures. To date, they have overseen 8 exits and made 38 investments.

The details:

The fund is supported by the European Investment Fund (EIF), a member of the European Investment Bank Group that aims to help Europe’s SMEs access financing, and PFR Ventures GreenHub, a fund of funds that invests in venture capital and private equity funds around Europe, as well as various angel investors.

This milestone marks a journey that began over four years ago, with the vision of a CEE-focused deep tech fund. Our goal is to raise at least €60 million to support 16-20 startups from all corners of CEE, investing at the late seed stage with tickets of app. €1-2 million.

Pawel Bochniarz, General Partner at Redix Ventures, commented.

Radix Ventures plans to guides 50% of the fund for follow-on investments in portfolio companies, focusing on energy, manufacturing, transport and mobility, and dual-use technologies with a positive environmental impact.

About KAYA VC

• KAYA VC manages over $300 million in assets across 4 funds. KAYA co-invests and partners with funds like the British-American Index Ventures, European Creandum, EQT, and US-European Goldman Sachs. Their advisory network includes founders like Tomáš Čupr of Rohlík, as well as Juraj Masár and Veronika Koleják of Better Stack.

• Since the launch, it has more than forty companies in its portfolio, with the value of their shares reaching €300 million. KAYA’s portfolio includes two unicorns: the Czech online grocer, Rohlík, and the Polish Docplanner, a global platform managing healthcare practices and scheduling.

We support big dreams and ambitious plans. We help create the best conditions possible for our entrepreneurs, enabling them to overcome challenges more easily. We connect them with other successful entrepreneurs for advice and back their belief that the Central European Region is a fertile ground for building global companies that can win in their respective markets,

Tomáš Obrtáč, one of four equal partners in the fund, says.

More on the Fifth Fund launch

Now, the firm is preparing to launch its fifth private investment fund, which will have 80 million at its disposal.

KAYA expects their investor composition for their fifth fund to be similar to the previous one, where the majority of finances came from institutional investors and about three-quarters of the capital originated from the private sector. The minimum investment in KAYA is expected to be €1 million.

The fund also added that it does not specialize in a specific segment, category, or mission of startups. But KAYA aims to invest primarily in Czech, Slovak, and Polish companies.

In the Startup of the Day column, Piotr Sikorski, co-founder of SP Tech Solutions, shares the details about the startup’s idea, its product, and future plans.

The Startup of the Day column on AIN.Capital is dedicated to tech projects from all sectors that originate from the CEE countries. If you would like to introduce your project, please fill in the questionnaire.

Tell us about your startup. How does it work?

Our goal is to transform the operations of rail freight companies by providing solutions to all their challenges, including limited resources, inefficient processes, outdated tools, lack of adequate financial planning, and rising costs.

The three tools that make up the RAILY ecosystem address most of these companies’ issues. Together, they offer a transformative solution, individually or as a comprehensive package:

• RAILY Taxi automates and optimizes staff transport. This may seem odd for those unfamiliar with the railway sector’s inner workings, but employee transport is a major sector’s pain point that generates enormous costs. Train drivers and other crew members have to commute hundreds of kilometres to and from their job location, and for safety reasons, they require drivers. Rail traffic dispatchers spend loads of time finding the service to transport the employees.
• RAILY Cargo, a TMS/ERP tool that integrates all logistic planning, rolling stock management, trade, and HR processes into a single system, effectively streamlining operations. Many freight rail transport companies have expressed the need for such a solution because the available tools are often outdated, slow, and inefficient. Younger employees, in particular, have higher expectations and frequently complain about the sluggish processes of existing systems. They want solutions that can transform and modernize railway operations.
• RAILY Marketplace, a platform that connects service providers with rail companies for all their needs, from technical maintenance to crew hiring. For example, the previously manual process of hiring a locomotive driver is now fully digitized, allowing companies to work with unlimited service providers and maintain transparency around costs.

How did you come up with the startup’s idea? What was the reason/motivation behind it?

My co-founder, Michał, has a strong connection to the railway industry, stemming from his family’s deep-rooted traditions. His father, uncle, and grandfather all worked in the railway sector, which nurtured his passion for the field and equipped him with invaluable insider knowledge.

We first met during our studies in 2010. Eight years later, we collaborated on a project to develop a railway simulator for training train drivers.

A few years later, we teamed up again to launch SP Tech Solutions, starting with our first product, the RAILY Taxi tool. That was the beginning of our journey, and everything took off from there.

How long did it take to reach the prototype or MVP? What did you encounter?

It took us 1 year to develop the first version of our prototype or MVP, which we then delivered to our client and continued to refine. Our company was founded a few months before the pandemic, significantly impacting our product development. However, the biggest challenge we faced was our perfectionism. We kept postponing the implementation because we wanted everything to be perfect.

The COVID-19 pandemic and financial constraints eventually forced us to launch the product, even though it wasn’t perfect. In the end, we learned that done is better than perfect. It was a precious lesson to us, but perfectionism still occasionally creeps in.

When exactly did you launch your product? Or when the launch is planned?

At the end of 2021 we launched the first commercial version of RAILY Taxi.

Tell us about the startup’s business model. How do you monetize your product?

All our products are designed as SaaS solutions, ensuring scalability and robust performance within the Google Cloud environment. Depending on the product and features, we offer various pricing models, including commission-based and fixed-fee structures.

What are your target markets and consumers?

We target rail freight companies and their service suppliers operating in international markets. Our cutting-edge and comprehensive solutions offer unmatched value to the railway industry. The RAILY suite improves management and processes and increases control of virtually every aspect of rail freight companies’ functioning, resulting in cost reductions, savings, and, ultimately, higher net revenue.

When it comes to freight railway staff transportation, we’ve already secured a significant market share, nearing 30 (Polish). Our goal is to reach 50-60% before we hit the ceiling. We’ve been fortunate to collaborate with major companies such as PKP Cargo, Lotos Kolej, Olavion, Freightliner (part of Genesee and Wyoming Inc.), and Rail Polska (part of Rail World), which speaks to their trust and confidence in our solutions.

Our current focus is on two key priorities: product development and international expansion. With the recently raised funding, we can support our expansion efforts in the German market. We see immense potential in the German market for adopting our tools, particularly the RAILY Marketplace. This platform is designed to streamline searching and ordering various rail services, such as train technical inspection or hiring a locomotive driver. It allows companies to quickly find exemplary service and compare prices from trusted partners, making operations more efficient. This game-changer replaces the need for phone calls and other manual, time-consuming tasks with a single tool that provides all the necessary data and functionalities,

It’s worth noting that in Germany, about 50% of railway employees work on an outsourcing basis, representing a significant market opportunity for RAILY Marketplace.

If the startup has already launched the product, what are the results: metrics, income, or any clear indicators that can be evaluated.

Companies such as PKP Cargo, Lotos Kolej, and Laude Smart Intermodal already use our solutions. It is worth mentioning that our clients have around 50% rail freight market share. The real market need for our solutions is evidenced by the 1000% increase in our Group’s revenue over the past two years, reaching nearly 41 million PLN in 2023.

What about your team? How many people are working in the startup? If you’re looking for new employees, indicate whom exactly.

By the end of 2023, our team consisted of about 60 people. Today, we have expanded to almost 90 team members and plan to hire an additional 10 employees by the end of this year. Our primary focus is recruiting specialists in sales and IT, as these roles are crucial for achieving our scaling and expansion goals.

In addition, through our RAILY Taxi tool, we collaborate with over 1100 drivers. These drivers cover millions of kilometres each month, providing exceptional service to our clients.

Have you already raised any investments? Provide us with more details on each funding round: the amount, investors, the purpose of the investment.

Since launching, we have raised 19 million PLN. Initially, we secured 7 million PLN from the SpeedUp Bridge Alfa fund, Pomerangels, business angels, and individual investors.

More recently, we obtained an additional 12 million PLN from the Vinci HiTech fund, managed by Vinci S.A. product development, sales, expansion in international market.

What’s next? Tell us about your future plans.

We are focused on boosting sales and strengthening our position in Poland while expanding internationally. As mentioned, our strategic target for this year is the German market, and we plan to concentrate primarily on this region.

Looking ahead, we are also considering expanding into the entire DACH region, the Czech Republic, France, and Italy. Additionally, countries like Brazil, Mexico, and India are within our scope of ambitions. Our preliminary analyses confirm that all these locations are in demand for the tools our RAILY ecosystem offers.

How is your visit in Ukraine, in Kyiv?

First of all, I really like Kyiv. This is not my first visit here. I really like the fast roads, very good conditions. And, in fact, everything is very well attended from the security and safety point of view.

Very glad to hear that. Can you share some developments or agreements between our governments that you are working on during this visit?

We talked about several directions of cooperation, in particular, assistance in providing Ukraine with the Internet, in particular, the Starlink systems, which is very important for the security of Ukraine and which is a priority aspect of Polish assistance.

We also talked a lot about the Tallinn Mechanism [ed. A new format of assistance to Ukraine in the field of cyber security] and about the principles of cooperation in order to develop the back-office within the framework of this mechanism. We talked a lot about how to ensure long-term cyber security mechanisms.

We also talked about the role of the Republic of Poland during its presidency in the European Union in 2025 and about the support Ukraine during this period.

In addition, we talked about the fact that Poland is currently in 3-4th place globally in terms of support for Ukraine from all countries of the world. For Poland, this means 2.5% of annual GDP. Also, some databases and servers of Ukrainian enterprises are now localized in Poland and we declared our readiness to guarantee the security of this data in the future.

I also invited Deputy Prime Minister Fedorov for a return visit to Poland, where I hope he will present the successes we talked about today.

We have a lot to discuss, so let’s start with digital government services Diia and mObywatel. We know that mObywatel 2.0 was released in July 2023, which equated the Polish Digital ID to plastic cards. Almost a year has passed since then. How is the implementation process going and can you share the results?

This process gives a sense of increased possibilities and opportunities to use digital reality to Polish citizens. We can say that mObywatel is the most popular application in Europe today. In the European Union.

We have a rather similar situation with the Ukrainian Diia.

Actually, Diia is the most popular in Europe, but not in the European Union.

Immediately after the Russian attack on Ukraine, some Ukrainian documents appeared in the mObywatel system. Are there any plans at all to further integrate these two applications so that more documents and services have this kind of cross-interaction?

Actually, we also talked about this with the Deputy Prime Minister. Now, with the help of mObywatel, Ukrainian citizens have the opportunity to legally confirm their identity and the legitimacy of their stay in Poland. We want to expand these possibilities in the future.

Every year more and more services are added to these platforms. Could it be that the Ukrainian Diia somehow influenced the development of mObywatel itself? Maybe some functionalities inspired something during the development process?

I would say that it was mObywatel that influenced the development of Diia a few years ago. And now Diia has a greater influence on mObywatel regarding the development of the application. Therefore, it can be said that this is such a brotherhood and sisterhood, like a brother and sister who go to Europe together.

Now back to the topic we discussed earlier. We know that Poland is one of the largest donors of the Starlink systems to Ukraine. In December 2023, this figure reached about 20,000 Starlinks. Can you update us on the current numbers?

Poland provided more than 20,000 of the Starlinks systems to Ukraine. Starlinks ensure the operation of broadband Internet, which is very important for the security of Ukraine, for the interaction between citizens and the authorities. The Internet apparatus is very important because it also provides communication for the military, for hospitals and important infrastructure facilities.

Therefore, to the question of the Deputy Prime Minister, I assured that Poland is ready to continue financing Starlinks.

Very glad to hear that. There are talks that Poland may also start financing of the Starlink subscription service. Are there any official plans or news on this at all?

Does Poland plan to finance the Starlinks it has already acquired? Of course. Poland has been doing this for a long time.

Sure, then another question. How does this mechanism work now?

We just pay for these Starlinks monthly and quarterly. That is, I personally periodically sign this money transfers.

Now to the topic of war. Ukrainian energy, infrastructure and communications, as well as virtual services, very often become victims of russian cyber attacks. Is Poland also experiencing such cyber attacks?

Actually, the threats from russia, if we talk about cyberspace, are the same for both Ukraine and Poland. Every day we see cyber attacks and other cyber threats from russia. The russians are particularly keen on using Malware and Ransomware.

Therefore, it is a priority for us to close these holes in the protection. To do this, we increase our spending on cyber security every year. And now we are working on changes in legislation that will protect more and more sectors of our everyday life with such a cyber shield.

How do Poland and Ukraine generally cooperate in the field of cyber security? Can you share this with us?

We work very closely together and we work very secretly.

But there are things I can talk about openly. For example, from September to December 2023, russian special services started using such programs, called SVR, which could make changes in programming. And the Polish services, together with the American and British services, blocked the access of the russian special services to our servers, which could also be dangerous for Ukraine.

It has already been mentioned that Ukraine has registers in Poland. Is it even possible to transfer or backup these registers on the territory of Poland in general, in order to avoid their physical or virtual destruction?

I think that this is a question for the Ukrainian side, not mine.

Of course. We will try talks to the Ukrainian government regarding this issue. But is Poland open to this at all?

Poland is open to very broad cooperation in the digital field. This is what the memorandum signed today should serve to cooperate in the framework of it on digital protection, data protection, data storage, access and operation of the Internet. We are open to everything, but the decision will be made by the Ukrainian side

And can I ask a little about the details of this newly signed memorandum? What does it cover?

We agreed with Mr. Prime Minister Fedorov that he will talk about the details of the memorandum signed today. Therefore, I will allow myself not to answer this question, because I will talk about these details in Poland. This way, everyone will do their job.

And now to the last question for today. We know that many Ukrainian startups and IT specialists moved to Poland after the war. How has this affected the Polish IT ecosystem, and in short, how is it doing now?

Actually, the IT ecosystem in Poland is developing very well. And this is also due to the fact that there are a lot of specialists who work in Poland, but who are citizens of Ukraine working remotely. Neither Polish nor Ukrainian specialists are competitors for each other because they complement each other well and develop this field together.

I am very happy that 47% of Ukrainian startups that moved to Poland after the start of the full-scale invasion plan to return to Ukraine because it will help the Ukrainian economy.

In addition, Poland, for its part, aims to provide conditions for Ukrainian startups to use European Union funds. That is why, often when such startups decide to relocate from Ukraine, they choose Poland. Ukrainian startups also receive support from Polish and foreign IT companies. And we plan to continue this in the future.

In the Startup of the Day column, CEO and founder of eGabinet Piotr Strychalski shares the details about the startup’s idea, its product, and the future plans.

The Startup of the Day column on AIN is dedicated to tech projects from all sectors that originate from the CEE countries. If you would like to introduce your project, please fill in the questionnaire.

Tell us about your startup. How does it work?

eGabinet was created as an alternative to traditional phone registration. We offer comprehensive solutions for managing medical facilities and patient documentation, thereby significantly facilitating the work of doctors and medical staff. Our software, which uses cloud technology, offers almost instant access to facility data as well as patient medical history from any device, while maintaining maximum levels of encryption and security.

Moreover, eGabinet delivers e-referrals, e-leave notes, and e-prescriptions to the patient within 14 seconds of their issuance, while also making the doctor’s work easier through a range of suggestions during their writing, related to the recommended quantity of packages or dosage itself,

Recently, we established a partnership with Infomex, which allows us to offer our clients the rental of IT equipment with medical certifications, as well as advanced cybersecurity infrastructure, particularly important for facilities that store patient data.

How did you come up with the startup’s idea? What was the reason/motivation behind it?

Observing the market and speaking with both doctors and patients, I noticed a gap for a comprehensive solution that would address all their challenges and problems. Additionally, the traditional patient registration process was inefficient and time-consuming for clinic staff. It is in response to the need for an alternative to traditional phone or in-person registration that eGabinet was created.

Our goal was to develop user-friendly and simple software that allows medical facilities to fully manage patient appointments and their documentation, thereby significantly facilitating the work of doctors and medical staff.

How long did it take to reach the prototype or MVP? What did you encounter?

Our journey from ideation to prototype was swift but meticulous. It took approximately 2 years to develop our minimum viable product (MVP). During this phase, we encountered several challenges typical of early-stage startups, including fine-tuning the user interface for optimal usability, ensuring seamless integration with existing clinic systems, and navigating regulatory compliance in the healthcare sector.

When exactly did you launch your product? Or when the launch is planned?

Within just six months of inception, we successfully deployed our MVP to clients, marking the beginning of our journey towards transforming healthcare management through digital innovation.

Tell us about the startup’s business model. How do you monetize your product?

eGabinet is working on SaaS (Software as a Service) model, and our plans are tailored to needs of our customers and the number of patients visiting their clinics.

What are your target markets and consumers?

Our product is designed for individuals and companies managing medical facilities. Initially, we dedicated our eGabinet offering solely to private institutions, but recently we have also opened our doors to public clinics and medical practices.

Among our clients are facilities that have been in the market for many years as well as newly established ones, to whom we provide comprehensive software and services, such as the aforementioned cybersecurity protections and computer equipment with medical certifications.

If the startup has already launched the product, what are the results: metrics, income, or any clear indicators that can be evaluated.

Over the past year, the number of doctors using our solution has doubled, and the number of appointments served during this period has increased by over 40%.

What about your team? How many people are working in the startup? If you’re looking for new employees, indicate whom exactly.

Currently, our team consists of 23 members and we are continuously growing. Moreover, I am also focused on expanding our advisory team. Therefore, recently, Karol Sadaj, known from Revolut and Aion Bank, and Dawid Sukacz, one of the managing partners at the private equity fund 21 Concordia, have joined the supervisory board of eGabinet.

Have you already raised any investments? Provide us with more details on each funding round: the amount, investors, the purpose of the investment.

We raised our first round of funding in 2020 from Netrix Ventures. This capital enabled us to refine its software, build a team, and begin broad-scale implementations. At the end of 2023, we closed our second round of a 2,4 million zlotys coming entirely from business angels.

What’s next? Tell us about your future plans.

We are currently working on strengthening our position in Poland, with a strong focus on sales.

Additionally, we are continuously expanding the functionality of our system as well as our range of additional services. Our goal over the next few years is to become the leading software provider for medical facilities in Europe.

• Founded in 2020 by Václav Hodek, Localazy provides easy l10n (localization) and i18n (internationalization) solutions for NGOs, foundations, businesses of all sizes, and global communities, including machine translation, multilingual marketing tools, and quality assurance services. Currently, the company operates in North and South America, Africa, Asia, and some European countries.
• Among its clients are such companies as ROUVY and Scaleway. Some non-profit and social enterprise platforms like Plastic Bank, Donar Online, or CARE also use the Localazy platform. In 2023, the startup received €1 million funding from JIC Ventures, Garage Angels, and 12Bullets, reaching the value of €4.5 million.

• The platform combines AI, experienced translators, and experts from local markets, and is accessible through both subscription and pay-as-you-go models. Its main goal is to help clients reach their target markets through local languages. The company wants to support the fight against language discrimination and ensure equal access to information for all people in the world.

Our mission is to minimize, or even eliminate, language barriers for a billion people around the world. We currently estimate that our platform has already positively impacted the lives of 500 million individuals. Localazy effortlessly translates a variety of content, including websites, mobile games, applications, and information in over 50 formats. We aim to make our solution comprehensive and reach as many people worldwide as possible,

Václav Hodek commented.

The startup also added that expansion to the Polish market allows to support local businesses in their goal to reach their target markets through local languages, as, according to Localazy, only €380 million people speak English natively in the world, and 75% of consumers prefer shopping on websites available in their native language.

• Founded in 2016 by Maciek Balsewicz, bValue is a growth equity firm focused on high-growth and profitable companies in the CEE region. In the interview for AIN, Maciek Balsewicz said that bValue aims to invest in companies that look for full exit within 3-5 years and want to achieve profitable growth without further outside financing.

• The firm has been managing a €100 million growth equity fund for entrepreneurs in CEE and an early-stage fund of €20 million. They have already made 36 investments and exited 12 companies. Its portfolio includes companies like Tidio, More Growth, Spin.ai, Aggero, Your KAYA.
• bValue Growth is bValue’s third and largest fund. BVG aims to invest sums of €5 million — €15 million in a single ticket for an equity stake of 20-40%. In addition, it will also acquire majority stakes. The fund is focused on fast-growing companies from CEE with a significant technological component.

bValue’s strength lies in using the language of technology to build strong relationships with entrepreneurs. Our experience and organizational culture enable us to act as a valuable minority partner capable of adding tangible value,

Maciek Balsewicz, bValue Fund Managing Partner, says.

Roughly half of the capital raised during this phase comes from financial institutions, including the European Investment Fund and the Polish Development Fund. The rest of the capital came from private investors, including Polish and foreign family offices. It was also made possible via the European Scale-up Action for Risk capital (ESCALAR) programme which supports investments in scaleups.

Recruitment for Female Startup Pre-accelerator has already started and will be open till May 31th, 2024, here.

About Huge Thing

• Huge Thing was established in 2012 by SpeedUp Group to support the development of the startup ecosystem in Central and Eastern Europe. It was one of the first operational acceleration program operators for startups in Poland.
• Huge Thing has prepared a series of four programs educational and developmental programs targeted at female founders, including three editions of the Female Founders Fundraising Academy and the Female Startup Pre-accelerator program, lasting until the end of 2026. The first Female Founders Fundraising Academy (FFFA) program was launched in December 2023.

About the second program

• The fresh pre-accelerator program will support 25 women entrepreneurs offering comprehensive knowledge, support from experts, and tools to build and scale their startups. The program will last over two month.
• Participants will engage in workshops covering topics such as testing business hypotheses, product development, building marketing strategies or preparing for valuation and fundraising. In addition, participants will receive individual expertise from mentors and tutors.

Through the Female Startup Pre-accelerator program, we want to support female entrepreneurs from Poland and Ukraine who are at the idea or pre-seed stage on this path. We hope that the knowledge and tools provided to them will allow them to successfully build and scale their companies,

Maria Tyka-Majewska, Senior Program Manager at Huge Thing, commented.

Program timeline

Participants will be able to present their ideas to the jury during the Demo Day. Ten finalists will receive a $10,000 equity-free grant to start a company and further develop their business.

This year’s list included 26 startups from the CEE region with the majority of these companies coming from Poland (12), Ukraine (6), and Romania (4):

1. Shaped Thoughts, a Polish API developer — 322.1% growth rate.
2. Flying Bisons, a Polish UX/UI Design company — 252.1%.
3. Devkit, a Polish Web developer — 247.1%.
4. Empat, a Ukrainian mobile app developer — 158.4%.
5. Ardura Consulting, a Polish PEO company — 104.2%.
6. Artjoker Software, a Ukrainian software developer — 104.0%.
7. IntelligentBee, a Romanian outsourcing company — 103.2%.
8. Expert Allies, a Bulgarian IT staff augmentation — 102.2%.
9. Thespian, a Croatian software developer — 101.8%.
10. FxBits, a Romanian software developer — 99.5%.
11. Havas Digital Kyiv, a Ukrainian video production company — 93.6%.
12. Motife, a Polish recruiting firm — 90.3%.
13. Clarity Ukraine, a Ukrainian ERP consulting and SI — 86.4%.
14. IT SQUAD, a Polish big data consulting and SI — 86.0%.
15. Advascale, a Latvian cloud consulting — 83.2%.
16. Riseapps, an Estonian software developer — 79.7%.
17. Innovation Software, a Polish software developer — 75.7%.
18. Bit Adventure, a Polish wed developer — 69.7%.
19. Winged IT, a Polish IT staff augmentation — 64.3%.
20. Digitalya OPS, a Romanian software developer — 62.5%.
21. iomico, a Polish IoT developer — 59.0%.
22. Apzumi, a Polish software developer — 56.6%.
23. Bits Orchestra, a Ukrainian software developer — 55.0%.
24. Ragnarök Group, a Ukrainian IT staff augmentation — 54.0%.
25. Droids on Roids, a Polish mobile app developer — 52.8%.
26. eCommerce Today, a Romanian email marketing — 51.0%.

Here is the full list of companies in the 2024 rating:

To determine the ranking, Clutch was provided with audited financial data, which was later compared in terms of absolute revenue growth rates from 2022 to 2023. The leaders of these fast-growing companies have a wide range of services including mobile app development, digital marketing, call center services, SEO, IT services, and more.

Companies included in the 2024 Clutch 100 are headquartered around the world, including the US, Canada, Europe, South America, and Asia.

About Clutch

For the past six years in a row, Clutch has been recognized as one of Inc.’s 5,000 Most Dynamic Companies as well as by the Washington Business Journal as one of the 50 Most Dynamic Private Companies in the DC Metro Area for 2023. It provides B2B services.

About the Huge Innovators Map

The latest release of the Huge Innovators’ Map indicates the market trends by showcasing large firms eager to engage with innovative startups. This map is created created by Huge Thing, part of the SpeedUp Venture Capital Group, and PFR Ventures, the largest fund investor in the CEE region that supports the development of the local VCs and private equities.

This is already the third edition of our map of corporations open to cooperation with startups. The main goal is to make it easier for founders to prepare for cooperation with large organizations by clearly specifying their expectations and possibilities,

Monika Synoradzka, CEO of Huge Thing, commented.

The map includes data on the companies in such categories:

• EnergyTech;
• CleanTech;
• FinTech;
• RetailTech;
• LegalTech;
• MedTech;
• EdTech;
• HRTech;
• FoodTech;
• InsurTech;
• PropTech;
• Agritech;
• MarTech.

The most commonly included companies on the map are Veolia, Maspex, Orlen VC, BNP Paribas, InPost, Ciech Ventures, Future Mind, Rossmann, Novartis, Citi Hadlowy, Institute of Mother and Child, Neuca, PGE Ventures, Grupa Azoty, Transcom, Ringier Axel Springer, PZU, and others.

Most of the bunch ready to support fully developed products, with less focused on a ready MVP. Only a few are prepared to invest in prototype solutions. As per the possible forms of cooperation, the map includes CVC investments, M&A, implementations, or business cooperation, with the latter being the most popular.

In the Startup of the Day column, Adam Żaczek, co-founder of 1.security, shares the details about the startup’s idea, its product, and future plans.

The Startup of the Day column on AIN.Capital is dedicated to tech projects from all sectors that originated from the CEE countries. If you would like to introduce your project, please fill in the questionnaire.

Tell us about your startup. How does it work?

1.Security solves the problem of ‘who has access to what and why’ for the complex and opaque Microsoft 365 permission ecosystem. It integrates with Microsoft 365 to provide visibility and control over users, files, sites and groups to their relationships.

How did you come up with the startup’s idea? What was the reason/motivation behind it?

The escalating sophistication of cybersecurity threats, coupled with the frequency of high-profile breaches in recent years, has deeply motivated me to seek out effective solutions. The Microsoft 365 ecosystem, with its complex and opaque permission access landscape, represents a prime opportunity for stopping cybercrime.

How long did it take to reach the prototype or MVP? What did you encounter?

We encountered an unexpected challenge that wasn’t part of our initial assessment — group management within Microsoft 365, a critical aspect that essentially set users up for failure.

Groups that are crucial for organizing work and sharing permissions in OneDrive and SharePoint present a unique challenge. Their variety, combined with their lack of visibility in a single, accessible location, complicates the management process. Moreover, constructing a comprehensive list of all group members becomes a daunting task, especially considering the possibility of nesting groups within groups, where one group’s members can be another’s owners, and so on. This intricacy significantly escalated the difficulty of answering seemingly simple questions like “who has access to this folder and why?”.

This revelation forced us to reevaluate our approach, leading to solutions tailored to navigating and simplifying the convoluted group management system in Microsoft 365. The experience not only highlighted the depth of the challenge but also sharpened our focus on creating a tool that offers clarity and control, making cybersecurity intuitive for every user.

When exactly did you launch your product? Or when the launch is planned?

We have a closed-access launch in 2 months. We plan the open-access launch in 4 months.

Tell us about the startup’s business model. How do you monetize your product?

Our startup is committed to democratizing cybersecurity within the Microsoft 365 ecosystem, making it intuitive and accessible for all businesses, regardless of size or technical expertise. To align with this mission, we’ve chosen a pay-per-user monetization approach that scales with the needs and sizes of our customers.

What are your target markets and consumers?

Our solution caters to 345 million paid Microsoft 365 users, ranging from small businesses to large enterprises, across various industries. The three notably big sectors are banking, IT and construction.

What about your team? How many people are working in the startup? If you’re looking for new employees, indicate whom exactly.

Our team at 1.Security comprises five dedicated software engineers, each with a deep understanding of cybersecurity challenges and a strong background in developing intuitive, user-friendly solutions. From the outset, we had a clear vision of the expertise needed to bring our project to life, and we’re fortunate that all of our top-choice candidates embraced our mission and joined us.

In addition to our core team, we’re supported by a distinguished group of three advisors. These individuals bring a wealth of experience, having founded successful cybersecurity firms and spearheaded significant initiatives within large tech companies. Their insights and guidance have been invaluable, helping us navigate the complexities of the cybersecurity landscape and refine our product strategy.

We believe that the synergy between our team’s technical prowess and our advisors’ strategic acumen is a cornerstone of our platform’s success. This blend of skills ensures we’re not just developing a product but are also deeply attuned to the evolving needs of our users and the broader cybersecurity ecosystem.

As we continue to grow and evolve, we’re always on the lookout for talented individuals who share our passion for making cybersecurity accessible to everyone. Specifically, we’re interested in expanding our team with roles in product development, customer success, Microsoft 365 and software engineering.

Have you already raised any investments? Provide us with more details on each funding round: the amount, investors, the purpose of the investment.

We’ve raised $500,000 from Polish-German fund Sunfish Partners for launching the product and going from ideation stage to first paying customers.

What’s next? Tell us about your future plans.

In the long term, we envision transforming the landscape of permissions management. Our goal is for our platform to become the gold standard in addressing the critical question of ‘who has access to what and why’ across organizations worldwide. We believe that within a few years, our solution will not only simplify permissions management but also significantly enhance cybersecurity and data governance practices.

This initial closed-access period is crucial for us. It’s a time for focused improvement and iteration, allowing us to perfect our product based on user feedback before we introduce it to the broader market. Once we’re confident that we have achieved our high standards of usability and effectiveness, we’ll proceed with a full launch,

In the short term, our focus is on closely collaborating with our early adopters. We’ve identified a select group of customers who are as excited as we are about the potential of our platform. Together, we’ll refine and enhance our solution, drawing on their feedback and experiences to ensure that it meets the real-world needs of businesses navigating the complexities of MS 365 permissions.

AIN.Capital’s chief editor had the opportunity to talk with Mariusz Adamski, a Partner at ff Venture Capital, about the fund’s activities in 2023 and plans for 2024, as well as discuss what makes the CEE market so appealing to investors.

Tell us the story behind ff Venture Capital.

ff Venture Capital is an early-stage venture capital firm with a unique footprint spanning the United States and Poland. Eschewing the traditional model of a centralized headquarters, ffVC embraces a modern, decentralized approach to venture capital. This is evident in its operation through dedicated teams that cater to the European and US markets, operating out of strategic offices in New York and Warsaw. Such a structure highlights ffVC’s dedication to combining local insights with a global perspective, ensuring a broad impact across the startup ecosystem.

ffVC’s journey began in 2008 with the establishment of its first office in New York City, marking the start of its mission to support early-stage ventures. Expanding its geographical footprint, the firm extended its operations to Warsaw in 2020, assembling a dedicated team of investment professionals to oversee its European ventures. This expansion reflects ffVC’s strategic intent to tap into the rich vein of innovation and entrepreneurial talent in Central Europe and to act as a bridge between these startups and global markets, especially leveraging its unique position to connect with Japanese corporate interests. 

In Europe, ffVC actively manages two funds. The firm’s inaugural fund, established in 2020 with anchor investors including Totalizator Sportowy and PFR Ventures from Poland, is already fully deployed. Building on this momentum, ff Venture Capital launched a new investment initiative in June 2023, aiming for a final close of €60 million. This new fund is particularly focused on empowering Central European startups, with a significant portion of funding sourced from Japanese investors. Specialising in sectors such as enterprise software, industrial technology, and sustainability transformation, ffVC distinguishes itself by facilitating unique connections between Central and Eastern European startups and Japanese corporations, a capability few European VCs possess.

In 2023, ffVC made a number of resounding deals. Can you share the general numbers and results of the year?

I’m thrilled to report that ffVC capped off 2023 with a series of remarkable milestones, including the successful closure of 9 new investments. This achievement not only shatters our expectations but also highlights our prominence among regional investment funds.

A significant development this year was the complete deployment of our first fund ff Tech and Gaming, demonstrating our commitment and strategic acumen in identifying and nurturing startup potential. Building on this success, we launched our second fund ff Red & White in Europe, reinforcing our dedication to driving innovation and supporting entrepreneurial ventures across the continent.

Among our notable investments is Molecule.one, a tech-bio innovator revolutionizing early-stage drug discovery with AI-enabled chemical synthesis planning, led by Piotr Byrski and Paweł Włodarczyk-Pruszyński. Additionally, ForActive, co-founded by experienced entrepreneurs Maciej Bieganski and Konrad Howard, is redefining connectivity within the health and fitness community.

2023 also marked a strategic expansion of our team with the addition of two new partners to our European operations, who relocated from Japan to Poland. This move not only strengthens our global perspective but also enhances our operational capabilities in Europe, further solidifying our position as a key player in the venture capital landscape.

ffVC was one of the leading international investors in the CEE region in 2023. In particular, the firm invested in Polish startup ReadyCode and Ukrainian AI startup Respeecher. Tell us more about those deals.

I am glad you asked about some of the most noteworthy investments circling around the entertainment sector. We think that both ReadyCode and Respeecher are both extremely interesting stories from the region which are both still somewhat overlooked.

ReadyCode was founded by a serial entrepreneur, Julek Kopczewski and it addresses the most important problem in game development — how to effectively market games and prolong their sales. The solution can be applied to different genres and the company is seeing strong interest from established game developers.

Respeecher is yet another fascinating story of a team that has thrived despite the war in Ukraine. They have a highly unique speech-to-speech technology and have the potential to become the dominant model in this space. The company has won multiple Emmy awards for voice cloning in TV series The Mandalorian or Richard Nixon in a short documentary. Now, it will be working together with CD Projekt for the Polish language release of the Cyberpunk 2077 expansion Phantom Liberty. [ed. Respeecher has already worked on character voices for Cyberpunk 2077]

From your experience, can you tell us what differentiates the CEE startups from others around the world? What drives you to invest in these startups?

The CEE startup scene distinguishes itself in several ways, making it an intriguing space for investment. One notable factor is the presence of a robust talent pool in the CEE region. Skilled founders, equipped with a diverse range of expertise, contribute to the development of innovative and competitive startups. This depth of talent often translates into a dynamic entrepreneurial environment, fostering the creation of ventures with unique value propositions.

Technological know-how is another key differentiator for CEE startups. The region has demonstrated a remarkable capacity for technological innovation, with startups often leveraging cutting-edge technologies to address market needs. This technological proficiency not only enhances the competitiveness of CEE startups in the global market but also positions them as leaders in specific niches.

Moreover, the presence of good technical schools in the CEE region plays a crucial role in shaping the startup landscape. Institutions such as the Warsaw University of Technology, which is now actively connecting with the venture world through the creation of a new fund, exemplify the growing synergy between academia and entrepreneurship. The integration of educational institutions into the venture ecosystem serves as a catalyst for innovation, providing startups with access to knowledge, resources, and mentorship.

The emergence of funds within technical schools, like the one at Warsaw University of Technology, is a testament to the evolving support structure for startups in CEE. This trend signals a proactive approach to fostering entrepreneurship, facilitating the transition of innovative ideas from academia to the marketplace. The collaboration between these educational institutions and the venture world enriches the startup landscape, creating a more interconnected and supportive ecosystem.

As an investor, these characteristics in CEE startups become compelling reasons for investment. The combination of a strong talent pool, technological prowess, and the increasing integration of technical schools with the venture world presents a promising landscape for identifying and nurturing innovative ventures. The potential for groundbreaking solutions, driven by skilled founders and supported by a conducive ecosystem, makes CEE an exciting and opportunistic region for venture capital investments.

With almost 16 years behind ffVC’s back, what are your thoughts on the current startup and VC climate in the world?

In my view, the current startup and venture capital climate appears dynamic and resilient. Despite the ongoing global challenges, there’s a palpable sense of innovation and adaptability within the startup landscape. Ventures seem to be navigating uncertainties with a blend of creativity and strategic thinking, showcasing the entrepreneurial spirit at its best.

On the venture capital front, it’s interesting to observe a continued appetite for diverse investment opportunities. The landscape appears to be evolving, with an increased emphasis on sectors that address the changing needs of our world, such as health tech, sustainable solutions, and digital transformation.

However, the scene isn’t without its challenges. Economic uncertainties and geopolitical factors could introduce elements of caution. Yet, this very environment often sparks ingenuity, with startups finding innovative solutions to not just survive but thrive in unpredictable circumstances.

Are there any notable changes between the global and Central and Eastern European ecosystems?

When we talk about the global scene versus what’s happening in Central and Eastern Europe, some commentators like to say the CEE market isn’t as active. Sure, the venture market had its ups and downs in 2023, deal-making in Europe took a bit of a hit compared to the years before. But if you check out the latest info from PitchBook, it shows that we managed to keep things above the average for the past 10 years.

Despite what people might think, we’re not seeing the CEE market as some kind of no man’s land. We’ve been facing the challenges head-on and actually found some great opportunities. Actually, we’ve been experiencing a totally different reality, only lately adding amazing companies to our European portfolio.

What are your general predictions on the market in 2024. And can you share anything on your future plans in 2024?

The ongoing development of AI technologies will likely make them more common in existing startups. I believe venture capitalists will be interested in finding startups that use AI to make things work better, make smarter decisions, and come up with creative solutions. This wider use of AI won’t just stay in tech – it will likely spread to regular fields like healthcare, manufacturing, and finance. The question that everyone is asking themselves today is how to capture value in this space and make investments that will realize returns over longer period of time. There is no obvious answer but we will for sure be actively reviewing any AI-related opportunities that have an asymmetric option value.

As the venture capital world matures, I think we’ll see more focus on teaming up and combining efforts. Bigger firms might try to expand by bringing in experts from different areas or teaming up with smaller local players. This could create a more connected network of venture capital on a global scale. Coming together could lead to a stronger and more cooperative investment world, where teamwork drives new ideas and smart decision-making.

Talking about IPOs, they’ve had a tough time recently. But I’m hopeful that as the economy gets steadier, companies with solid foundations will find it easier to go public. I think if businesses have successful exits and the market looks positive, it might get more people interested in IPOs again. Businesses that got support from venture capitalists might see going public as a good next step for their growth. So, there’s hope that a friendlier market will encourage more IPOs, giving investors their money back and encouraging more investments in new businesses. Liquidity is what the broader venture capital market desperately needs these days.

• Founded in 2020 by Piotr Strychalski, eGabinet offers solutions for managing medical facilities and patient documentation. Its software, which uses cloud technology, offers almost instant access to facility data as well as patient medical history from any device, while maintaining maximum levels of encryption and security.
• In 2023, eGabinet has doubled the number of doctors using their solution, and increased appointments by over 40%. In addition, earlier, the startup raised nearly €550,000 (PLN 2.4 million) round backed entirely by business angels.

• The new addition to the team, Karol Sadaj worked as the marketing head of Uber in Poland from 2016-2018. Later, as Country Manager, he introduced the brand Revolut to the Polish market. In recent years, he was also responsible for the development strategy of Aion Bank’s operations, where he served as Country Head Poland.

In the coming weeks, eGabinet plans to introduce several new features to its software such as a financial and accounting module. The startup claims that it will allow for easy budget management and financial liquidity control of medical facilities.

• The €35 million (PLN 150 million) capital commitment is part of the PFR VC Hub program and comes from the Polish Development Fund’s budget. The first agreements were signed at the end of 2022, and the last one in early 2024.
• All investment teams have a well-established presence in the Polish market, with three benefiting previously from PFR Ventures’ support through European Union-funded programs. Funds with PFR Ventures as a Limited Partner are poised to significantly invest in the nation’s innovators, earmarking over €162 million (PLN 700 million) for Polish companies.

With the development of the Polish venture capital market, our offer is expanding. A few years ago, we made a decision to also finance the best Polish teams with PFR funds. We want the managers to have access to capital that gives greater flexibility in terms of investment strategy,

Paweł Borys, President of the Polish Development Fund, says.

The four teams who received the funding

Market One Capital is a Poland-based generalist venture capital firm investing across the whole of Europe. The firm manages the second fund with a target capitalization of about €80 million. Market One Capital funds have in their portfolio such companies as MetaGravity, ConnectEarth, and METYCLE.

The fourth team’s name remains undisclosed. However, it will focus on financing companies in the growth equity phase from Poland and Europe. It is managed by a group of experienced managers, and the target size of the fund is similar to the other funds in the PFR VC Hub portfolio.

• Full Speed Ventures was founded by seasoned industry veterans Wojciech Fedorowicz and Daniel Star The firm brings decades of experience in technology investments to the table, providing insightful, practical guidance to the portfolio companies.
• The second fund will focus on tech founders, making a very small number of selective investments, where it can provide extensive, practical and execution-focused support.
• According to the fund, its small portfolio allows to dedicate substantial time and resources to each company. This strategy also enables them to provide funding for both initial and follow-on investment rounds.

Our approach is about being hands-on, acting as an extension of our portfolio companies’ teams, and guiding them through every challenge and opportunity. With this second fund we target early-stage companies with initial revenues, ready to conquer their sectors,

Full Speed Ventures representatives commented on the launch.

• Typically, the fund invests €1-2 milllion as a first ticket and continues supporting the company across CEE with a strong connection to Poland.
• The firm is based in Warsaw, Luxembourg, and Tel Aviv. Since the launch, Full Speed Ventures have made a number of investments in the areas of cybersecurity, medtech, AI, and consumer, including AVG, Backweb Technologies, Callpage, Cosmose AI, tylko, and others.

How will WUT IF operate?

• In the next three to five years, WUT Investment Factory intends to support 18 startups — eight at pre-seed and 10 at seed stages — with tickets ranging from $120,000-260,000. It’s also an evergreen fund, as it provides more relaxed time frame on returning money to LPs.
• The team plans a first close of $5 million from external LPs and it doesn’t want to rely on money from the university. WUT IF’s will focuses on deeptech startups originating from universities (across the whole of Poland, not only from Warsaw University of Technology).
• The main thesis of the fund is: each team has to be founded by university graduates and will stay in Poland.

We’re offering an alternative: through our contacts with the school we have direct contact with world leading research teams. If there’s a synergy between a team and a startup then we can quickly help to solve this technical issue,

Robert Sitnik, general partner of WUT IF, commented.

• Apart from the capital, the VC fund will also provide the startups with expertise and access to university’s scientists and research groups.

About Warsaw University of Technology

The Warsaw University of Technology is one of the leading institutes of technology in Poland and one of the largest in Central Europe. The university is the co-founder of the VC fund, but it doesn’t have any power over its operations. The VC fund claims it will take from 5 to 20% equity in startups, and insists that it’ll be in the line with the market.

During December 2023 — January 2024, we jointly conducted primary and secondary research among founders of Ukrainian startups. For the primary data acquisition, Techosystem and Movens Capital conducted a survey of more than 100 founders who showed doing business in Poland. AIN.Capital conducted secondary data examination on Ukrainian companies from open sources. Main takeaways include:

• A total of 62 Ukrainian companies established legal presence in Poland.
• There were 11 pre-existing Polish operations in firms before January 22, 2022.
• Out of 43 startups which completed the survey, 24 managed to get financing in the amount of $18.07 million.
• 14 companies raised funds from private investors only: $15 million, among which $4.7 million from Poland.
• 10 companies received grant funds in the amount of $3,22 million, $0.78 million of which in Poland.

You can read the full research here.

Additionally, during the research, PFR Ventures discovered that in 2023:

• A total of 399 Polish companies managed to secure investments.
• The investment amount raised by Polish companies reached nearly $524 million (PLN 2.1 billion).
• During the year, 210 funds were involved in the investment processes in Poland.
• The numbers show a -42% decrease in the value of financing in 2023 compared to 2022.
• The average transaction value also decreased, currently amounting to $1.02 million (PLN 4.1 million), compared to $1.65 million (PLN 6.6 million) in 2022. 

The capital from Polish VC funds predominantly goes to healthtech companies. This has been a tendency for the last 4 years now, with SaaS (subscription model) being the most popular business model, which is applied in over half of the companies.

The labor market in startups also slowed down:

• 9 out of 19 companies that obtained the majority of VC financing in 2019-2023 reduced the number of full-time positions.
• At the same time, the total number of employees in all of the surveyed companies remained at the same level.

The largest investments rounds in Poland during 2019-2023 were:

• Vue Storefront, with PLN 88 million.
• ElevenLabs, with PLN 79 million.
• Kyp AI, with PLN 79 million.
• Blank., with PLN 70 million.
• Contec, with PLN 70 million.

Why is it important?

Since the start of the full scale invasion, Ukrainian startups have begun moving westwards, opening offices in neighboring countries. Particularly, the Polish ecosystem was one of the most desired destinations for Ukrainian founders to implement their plans for expansion, managing to get investments from local and foreign funds. This trend already shows remarkable numbers which will most likely continue to grow as the cooperation between the Ukrainian and Polish ecosystems strengthens.

In the Startup of the Day column, Cezary Chałupa, the co-founder and Chief Commercial Officer of Multilango, shares the details about the startup’s idea, its product, and future plans.

The Startup of the Day column on AIN.Capital is dedicated to tech projects from all sectors that originated from the CEE countries. If you would like to introduce your project, please fill in the questionnaire.

Tell us about your startup. How does it work?

The idea behind Multilango is very simple — it’s a platform for companies that want to meet the expectations of their employees and offer them the benefit of learning foreign languages in the most modern way possible. With the subscription, an employee can learn one or several languages of their choice. The learning takes place online in a one-on-one format, with experienced instructors tailored to the user’s needs and proficiency level.

How did you come up with the startup’s idea? What was the reason/motivation behind it?

A few years ago, the thought occurred to us that subscription-based sports cards are currently one of the most widespread employee benefit, essentially becoming as popular as private healthcare.

The second thought was: has anyone done something similar for language learning? It turned out that in Poland, and upon deeper research, in other countries as well, there was a gap in this area. Thus, the idea for the business was born.

How long did it take to reach the prototype or MVP? What did you encounter?

The preparation of the MVP took about 8 months. We knew exactly what we wanted because we had previously conducted a Proof of Concept, which gave us the comfort of bypassing many challenges characteristic of new products. So, we practically encountered no significant obstacles.

When exactly did you launch your product? Or when the launch is planned?

We launched the product in the market in the fall of 2022, and that’s when the first customers appeared.

Tell us about the startup’s business model. How do you monetize your product?

We provide a subscription-based service. First, we sign a framework agreement with the employer who wants to provide our service to their employees, and then every month, we invoice a subscription fee based on the number of users the employer gives access to our service.

What are your target markets and consumers?

Experience shows that corporations, as well as medium and large companies, have budgets for employee development, so it’s natural that we contact them first. We also work with international corporations.

In reality, neither the size of the company nor the client’s industry has much significance for us. We love them all,

As for geographic markets, we started in Poland, but currently, companies from other countries are using our service because our clients often have subsidiaries abroad. The platform has been prepared from day one to serve clients worldwide.

If the startup has already launched the product, what are the results: metrics, income, or any clear indicators that can be evaluated.

Currently, we are working with the first few dozen corporate clients, and last year, we crossed the one million PLN revenue mark (about €250,000) for the first time.

What about your team? How many people are working in the startup? If you’re looking for new employees, indicate whom exactly.

Our team currently consists of 5 people and about 150 foreign language tutors. More people will join this year, and we are always on the lookout for good teachers.

Have you already raised any investments? Provide us with more details on each funding round: the amount, investors, the purpose of the investment.

So far, we have gone through two funding rounds: pre-seed and seed. In the pre-seed round, the Czysta3.vc fund joined us, and in the seed round, we gained support from the Tar Heel Capital Pathfinder and Ekipa Investments funds, as well as a private investor.

In total, we have raised nearly €690,000 (PLN 3 million) in funding. Of course, the pre-seed round was allocated for creating the MVP and entering the market, while the seed round will mainly serve market expansion but also further product development.

What’s next? Tell us about your future plans.

Our future plans primarily to increase Mulrilango’s presence in the market and scale sales, as well as to further develop the product’s functionalities, including work on machine learning and speech recognition features. We have big ambitions in this regard.

About SMOK Ventures II Fund

• SMOK Fund II has already invested in 12 startups from Poland, Ukraine, Czechia, Croatia, Bulgaria, Latvia, Serbia, and Bosnia. Among them are 57hours, a Croatian marketplace for tourists seeking non-standard trips, and Gotiva, a Polish-Bosnian graphic developer startup.
• The fund aims to supports startups from Central and Eastern Europe at pre-seed and seed investment stages which work in software development, game development, and artificial intelligence. The ticket amount is from $100,000 up to more than $1 million.
• According, to SMOK Ventures, the first close of Fund II was in 2022 and remained unannounced. The latest close of the fund was finalized on the 23rd of January. PFR Ventures, a Polish finance institution dedicated to fund investments, joined as a key limited partner.

We started deploying capital from the beginning of 2023, which means we are already working with teams. Over the past year, almost 300 Ukrainian teams entered our pipeline. In total, during 2023, we reviewed over 1,200 startups from the CЕЕ and have already made three investments in Ukrainian Finmap, Workee, Masthead Data.

Oleksandr Yatsenko, Principal at SMOK Ventures. 

• The main goal in 2024 for SMOK Ventures is to secure at least 10 new projects. Poland will remain its primary market.

PFR Ventures, part of the Polish Development Fund, fully owned by the Government of Poland supported SMOK II, and had previously invested in SMOK I. It claims that startups from the first fund’s portfolio are already generating over €31 million revenue annually and employing more than 650 people.

SMOK Ventures is one of the 20 most active Polish VC funds in 2023, according to AIN.Capital. Its global network of funds has over $400 million under management. The fund is co-managed by Paul Bragiel, Diana Koziarska, and Borys Musielak. 

2023 was not as successful as 2021 and 2022 for the Polish market. There has been a decrease in the number of investments due to the global slowdown in the technology sector, and the completion of their investment cycle in 2023 of some funds.

• 51 foreign venture capital funds invested in Polish startups in 2023 (-40% compared to the same period last year and -46% compared to 2021)
• 46 local VCs provided equity financing this year (-25% y/y and -28% vs 2021)

5 most interesting deals in Poland over 2023:

• €17.3 million round for ElevenLabs from Nat Friedman, Daniel Gross, and Andreessen Horowitz, with further participation from Credo Ventures, and UK’s pre-seed fund Concept Ventures;
• $20 million investment for Vue Storefront led by Felix Capital, with participation from Creandum, Earlybird, SMOK Ventures, Movens Capital, and SquareOne;
• $5.8 million Series A funding round led by J2 Ventures and Story Ventures for Aether Biomedical;
• $2 million pre-Seed round co-led by Heartcore and Inovo VC for Quesma;
• $14 million Series A funding round for AI Clearing led by Prudence with participation from FJ Labs, Tera Ventures, Inovo, and Innovation Nest.

The most active funds on the Polish market

This list includes those funds that announced at least 1 investment in a Polish startup since the beginning of 2022, as well as Polish funds that have attracted some capital in 2023, but have not yet made any investments. Among local VC funds are Inovo, Black Pearls, bValue, SpeedUp, Radix Ventures Partners, Smok Ventures, and Aper Ventures.

Predictions for 2024

Despite last year’s data, 2024 is expected to be a good year for the Polish startup ecosystem. There is a global recovery in the technology sector, and for the first time since the first quarter of 2022, the median new ARR among software companies turned positive.

About 40 new funds are to be launched in 2024, as the Polish Development Fund launches the second edition of its programs.

The report is based on the data collected from thousands of daily users of the DevSkiller platform. AIN.Capital shares the key insights of the report.

The most popular technologies in 2024

Java will remain the most popular technology in 2024. With 27.15%, Java overtook JavaScript (19.17%), the most in-demand technology, according to the 2023 report. SQL finished 3rd with 8.59% of all assessments. The 4th and 5th positions are Python (8.01%) and NET/C# (6.92%).

This trend shows Java’s rising dominance and the industry’s continuous adaptation to changing technological demands and innovations.

Scala is the fastest growing technology

Regarding the fastest-growing technology on the DevSkiller platform, Scala is a clear winner this year
with 166.25% growth. Last year’s first place Blockchain lost one ranking and is now second on the list
with 120.74% growth. Given the growing importance of Big Data, it’s no surprise that Scala is on the rise as it powers the data engineering of many companies.

Jira is the most popular overall skill in 2024

In the 2024 soft skill landscape, “Jira” is the leading skill on the DevSkiller platform, 15.31% employees used it. The next one is “Problem Solving” (12.53%), showing its significant role in professional competencies.

In the third place is “Git” with 8.00%, which indicates its important role in the development of modern software. “Confluence” and “Effective Communication” also occupy important places with 7.27% and 7.20%, respectively.

Tech candidate behavioral insights

In 2023, the most frequently acquired skill was agility. This indicates a growing demand for a flexible and adaptive approach to project management in the technology industry. In second place is effective communication with a score of 16.12%, underscoring its indispensable role in nowadays work environment, and broadly understood innovation remained at a high level of 15.16%.

In addition, to tech and behavioral skills, English language skills and data analysis reached 13.26%, reflecting their significant role in the global business world and data-driven decisions.

This diverse range of acquired skills indicates the changing nature of professional requirements in the technology industry, where an increasingly important aspect is the combination of technical, communicative, and innovative competencies.

About DevSkiller

DevSkiller is a Warsaw-based HR technology company specializing in scaling, managing, and developing employee skills. The company provides the platform consisting of two main components: TalentScore and TalentBoost.

• Before Russia’s full-scale invasion of Ukraine in January and February 2022, Ukrainians were registering just over 200 individual entrepreneurs (jednoosobowa działalność gospodarcza) in Poland every month. As a result of the registrations growth throughout 2023, 30,325 new Ukrainian companies were created in Poland. This is over 67% than in 2022, when the number of new entrepreneurs was 18,139.
• The number of all new individual entrepreneurs registrations in Poland reached 299,300. In total, throughout 2022–2023, Ukrainians registered 48,464 individual entrepreneurs in Poland.
• Polish laws also contribute to the development of Ukrainian business. From 2023, Ukrainians can register businesses in Poland under the same conditions as Poles.
• Most Ukrainians work in Poland below their qualifications and skills due to the language barrier or the lack of recognition of their diplomas.

The Polish economy suffers from a labor shortage. We’are facing a huge shortage in the labor market, and Ukrainian workers and entrepreneurs are filling the gaps where it is lacking: in construction, transport, IT, and the service sector. We must try to keep them here, encourage them to work in our country, so that they do not want to go, for example, to Germany, because we simply need them,

Lukash Bernatovych, president of the Association of Employers Business Center Club, commented.

In addition, the report shows that the growth of the number of Ukrainian companies doesn’t make a special impression on Polish entrepreneurs. Only 27% of companies fear competition from Ukrainian companies on the Polish market, while 61% don’t perceive it as a threat.

The application is open until the 20th of January, here.

What does ReaktorX offer to startups?

• ReaktorX supports startups from the entire CEE region, including Romania, Poland, Hungary, Serbia, Croatia, Bosnia & Herzegovina, Kosovo, Ukraine, North Macedonia, Albania, Moldova, Montenegro, Bulgaria, Slovenia, Slovakia, Czech Republic, Lithuania, Latvia, Estonia, as well as Azerbaijan, Armenia, Georgia, and from various areas to raise a new generation of unicorns.
• The program provides €25,000 pre-seed funding, a financial boost in exchange for 5% equity, and €75,000 in discounts and credits.
• ReaktorX also provides instant help from experienced entrepreneurs and founders from CEE and access to ReaktorX network.

In the previous May 2023 ReaktorX batch, 245 applicants from 12 countries wanted to participate in the program. However, the program only accepts 5 startups in total and only one per country. The previous batch included companies like Nethica, DIMA, PipelinerOnline, Haip, and The Linghos.

In the Startup of the Day column, the founding team of ZeroQs shares more details about the startup’s idea, its product, and future plans.

The Startup of the Day column on AIN.Capital is dedicated to tech projects from all sectors that originated from the CEE countries. If you would like to introduce your project, please fill in the questionnaire.

Tell us about your startup. How does it work?

Our subscription-based SmartCart solution addresses a range of challenges faced by retail chains while dramatically enhancing the consumer shopping experience. Our technology primarily simplifies the shopping process by eliminating the most disliked aspect of in-store shopping – waiting in checkout lines. Customers using our cart simply scan products as they add them to the cart, which is verified by an integrated vision and weight system. As a result, payments are automatically charged to the customer’s account when they leave the store, avoiding the hassle of standing in the checkout line.

This enables retail chains to require fewer staff by automating the sales process. Additionally, it allows for more efficient inventory management, reduces losses and theft, and provides access to unique customer purchasing activity data. With built-in screens, SmartCart can also display personalized advertisements.

On the other hand, retail chain customers gain convenience and time savings. They avoid queues while benefiting from automated service, simple payments, and exceptional shopping experiences.

How did you come up with the startup’s idea? What was the reason/motivation behind it?

Having worked in the industry for many years, we’ve noticed that market solutions, such as self-service systems, are either convenient for customers (e.g., handheld barcode scanners) but risky for stores (lacking theft protection – customers can take items without scanning) or, conversely, secure for stores (e.g., self-checkout tills) but inconvenient for customers (queues at checkouts, repacking products).

Based on our knowledge and experience, we wanted to create a solution that is both convenient for customers and secure for stores. This is how the idea of SmartCart was born.

How long did it take to reach the prototype or MVP? What did you encounter?

The development of our MVP took over two years. These were R&D efforts during which we had to develop a complete technology to monitor the customer’s purchasing process. One of the biggest challenges was creating a weight system that functioned effectively in motion while also being durable and resistant to damage.

When exactly did you launch your product? Or when the launch is planned?

In 2023, the first shops in Poland began utilizing our solution and their number is steadily growing.

Tell us about the startup’s business model. How do you monetize your product?

The product is sold with a margin, and we also offer a subscription model for SmartCart. However, billing details are always individually negotiated with each retail chain.

What are your target markets and consumers?

ZeroQs’ mobile self-checkout technology is designed for the broad spectrum of the retail market. We are not geographically limited, and our solution can be implemented anywhere in the world where there are self-service stores.

If the startup has already launched the product, what are the results: metrics, income, or any clear indicators that can be evaluated.

Over 80% of customers use the smart cart more than once, which shows that they are loyal and primarily satisfied with the value we offer. Thanks to advertisements displayed on SmartCart screens, we increase the basket value by 25%, which is an excellent result.

What about your team? How many people are working in the startup? If you’re looking for new employees, indicate whom exactly.

Currently, our team consists of 6 members, along with many external partners who support our development. We are continuously growing and seeking new talents for programmer and account manager positions.

Have you already raised any investments? Provide us with more details on each funding round: the amount, investors, the purpose of the investment.

Yes, we are supported by VC funds and have so far secured a pre-seed round of €250,000 from ValueTechSeed for R&D work on our solution, as well as an additional funding round of €1 million from Freya Capital for the commercialization of our solution and further development work.

What’s next? Tell us about your future plans.

Currently, we are rapidly implementing our solution in retail locations across Poland and preparing for expansion into Western European markets.

Since the outbreak of the full-scale war, many Ukrainian companies have begun expanding into the markets of Central and Eastern Europe. Poland has become one of the countries where large IT businesses such as SoftServe, Yalantis, Creatio, N-iX, and startups like Mate Academy have actively opened offices, relocated team members, or seen the creation of new companies.

We were interested in learning more about how Ukrainian startups feel in the Polish market — whether they have managed to attract investment, what challenges they have faced and are facing, what they perceive as the prospects for business in Poland, and what their plans are for the future.

That’s why AIN.Capital, in collaboration with Techosystem, a Ukrainian association of tech ecosystem players, has partnered with PFR Ventures and Movens Capital to conduct a new survey of Ukrainian startups. The survey is anonymous and will take no more than 10 minutes to complete.

YouTube is a platform for entertainment, not political news

The investigation reveals that in Poland, YouTube is used less frequently than in Ukraine for news consumption. Polish audiences primarily use subscription-type media (online media, television, or streaming platforms) for news and political talk shows.

For example, Polsat News, a news channel that is part of the extensive digital multi-channel television network Polsat Network, has a nearly inactive YouTube channel with 117,000 subscribers, with the last update being three months ago. Another example is the news channel TVN24. It is available on various digital platforms and cable television. The official YouTube channel of TVN24 has only about 90 videos.

Anti-Ukrainian and pro-Russian propaganda in Polish YouTube

Nevertheless, if a user watches videos with anti-Ukrainian and pro-Russian narratives, the recommendation algorithms generally offer many new videos with similar narratives.

While none of the 50 largest Polish YouTube channels in December, operate in the “News and Politics” category, still, one of the main source for disseminating various political narratives is bloggers:

• One of the examples is Dziki Trener (“Wild Coach”). Today, the blogger uses his platform to express stances on current socio-political issues in Poland. His content, promoted by YouTube itself, suggests videos like “Poles Are Easily Influenced,” “Ukrainian Gratitude,” or “Polish-Ukrainian Friendship.”
• Another example is Wojciech Cejrowski, a Polish journalist and satirist. Cejrowski’s videos have sometimes justified Putin’s decision to start the war, blaming Poland and Western countries. Before the full-scale invasion, he propagated views like “Putin’s goal is Ukraine, but Biden’s goal is war.”
• One of such examples is also the ultranationalist channel Media Narodowe (“National Media”) by Polish nationalist Robert Bonkiewicz, which has repeatedly disseminated Russian propaganda narratives and broadcasted hate speech against Ukrainians and Jews.

According to the study, YouTube continues to promote similar ultranationalist videos, classifying them under “News and Politics,” “Blogs,” and “Education” categories.

Three key factors of EU’s fight against disinformation on YouTube:

Despite the existence of anti-Ukrainian and narrative bubble, Poland is quite protected from the pro-Russian propaganda thanks to the EU laws against disinformation.

1. Firstly, YouTube users in Poland are significantly more protected from Russian disinformation than Ukrainians, because they don’t consume content in Russian.
2. Secondly, YouTube does respond to complaints from civic organizations fighting against hate speech and calls for violence.
3. The third level of protection against disinformation is the EU’s moderation policies on YouTube, which require large platforms and search engines to strictly monitor posted content including propaganda.

While YouTube algorithms still let some of the Russian propaganda through, the EU’s moderation policies are one of the most effective methods of pressuring such social platforms into limiting the access to it.

The first in line is the Female Founders Fundraising Academy (FFFA) program, a complimentary 8-week educational program, sponsored by Visa Foundation. It offers practical knowledge focused on fundraising, capital acquisition planning, preparation for discussions and negotiations with investors, developing startup valuations, and legal aspects related to this process. Each participant will have access to 25 hours of training and 6 hours of 1-on-1 mentorship.

Recruitment for Female Founders Fundraising Academy has already started and will be open till February 11th, 2024, here.

Who can apply?

• Female founders with Polish or Ukrainian citizenship.
• Have experience in running their own business.
• Have a startup that is ready to scale.

What can founders get?

“Through the educational programs we have prepared, we aim to support access to knowledge and thereby foster the development of entrepreneurial women from Poland and Ukraine,”

Monika Synoradzka, CEO of Huge Thing, comments.

• Founders will receive 25 hours of training divided into 3 areas: improving business mode, VC workshops, and creating a “go global strategy”.
• 6 hours of 1-on-1, where an experienced mentor will help assimilate the new knowledge and apply it strategically to your business.
• Access to Huge Thing Mentors, Experts, and Partners network, as well as other networking opportunities.
• Increased visibility in the CEE startup ecosystem.
• Invitation to Female Founders Club, a space for alumni where Huge Thing will provide extra activities

Program timeline

About Huge Thing

Huge Thing was established in 2012 by SpeedUp Group to support the development of the startup ecosystem in Central and Eastern Europe. It was one of the first operational
acceleration program operators for startups in Poland. Today, besides supporting
innovation creators in business development, the Huge Thing team utilizes its expertise to assist organizations from both the private and public sectors in innovation management.

General overview

• This year’s report saw a record average company growth of 1502% in the top 50 ranking.
• The number includes such industry segments like software (31 featured company), fintech (4), hardware (4), media & entertainment (4), environment technology (4), and healthcare and life sciences (3).
• Poland and Czech Republic tie in for the first spot with 18 companies featured. Croatia is in the top three with 5 companies, followed by Slovakia — 4, Romania — 3, Bulgaria and Serbia — 1.

The winners

1. The highest growing company, Czech fintech FTMO, experienced a 5815% growth this year, becoming a three-time winner of the CE Technology Fast 50 ranking.
2. Another Czech business, CityZen, took the second place. The natural textile manufacturer achieved a 5160% revenue growth.
3. The Polish fintech company, Paypo, reached the third place with 3305% growth.

The rest of the list looks like this:

Criteria

Companies eligible for the report must have base-year operating revenues of €50,000 in 2019, 2020, 2021 and a current year operating revenue (2022) of at least €100,000, and have headquarters in selected CE countries: Albania, Bulgaria, Bosnia & Herzegovina, Croatia, the Czech Republic, Estonia, Hungary, Kosovo, Latvia, Lithuania, North Macedonia, Moldova, Montenegro, Poland, Romania, Serbia, Slovakia, or Slovenia.

• Founded in 2013 by Maciej Zawadzinski and led by Piotr Korzeniowski, Piwik PRO is a fast-growing company that develops a platform for collecting, analyzing, and activating web and application data.

• The exit is part of the broader transaction, a merger of Piwik PRO with another tech vendor Cookie Information, a Danish consent management platform.

“We are thrilled to have had the opportunity to support Clearcode and Piwik PRO, along with their founder Maciej Zawadziński, in their development over the past few years. This was not a traditional venture capital or private equity project. Investing in software houses with a product is one of our key investment theses; we are actively seeking similar projects to support,”

Przemek Danowski, Managing Partner of Warsaw Equity Group, commented.

• Warsaw Equity Group achieved a 4.1x cash-on-cash return and 25% IRR on the joint transaction (Piwik PRO and Clearcode).

Polish economy: main indicators

• In 2022, Poland’s GDP per capita has increased from €14,60032 to an estimated €15,61233 in 2023.
• However, the GDP growth rate has decelerated from 5.1% in 2022 to an anticipated 0.6% in 2023, signaling a possible slowdown in economic expansion.
• The average monthly cost of living is €647 for a single person and €2,040 for a family of four.
• Poland’s annual inflation rate was 10.1% in August 2023, easing from 10.8% in the previous month and marking the lowest rate since February 2022.

Ecosysem overview:

• Poland has over 3,300 startups, its almost 25% of the startup scene in Central Eastern Europe, which has a total of 14,300 startups.
• Additionally, Poland’s ecosystem was valued at €40.3 billion in 2022 and €47.7 billion in 2023, comprising more than 40% of CEE’s total ecosystem value, which is estimated at €102.8 billion for 2022.
• The size of Poland’s Startup Ecosystem is relatively small comparing with the top 3 biggest and most mature players in the EU-27 group, such as the UK, Germany, and France, which are valued at €888.6 billion, €638.9 billion, and €312.3 billion, respectively.

“Poland continues to show promise as a growing player in the global venture capital landscape. While Poland’s funding amounts may not rival those of its European peers, its consistent growth demonstrates a maturing market.”

Magdalena Pietrzykowska, Fellow, VCLeaders.

Key industries to invest

• The survey shows that local investors in Poland are concentrating capital predominantly across three key sectors — health, energy, and fintech.
• Health tops the list, with 69% of surveyed local investors focused on this sector.
• Energy and fintech follow closely behind, capturing the attention of 50% and 41% of local investors, respectively.
• Other industries like e-commerce, software, and mobility secure smaller shares of local investor interest, ranging from 25-35% participation.
• It is worth noting that food and “other” categories each received 44% of responses, indicating that investors are exploring beyond traditional sectors and are open to emerging or niche markets.

Top Polish cities for statups:

97% of Local VC funds and 94.1% of international VC funds believe that Warsaw offers the best infrastructure for startups. Wroclaw and Cracow are the next favorites, with 47% and 41% of local VC funds showing preference respectively, and 41% and 35% for International VC funds. Poznan is also on the radar, with 19% of Local VC funds and a slightly higher 24% of International VC funds acknowledging its potential.

Funding in numbers:

Investments in venture capital in Poland have steadily increased over the last five years. The total amount of funding has grown by 5.5 times from 2018 to 2022. The number of funding rounds has almost doubled, from 102 rounds in 2018 to 190 in 2022. The average funding per round has increased 3.5 times, from €0.7 million in 2018 to €2.4 million in 2022.

More recently, in the first half of 2023, there were approximately 243 transactions in the Polish VC market with a total value of €189 million and an average funding per round of around €0.8 million.

Over the past decade, only 7 companies received the top 10 largest rounds, highlighting the importance of having a few big winners. These rounds were mostly led by foreign investors. It’s worth noting that all of these 10 largest rounds occurred within the last 3 years: SunRoof’s €13.5 million Series A extension in January 2023, $70 million in a Series B round for Ramp, ICEYE with its $136 million investment.

Poland’s VC funds overview:

Approximately 90 VC firms currently operate in Poland, but their structures vary significantly, leading to ongoing debates about the true nature of a VC fund in this market. Most of them exhibit the quintessential characteristics of a VC fund, such as pooling investments, backing promising early-stage startups in exchange for equity, and leveraging the expertise of experienced venture capitalists to foster company growth and ensure successful exits.

The following is a brief overview of the 25 most active venture capital firms for 2022, according to the report:

To sum up the Polish state of the ecosystem state:

Currently, the ecosystem is contending with a series of significant impediments. Foremost among these is the challenge of fundraising: a majority (56.2%) of local venture capitalists face difficulties in securing financial commitments from Limited Partners (LPs).

Adding to the complexity is the “dealflow quality gap,” highlighted by 46.9% of local VCs who experience challenges in sourcing high-quality startup investments. A corroborating sentiment is echoed by international investors; data reveals that a resounding 91% believe there’s a dearth of private LP capital earmarked for Polish venture opportunities.

Tell us about your startup? How did you come up with the startup’s idea? What was the reason/motivation behind it?

The idea for Certifier started when we (with Sergey Butko, the co-founder of Certifier) first discussed the issue of digital rewards. We noticed that we had a similar vision were interested in this topic.

On one hand, we saw a specific problem – automating the process of issuing certificates, badges, and various awards. On the other hand, people have always loved receiving recognition for hard work. In the past, it was mainly medals for participating in wars, but nowadays, it’s about certificates, credentials, and achievements in online games. We realized that this area needs to change as we move from physical to digital documents.

Tell us please a bit more about the product. How does it work?

In the past, organizations wanting to offer digital credentials usually had to create these services in-house or use outdated software designed for other types of document management. This was really time-consuming. Certifier provides a streamlined and automated solution, saving these organizations the effort and resources in this area.

“Certifier’s products are designed to be versatile, addressing the timeless desire for recognition. Our solutions are tailored to meet the unique needs of digital certificates, diplomas, badges, and achievements across various use cases, industries, and companies.”

How many investments did you manage to attract in total? Why did you decide to attract fresh investment?

Certifier operates like a typical B2B SaaS company but also has elements of a B2C marketplace. At this point, it’s not a capital-intensive business. From the company’s inception until now, we’ve raised a total of $1.3 million. We raised about $500,000 during the pre-seed stage in 2021/2022, and recently secured another $700,000 in a seed round.

Our current focus is on building an API-first platform and developing products that cater to the specific needs of larger entities. We sought the recent $700,000 to help us reach these objectives.

How quickly did you manage to close this round? How long did the negotiations with the investors last?

We started discussions with some investors as early as February of this year. By May, we had received the initial commitments from participants in the round, and the negotiations spanned about a month in July. So, from the time we began preparing investment materials and engaging with the first investors to the signing of the agreement, it took us 7–8 months.

Since launching in 2020, Certifier has over 400 international clients, including Avon, Stanford Medicine, University of Illinois, Oxford School District, and Salesforce. What makes your product attractive to top customers?

While the concept of digital credentials isn’t novel, what differentiates Certifier is our unique approach. We’ve meticulously reviewed over 50 potential competitors to ensure our solution is distinctive.

We aim to outshine the competition with a product-led growth model that prioritizes low-touch sales, top-notch APIs, and leveraging network effects. Our collective experiences and insights have allowed us to identify market gaps, leading us to craft a superior product.

How many people are in your team, and how many more do you want to hire?

Currently, Certifier’s team consists of 12 full-time members, with the majority being part of the product and technology team. Our philosophy leans towards maintaining a small yet highly skilled team capable of producing an outstanding product.

So, in the upcoming year, we don’t anticipate a significant increase in team size – we expect to have around 20 members by the end of the year.

Tell us more about Certifier’s future plans.

We’re still in the early stages of our journey. That’s why a significant portion of our resources is dedicated to product development.

“As part of our product evolution, we’re making an “up-market move” by partnering with larger organizations and corporations. Moreover, we’re passionate about establishing a globally recognized company based in Poland, capitalizing on the strengths of our region,”

Badges have been used for millennia to validate skills and achievements. With the transition from physical to digital mediums and the rise of online education, we recognize a unique opportunity in this domain.

AIN.Capital talked to Maciek Balsewicz, Founder & Managing Partner of bValue, about the ongoing activities of the fund, its nearest plans, and the state of the Polish VC market in 2023.

Tell us about the fund’s activity in 2023: how many active investments were made, have there been exits/write-offs of investments?

Over the last 12 months, we made 9 new investments, with 6 of them in 2023. With the decreased availability activity in the early-stage funding, we saw much more investment opportunities fitting to our investment policy than we have in previous years.

We have also made our 13 exit and first one from second generation fund — Renters.pl, a leading short term rental manager in Poland. It was acquired by Enterprise Investors. Fortunately, for now we had no write-offs, and we hope this will not change in the coming year.

One year ago, bValue launched its third €100 million fund focusing on later-stage tech startups from CEE. How can you describe the results of this fund?

I wanted to first clarify that our growth equity fund is not a typical later stage VC fund. We are much more interested in EBITDA profitable companies with a little different growth plan for their future.

We are actively investing and for now we see that this type of funding, although not unusual a few years back, is getting more and more interest from founders.

We want to invest in companies that look for full exit within 3-5 years and want to achieve profitable growth without further outside financing. We are investing in tech businesses as well, but not exclusively.

Are you currently negotiating new projects or focusing on supporting portfolio companies? Tell us about your plans for the end of the year?

We are finalising our early stage fund with last investments, but we are more focused on supporting portfolio companies as we made a lot of investments in the last 12 months, and we want to support them in their current development. At the same time, we are actively sourcing new investments from the growth equity fund, so there is a lot of activity in every area of our fund.

How does the Polish venture capital market look now? What trends would you highlight?

We see that more and more funds are finalizing their investment period and are preparing to raise new funds, which will possibly mean a period of downturn in the fundraising activity for startups in Poland. At the same time I see less founders starting new businesses. This may be related to the general economic situation, where people are more scared of risk, but the reality is that we see much less new startups than during 2020-2022.

Has anything changed in the fund’s approach to investing over the past six months — average check, focus, geography. How did the war in Ukraine affect the fund’s activities?

There was no significant change in our approach. We are investing in the CEE region with a focus on Poland. Russian aggression in Ukraine has impacted all of our portfolio companies, some more than others, but I hope the worst is behind us.

What do you think about the Ukrainian startup ecosystem? Does bValue plan to invest in some Ukrainian startups? Or maybe you’ve already had some examples of partnership with Ukrainian companies?

Due to the size of the Ukrainian economy, local startups are focusing on foreign markets, especially in the US. I believe this might be an advantage of these companies compared to Polish startups, as they are better prepared for internationalization and address bigger markets.

“I believe Ukraine’s startup ecosystem is developing very rapidly and we definitely want to be involved there. Among our recent investments in Ukrainian startups is Callpage.”

What is the focus for the next investments? Tell us more about your plans. 

Currently, we are focused on the growth equity fund and are actively sourcing profitable companies looking for growth capital. In terms of our early-stage fund we are focused on portfolio support and exits from previous generation funds.

In the Startup of the Day column, Ross Knap, the co-founder of CallPage shares more details about the startup’s idea, its product, and future plans.

The Startup of the Day column on AIN.Capital is dedicated to tech projects from all sectors that originated from the CEE countries. If you would like to introduce your project, please fill in the questionnaire.

Tell us about your startup. How does it work?

We help to convert website traffic into sales calls. Our ecosystem of solutions increases sales and foster relationships between the company and its customers. 

How did you come up with the startup’s idea? What was the reason/motivation behind it?

We realized that if you promised your customers that you would call back to them in less than 1 minute – your potential customers would want to contact you more often.

How long did it take to reach the prototype or MVP? What did you encounter?

We did a prototype in 3 months – a simple callback that just calls to one number. The prototype was realised by an external freelancer so it was hard to develop it further.

When exactly did you launch your product? Or when the launch is planned?

CallPage launched its first product in late 2015.

Tell us about the startup’s business model. How do you monetize your product?

We have typical SaaS pricing. The basic plan is possible to buy for $30 per month and then depending on the volume of calls and functionality usage we scale our pricing. We have customers who pay us more than $5,000 per month.

What are your target markets and consumers?

Our main consumers are SME companies mostly from the US, Canada, the UK, and the EU. We cooperate with InPost, Docplanner, OLX, Rankomat, Medicover, UPC (currently Play), Vectra, and others.

If the startup has already launched the product, what are the results: metrics, income, or any clear indicators that can be evaluated.

In 2022, we were acquired by SaaS Labs. We passed the typical startup road from pre-seed through investment rounds to exit.

Now, we part of the SaaS Labs group which has more than 7,000 customers around the world with prominent investors on board like Sequoya, Base10 ventures, and others.

What about your team? How many people are working in the startup? If you’re looking for new employees, indicate whom exactly.

Right now in CallPage, we have more than 30 people in our team. In general, in SaaS Labs, there are 350 employees across the globe.

Have you already raised any investments? Provide us with more details on each funding round: the amount, investors, the purpose of the investment.

In total, we raised around €4.3 million. Currently, we are part of SaaS Labs which in total raised about €50 million.

Recently, we acquired LiveCall, Polish largest local competitor.  As a result of the deal, we received the rights to the LiveCall brand and domain, as well as a database of several hundred customers, including Booksy, Seat, Itaka, and Tui Poland.

What’s next? Tell us about your future plans.

All founding members are very professional managers, so our goals are very ambitious. We want to build the best lead-generation solution for SMEs in the world and scale it across the SaaS Labs customer portfolio.

AIN.Capital spoke with Krzysztof Przybylak, a HealthTech investor at Inovo.vc, about the fund’s activities, investments, exits, and the details about future investments.

Tell us about Inovo.vc.

Inovo.vc is one of the oldest and largest VC funds in Poland. It has had three funds under management:

• Inovo I — vintage 2014 — size €8 million.
• Inovo II — vintage 2018 — size €54 million.
• Inovo III — vintage 2022 — size €100 million.

The fund’s main focus is:

• Central and Eastern Europe + diaspora.
• Preferably Seed stage (occasionally Pre-Seed / Series A).
• Ticket range: €500k to €4 million.
• Industry agnostic fund with special focus on healthcare (7 portfolio companies) and AI/ML/developer tools (8 portfolio companies).

The fund’s partners are:

• Tomasz Swieboda, an ex Investment Banking at Rothschild and ex Private Equity investor at Penta. Today he runs our Founders Club.
• Michał Rokosz, an ex McKinsey and Rocket Internet. Focused on B2C startups
• Maciej Małysz, Kauffman Fellow focused on ML/AI and developer tools.

How is Inovo.vc’s performance in 2023?

January 2023 — June 2023:
• new investments: 6 (Inovo III fund).
• follow-ons: 4 (Inovo II fund).

July 2023 — today:

• 1 new deal signed (Inovo III fund)
• 2 new Term Sheets currently in the process of signing (Inovo III fund)
• 1 follow-on (Inovo II fund) — AI clearing.

So to sum up, we did 9 new investments year-to-date.

Some of them are not publicly disclosed yet. The ones announced are: Embla, FiatRepublic, Pupilmed

Were there any successful exits yet?

• We have successfully exited most of our portfolio companies from Inovo I.
• Fund II and Fund III are too early for exits.

Given Inovo.vc’s activity, how many investments are still planned for 2023? What is the focus of your further deals?

We plan to invest around €15 million a year in new companies. We are still able to invest in 2-3 new companies this year.

About the CEE market: Are there any notable differences in the CEE VC and startup market this year?

We can see in Poland that pre-seed/seed rounds are about 20% below the number of previous year (in terms of number of transactions) and there is a significant decline in later stage rounds (Series A and later).

Has anything changed in Inovo.vc’s approach to investments recently?

Our Inovo I fund was focused on Poland only, with the recent funds we do more effort to cover other Central and Eastern European countries too.

Does Inovo.vc experience any effects due to the harsh geopolitical climate (War in Ukraine in particular)?

We can definitely see more Ukrainian diaspora founders in Poland and other countries since the war started.

Two of the most recent rounds joined by Inovo.vc were AI Clearing and Embla. How did the deals come to be? And are you planning to invest in other diaspora startups?

AI clearing — we invested in this company back in 2020, the founders made significant progress since then so the Series A was fully deserved. They were very international from the very beginning.

Embla — we had a thesis on the weight loss market, especially startups combining GLP1 drugs with behavioral therapy. We were actively searching for startups in this space and we got introduced to Embla’s founders from our friendly VC later-stage fund from London. After the initial meeting it was clear that this is the best startup we have seen in this space.

Regarding diaspora — yes, we are actively looking to invest in more diaspora startups.

On a personal note, can you tell us about the specificity of the healthtech investments made by Inovo.vc? Did the industry experience any changes in terms of volume and the number of deals?

• We believe that Poland has one of the strongest healthcare startup ecosystems in the CEE region with over 100 startups founded here.
• We did 2 pre-seed stage healthcare investments in Poland this year and 1 Series A outside of Poland (Embla).
• Similarly to other sectors in Poland, we can see that the number of pre-seed /seed startups is high, but there aren’t that many at Series A or later.

In your opinion, what can you advise to startups or their founders who want to secure financing from Inovo.vc in the future?

It’s difficult to give general advice, every startup is unique in some sense. What helps getting funding from Inovo.vc is knowing your customers inside out and having huge ambitions (market size $1 billion or more).

What happened?

• 11 Bit Studios is a Polish game development company based in Warsaw. The studio was founded in 2010 by former members of CD Projekt and Metropolis Software. It is best known for publishing popular indie titles like Frostpunk, Moonlighter, The Invincible, South of the Circle, The Atlers, and The Thaumaturge.
• On October 18, 2023, 11 Bit Studios announced a new game called INDIKA, which the publisher describes as “a unique, narrative-driven adventure set in a parallel 19th-century Russia”. Along with the announcement, it also released a trailer about how “Russia’s unjust invasion of Ukraine affected the working relationship with Odd Meter”.

• The post immediately garnered attention from the Ukrainian gaming community on X, who felt disappointed by the Polish publisher for giving the spotlight to the studio coming from the terrorist state of Russia.
• Some of the users even expressed the feeling of betrayal, as they loved playing 11 Bit Studios’ titles like Frostpunk, This War of Min, and many others.

• Upon questions about whether the profits would be donated to some Ukrainian humanitarian of relief funds, 11 Bit Studios stated that “a part of the profits will be donated to Ukrainian children affected by the war,” not specifying how much this part actually is.

What does Odd Meter have to say about it?

The work on the game started before Russia launched a full-scale war in Ukraine. In the interview for Polygon, Odd Meter’s founder Dmitry Svetlow shared his feelings about working on the game, despite it being such a sensitive topic for many gamers in 2023:

“I had that feeling that they [the studio] should do it [pull out of the partnership]. I spent the last year getting rid of that guilt, because rationally I understood I shouldn’t feel it. I’m the person who should call myself a patriot, not those who kill Ukrainians, or send Russians to die,”

Svetlov said.

However, the studio decided to keep working on the project, as, according to the developer, INDIKA can be seen as a criticism of the Russian Orthodox church. So far, 10 of 14 Odd Meter workers left Russia for the new headquarters in Almaty, Kazakhstan.

Why the outrage?

Incidentally, 11 Bit Studios announcement came out when Russia launched a “renewed offensive against Ukraine.” As thousands of Ukrainians die each month, the Ukrainian gaming community can feel particularly offended when publishers like 11 Bit Studios or CD Projekt RED show their appreciation for Russian gamers and said “culture”.

It’s commendable that exile developers like Odd Meter publicly condemn the Russian invasion and leave the country. However, 4 out of 14 Odd Meter workers who remained in Russia will probably continue paying taxes. To give such studios funds is to directly sponsor the Russian terrorist regime and war machine.

• Fenige is a licensed National Payment Institution and one of the fastest-growing Central European fintechs. As a principal acquiring member of both Visa and Mastercard, Fenige is known for its secure and efficient payment solutions, exemplifying.
• In 2022, Fenige processed over 3 million transactions worth over €545 million (PLN 2.4 billion). Its year-on-year growth rate exceeded 70%, highlighting the commitment to its offerings including Card payouts, Card-2-Card payments, e-commerce acquiring, and in-house processing solutions.
• Movens Capital made its first investment in Fenige in 2017 during its pre-seed stage of development. Back then, the firm noted the innovative solution and exceptional leadership of key founders, Krzysztof Drzyzga and Marcin Kopy.

“Fenige revenues from transactions in 2022 significantly exceeded €11 million (PLN 50 million) which is stellar growth over the last 5 years. The road was bumpy but the team excelled and managed to successfully navigate all headwinds. Moreover current development proves the company still reaching very good results and assuming future plans upward trends of business outlook will be achieved in long run. We are very pleased with this investment and keep our fingers crossed for Fenige and its team in the future,”

Łukasz Pawłowski, a partner at Movens Capital, comments.

• As a result, the fund achieved a cash-on-cash 4.5x return from this investment, confirming that investments in technology companies have real high return potential for investors.
• The deal marks 6th successful exit for Movens Capital partners, contributing to a weighted return of over 9x.

Movens Fund II

Moving forward, based on the rapid growth of the Movens Fund 1 portfolio, Movens Capital has also decided to build Movens Fund II.

It will be a multi-stage fund (pre-seed, seed, Series A+). First Closing is planned for €35–40 million (€60 million is the target). The firm will invest in over 30 top technology startups in CEE (mainly from Poland, the Baltic States, the Czech Republic, Ukraine, and Romania). 

You can read more about Movens Capital and the future fund in our interview with Managing Partner Artur Banach and Principal Yaroslav Krempovych, here.

The applications are open until October 31, 2023. You can apply, here.

The program’s primary goal is to support the development of the most innovative ideas, regardless of the current level of advancement. The awards are granted in two thematic paths: LifeSciene and Maritime Industry.

LifeScience startups

The LifeScience path is for the startups with innovative solutions in the field of biotech, medicine, health, food, and nutrition, as well as other areas related to improving the quality of life or health.

After going through the program the startups can get:

• Financial prizes: First place — €9,000, second place — €5,600, third place — €4,500.
• Possibility to present their idea to the audience gathered during Demo Day.
• Access to the Space4Makers prototype shop for a period of 3 months.
• Individual mentoring meetings.
• Possibility of support within the Incubator of the Gdańsk Science and Technology Park.

Maritime industry

The Maritime Industry path is for startups within the field of ship communication systems, navigation and technical security, electronics, weapons, technologies, systems and devices for vessels,innovative solutions for the Polish Navy and the shipbuilding industry, robotics, automation, and industry 4.0.

The best team can receive:

• Financial reward of €3,100 (PLN 15,000) for any purpose.
• Possibility to present your idea during Demo Day.
• Access to the Space4Makers for 3 months.
• Individual mentoring meetings,
• Possibility of support within the Incubator of the Gdańsk Science and Technology Park

• Since its establishment in 2015, the institute has successfully graduated over 15,000 students across 9 faculties and brought together a professional community of over 100,000 members.
• Over the past year, the team has been preparing for the expansion by conducting research on the professional community and the online education market in Poland, as well as doing test runs.

Projector will launch its products on October 17 in Warsaw with the first panel discussion among top specialists from Apptension, Tonik, and Doctor.one – in partnership with Google for Startup Campus.

“Ukraine is a member of the European community, which is why we are now expanding the reach of our principles of independent Ukrainian education worldwide starting with our cooperation with Poland. The creative community in Poland, which includes graduates of Projector, serves as an inspiring model for us. We have high hopes of fostering a vibrant and engaged educational community here,”

Oleksandr Tregub, CEO and co-founder of Projector Institute, states.

Projector Institute in Poland

Projector Polskawill follow the same edtech model that the team has been using for nearly 9 years in the Ukrainian market. Polish students will participate in online programs that focus on practical experience and working with real-life case studies.

• Educational programs in Poland will be held in Polish and English, and will be taught by experts and top specialists from the Polish market.
• The first courses and workshops will be launched on the topics of User Experience and Web Design for the beginner and junior levels. Later, content for the middle+ audience will be added to the range of educational programs.

“For the year 2022, we have observed the Ukrainian community’s growing influence in the field of design in Poland. Our specialists have emerged as strong competitors in the market. For us, establishing a presence in Poland presents an exciting opportunity to shape a new wave of Eastern European design and promote the values of accessible education beyond Ukraine,“

Oleksandr Ivanov, COO and co-founder of Projector, explains.

Poland will be Projector’s first entry into the international market. The company aims to expand to multiple European countries, starting in 2024.

In the Startup of the Day column, the team of Codejet shares more details about the startup’s idea, its product, and future plans.

The Startup of the Day column on AIN.Capital is dedicated to tech projects from all sectors that originated from the CEE countries. If you would like to introduce your project, please fill in the questionnaire.

Tell us about your startup. How does it work?

We’re turning designs into production-ready frontend code for web at blazing fast speed without compromising on code-quality. The company is changing front-end development by saving approximately 60% of developers’ time in creating web and mobile applications.

Traditionally, creating an application interface involves CGI designers designing the interface using tools like Figma, and then programmers manually translating those visualizations into code. Codejet offers a game-changing solution by automating this process, eliminating the need for manual code creation and verification. This not only accelerates development but also enhances accuracy and efficiency.

How did you come up with the startup’s idea? What was the reason/motivation behind it?

Patryk Pijanowski, CEO and one of the founders of Codejet, previously ran a software house, which he started building as teenager. While working with clients, he noticed the amount of repetitive tasks in various teams that could be automated. This observation led to the idea of creating Codejet, a platform that automatically converts the design of a mobile or web application into ready and tested code.

How long did it take to reach the prototype or MVP? What did you encounter?

We developed the MVP in just a few months, simultaneously preparing for the launch and a campaign, including on Product Hunt, where we managed to achieve the distinction of “Product of the Day.” Currently, we are continually improving our product – we’ve added the conversion of designs to HTML code (previously, users could only convert to REACT), and we’ve also introduced an official Codejet plugin for Figma.

When exactly did you launch your product? Or when the launch is planned?

The product launch took place at the beginning of July, and since then, we’ve acquired over 10,000 users from around the world, for whom our tool has generated more than 36 million lines of code.

Tell us about the startup’s business model. How do you monetize your product?

Codejet business model is based on a subscription, and users can opt for monthly or annual billing.

What are your target markets and consumers?

Codejet is mainly used by developers (the biggest group of our users), designers, founders, and marketers.

If the startup has already launched the product, what are the results: metrics, income, or any clear indicators that can be evaluated.

In just under three months, Codejet attracted over 10,000 users from various parts of the world, and the tool has already converted more than 36 million lines of code. The quality of Codejet is evidenced by the feedback we collect from all our user types, with as many as 81% rating the code positively. What’s more we have been ranked as product of the day at Product Hunt on the day of launch (not many Polish companies achieved that).

What about your team? How many people are working in the startup? If you’re looking for new employees, indicate whom exactly.

Currently out team cosists of 7 people, but in nearly future we’ll be hiring more experts.

Have you already raised any investments? Provide us with more details on each funding round: the amount, investors, the purpose of the investment.

In July this year Codeje raised about €250,000 (PLN 1.1 million) in a funding round led by Polish Terra Seed fund.

“In upcoming month we hope to close our second round of financing which will help us to expand operations and brand recognition in foreign markets and allow us to introduce the upcoming Codejet Copilot technology to customers.”

What’s next? Tell us about your future plans.

Of course, this is just the beginning of our journey. In the near future, we are focusing on closing another funding round, which we plan to allocate to strengthening our position in international markets and further expanding Codejet’s features, including the ability to automatically generate user interfaces and graphical materials based on simple instructions expressed in natural human language.

With this solution, the involvement of computer designers in the project creation process will be significantly reduced, resulting in both cost savings and a faster project execution.

About the game

Cyberpunk 2077 is one of the most recognizable RPGs of the last decade, made by the Polish studio CD Projekt RED, known for its series of games the Witcher (the popularity of the games, in particular, influenced the release of the series The Witcher from Netflix). Not so long ago, a large DLC for Cyberpunk 2077, called Phantom Liberty, was finally released. Both the game and the add-on received Ukrainian voice acting (unfortunately, this is connected with the case of the developers apologizing to the Russians). According to the data for 2022, more than 20 million copies of the game were sold globally.

What did the Ukrainian team work on

According to Serdiuk, not only Respeecher is mentioned in the credits of the game, but also representatives of the team who worked on the project: Volodymyr Ovsienko, Dmytro Vasylets, Anton Ankudinov, Vitaliy Knyr, and Ihor Kaniuk, and this is a cool precedent.

Due to the terms of cooperation, the team does not disclose the details of the task itself, but it is known that Respeecher specializes in creating AI voices that sound very similar to human ones. For example, in 2022, the startup team worked on recreating the legendary voice of world cinema in its “younger” version: actor James Earl Jones, who voiced Darth Vader, for the series about Obi-Wan Kenobi.

They worked on the project for three months. “In projects of this scale, there is usually a lot of feedback from the customer, while less time is needed to train the AI models themselves, depending, of course, on the input data,”

the CEO of the startup says.

How did they get the client

After six years in the industry, Respeecher has quite a few big names in its client portfolio. Its work has been credited on Disney+, Netflix, HBO, Showtime, Paramount, Audible, and hundreds of other projects, the CEO recalls. The startup also worked on a large game project: the AAA game God of War Ragnarok.

How working with gamedev differs from cinema

According to Serdiuk, the common feature of working with Hollywood and AAA gaming studios is that they require the highest quality of sound and voices. And this work differs primarily in volume: if a movie may require the reproduction of several cues, then a game may involve 60 hours of audio conversions.

Gamedev remains one of Respeecher’s core markets. “Now it’s hard to draw a clear line between a film, a series, a video game — one flows into the other. In the media market, video games and film studios remain our priorities,” says the CEO of the startup.

The team is also currently working on their Respeecher Marketplace product for content creators, as well as launching a new real-time voice and accent change product for the communications market.

AIN.Capital talked to Borys Musielak, Founding Partner at SMOK Ventures, about the ongoing activities of the fund, its nearest plans, and the state of the Polish VC market in 2023.

Tell us about the fund’s activity in 2023: how many active investments were made, have there been exits/write-offs of investments?

SMOK has made 7 new investments so far in 2023, all from our second fund, silently launched early this year. We’ve written off 2 out of 24 companies we invested in via fund 1 since 2019.

Are you currently negotiating new projects or focusing on supporting portfolio companies? Tell us about your plans for the end of the year?

We’re actively investing. We’ve signed two term sheets recently, which should get us to 9 as soon as early October. We’re planning to get to 12 portfolio companies in fund 2 by the end of the year, so generally keep our pace of one investment per month this year and for the years to come.

How does the Polish venture capital market look now? What trends would you highlight?

Less public money on the market means that it’s harder for founders to fundraise in 2023. On the other hand, the funds that are still active, like SMOK, Market One Capital, Inovo, Bitspiration Booster, Simpact or OTB, are all quality funds with proven track records, so once you get their funding, you’re in good hands.

For me not much has changed as the best deals in Poland or CEE are still very competitive, and you need to go the extra mile to be included even in pre-seed financing rounds. 

Has anything changed in the fund’s approach to investing over the past six months — average check, focus, geography. How did the war in Ukraine affect the fund’s activities? 

The war in Ukraine frightened some of the French and German funds, which are less eager to invest in the region now. Nevertheless, that only means better deals and better terms for local funds that are not afraid.

In venture you don’t make money by following the crowd. You make money by being contrarian (and right). My bet is Eastern Europe is where the majority of European unicorns will be born during this decade, and I want SMOK to be the first step of their journeys.

Our average check is still around $250,000 and we invest in CEE and diaspora founders, so no major changes here.

Over the past six months, you have invested in three Ukrainian startups: Finmap, Masthead Data, Workee. Why did you choose these startups? What can you say about working with Ukrainian founders?

Ukrainian founders have a sense of urgency and competitiveness that I haven’t seen elsewhere. They think global from day one, they are not afraid, and they can keep their costs intact — basically key qualities for founders in times of recession. I’m betting big on Ukraine, and I believe some of those investments will be fund returners for SMOK with amazing multiples.

At the beginning of 2023, Ukrainian Oleksandr Yatsenko joined SMOK Ventures’ team. Even last year, you talked about your intentions to hire an investment team in Ukraine. Are you planning to do it? 

We are a small fund. Our whole team now includes 7 people: 3 partners (Diana, Paul and myself), one venture partner (Dan, based in San Francisco), one principal (Sasha, based in Kyiv) and two analysts (Tomasz based in Warsaw and Konrad in Krakow). 

So hiring an “investment team” in Ukraine is a bit of a stretch, but we definitely are looking to increase our presence in Ukraine. We’ll be very active during IT Arena in Lviv later this month, and we’re looking to make more investments in the country over the following years. If you’re a Ukrainian founder, either in the country or in the diaspora, it’s best to reach out to Oleksandr as your first contact at SMOK.

What is the focus for the next investment? What interests you?

What we require from every founder we invest in are passion, knowledge, ability to constantly be learning and not giving up when things don’t initially work out.

At SMOK we’ve funded software startups in a number of industries. We love software development tools (like Authologic, Vue Storefront, Masthead), startups operating in the world of gaming (both game studios like Madcore or Exit Plan Games and tools for gamers like inStreamly or Gitgut). We’ve done a fair share of AI over the years (startups like MX Labs, Bitskout, SLS or Gemelo.ai). But we’re also funded founders who are experts in a variety of industries like hospitality (Smart Hotel), proptech (Propertgage) or VR (ExplodedView). 

In an interview with the editor of AIN.Capital, Robert Grygorowicz, Investment Manager at SpeedUp Venture Capital Group, shares his thoughts about the state of the Polish VC market and the results of SpeedUp’s operations in 2023.

Can you share the results of SpeedUp’s activity in 2023: What is the number of investments made so far? Which startups/scaleups have you invested in?

This far we have invested in 4 new companies (including one unannounced yet) and we’re in the closing of the fifth initial investment this year. In total, these will count for €1.6 million in capital.

Our investments include Swobbee (Germany) manufacturer and operator of battery-swap machines for LEV operators, Bringly (The Netherlands) developing logistic platform for emission-free last-mile delivery companies and Anymove (Germany) targeting rental companies (especially electric fleet owners) with its software platform, integrating all needed stuff for such companies.

We have also participated in €10 million Series A round of our portfolio company Cycle (Germany), following-on our initial seed ticket from Q1 2022.

Were there any successful exits yet?

Two in total, so far this year, one still in the making. One really successful, not announced yet. Closed just a month ago. The investment took almost 8 years and resulted in really good cash on cash (>10x) and IRR. In Q1 2023 we have also liquidated shares in one of the investments from 2021. Just 1,5 years later. Unfortunately, this one was just a liq-pref situation, resulting in 1x return. Fortunately, better than nothing. I wish all the fire sales would bring us a money-back result.

Are there any tangible changes in the Polish VC and startup market in recent
years? What are the most recent trends?

On the capital side, it’s hard to compare recent years as 2023 is a significant change compared to the previous ones. We experience similar trends in round sizes and their number as other European countries. Hence, thanks to the public funding (mostly public-supported funds) the last quarters in Poland resulted in lower decreases than in other developed countries. On the other hand, this is connected to the European budget periods with one finishing its execution by the end of this year. Most of these funds, helping in lowering the downturn in the first half of 2023, could become inactive investors in the next months or even the whole of 2024. Only a few Polish management teams have already announced their new funds, private or invested by the European Investment Fund. I wish it would be better. 

Fortunately, there are other positive, more long-term trends in Polish ecosystems. More and more foreign venture capital investors are investing in companies with Polish roots. I use the term “roots” on purpose because there are usually Series A and later stages, which means that these companies are quite often international or global ones. 

Although, early-stage companies still struggle to attract foreign investors. There are multiple reasons limiting their possibilities to fundraise abroad. Local customers, local network and communication (English) or pitching skills. For multiple companies it’s reasonable to launch on the local market first but there are industries where it’s not, like: marketing, education, and many others. Usually, if the solution is software only — you should try to launch abroad from day one. Even small successes can increase your fundraising chances exponentially.

We also experience a broader quality deal flow from Ukraine, with a lot of talented teams working from Poland. Unfortunately, this is of course due to the war and Russian aggression in their country. Nevertheless, Polish VC funds benefit from a higher number of attractive opportunities.

Does SpeedUp Group experience any effects (temporary or long-lasting) on the market due to the Russian war in Ukraine? And how did you adapt to it?

I can’t say that we experience any major negative effects. Some of our portfolio companies had, e.g. because of energy prices volatility after the beginning of the war. I would say that most of the Polish VC investors rather benefit from the quality deal flow of Ukrainian startups, working in Poland and attracting Polish investors. Also, a lot of IT specialists come from Ukraine or work remotely which also helps portfolio companies in hiring new people. 

In the first year since the war started, we participated in the initiative of Google for Startups, aiming to support Ukrainian startups — the $5 millions Google for Startups Ukrainian Support Fund — with its equity-free grants up to $100,000. We were part of the assessment team, thanks to the cooperation of Huge Thing, which is part of SpeedUp Group, and GFS in previous years.

Furthermore, heard a lot of fears from our LPs in the funds that they would like to move their assets to Western Europe, perceiving it more safe than Poland. I also think this effect, after the first shock, has already stabilized.

Has anything changed in SpeedUp’s approach to investments? Did the average ticket size, focus, or geography change in any way?

Yes, we also need to adapt to market situations. After years of investing from public-supported funds, we’re launching a fully private one. It will be a small fund, just slightly bigger than the last one but without any public LPs. The reason is simple, we want to increase our chances to invest in the best pre-seed and seed companies, and the general quality of our capital. In past years, we couldn’t invest in a bunch of opportunities because of the limitations the public-supported fund has.

We’re now focusing on helping founders in pre-seed and seed rounds. Investing from €100,000 to €500,000 in the CEE teams. We’ve been targeting energytech and cleantech fields. That hasn’t changed. However, right now we invest in people and planet tech which means we are also investing in digital health, edtech, and HRtech.

As we know, the recent investments made by SpeedUp Energy Innovation include Swoobee and Bringly. How did the deals come to pass?

For the past few years, energytech and cleantech solutions have been core areas for our fund. Unfortunately, these fields are significantly more mature in Western Europe than in Poland. That pushed us to actively search for startups in Germany or the Netherlands, extending our geographical focus on the CEE region. 

These particular deals came from our active search through LinkedIn, ranking lists, and other lists of startups. Nevertheless, we have established multiple connections to other investors in the energytech field or startup founders who quite often send us projects to invest in.

In your opinion, what is the best advice you can give to startups or their founders who want to secure financing from SpeedUp Group in the future?

The team is key so take care of building it properly in the first days of your project.

• Find talents that cover different areas of the company’s operations.
• Keep most of the knowledge and expertise inside.
• Share stocks but also engagement fair, keeping all co-founders focused on the startup as their professional number one priority.
• Avoid any advisors or dead equity in the cap table.

With such a clean and comprehensive structure of the team, you will have a higher chance to secure funding not only from us.

In the Startup of the Day column, Jan Molski, the co-founder of Bayoo, shares more details about the startup’s idea, its product, and future plans.

The Startup of the Day column on AIN.Capital is dedicated to tech projects from all sectors that originated from the CEE countries. If you would like to introduce your project, please fill in the questionnaire.

Tell us about your startup. How does it work?

Bayoo is a AI app designed for parents, offering a intuitive solution for crafting entirely personalized stories from a wide array of sources, including photos and text descriptions. It has the ability to curate captivating stories tailored to your unique preferences and needs.

As for now it is available in the Polish language, Bayoo exemplifies a pioneering approach to storytelling, enhancing the user experience for parents seeking imaginative and customized content.

How did you come up with the startup’s idea? What was the reason/motivation behind it?

The inspiration for our startup idea stemmed from a personal experience. Wojtek, one of the founders, has a 7-year-old brother Jaś, who had a daily request for stories about his day before bedtime. This heartfelt motivation to meet his younger sibling’s storytelling needs became the driving force behind the creation of our startup. Recognizing the universal appeal of personalized storytelling, we embarked on a mission to develop a platform that could cater to similar needs for parents and children everywhere.

How long did it take to reach the prototype or MVP? What did you encounter?

The journey from conception to the initial Minimum Viable Product was remarkably swift, taking only a few weeks to develop. Subsequently, we dedicated approximately two months to refining and enhancing the current version of our platform. Throughout this process, we encountered various challenges and opportunities for improvement, including user interface adjustments, feature integration, and performance optimization. These experiences allowed us to iterate and evolve the product to better align with our vision and user expectations.

When exactly did you launch your product? Or when the launch is planned?

Our product was officially launched to the public at the beginning of September. Originally, we had planned for the launch to take place at the beginning of July, but due to various considerations and refinements, the actual launch date was adjusted to ensure a more polished and seamless user experience.

Tell us about the startup’s business model. How do you monetize your product?

Our startup operates on a subscription-based business model. We offer a tiered approach to our services, with both free and premium subscription options:

• Free Users: Users on the free tier have the ability to create up to five stories per month at no cost. This option allows individuals to experience the basic features of Bayoo.
• Bayoo Super: For those seeking an enhanced experience, we offer the “Bayoo Super” subscription. This premium tier enables users to generate up to 100 stories each month, providing greater flexibility and access to advanced features.

By offering a tiered subscription model, we aim to provide value to a wide range of users while also generating revenue to support ongoing development and improvements to the Bayoo platform. We are still figuring out the tiers and pricing so it may change in the future.

What are your target markets and consumers?

Our primary target markets and consumers for Bayoo are:

• Parents: Bayoo is designed to cater to the needs of parents seeking engaging and personalized stories for their children. Whether it’s for bedtime or leisure reading, parents can use our platform to create unique stories based on their child’s interests and experiences.
• Educators: Bayoo can also be a valuable tool for educators, particularly in early childhood education. Teachers can use our platform to create customized educational content that aligns with their curriculum and engages young learners.

If the startup has already launched the product, what are the results: metrics, income, or any clear indicators that can be evaluated.

While it’s still early in your product’s lifecycle, these early indicators are valuable insights into its potential: We are just over a week from soft launch on Linkedin (no paid ads). It’s early but we see some repeating users. As for now we have 300+ stories generated with Bayoo and 30+ registered users – for now just one paid user.

Have you already raised any investments? Provide us with more details on each funding round: the amount, investors, the purpose of the investment.

We did not raise any investments yet.

What’s next? Tell us about your future plans.

We will test now different ways to market Bayoo via TikTok channel and ads and collaborations with non profits and preschools. We are also looking into a potential of collaboration with a publishing house to collectively create a series of AI co-generated stories based on input from kids and parents.

• Solwit is a professional engineering and testing services company founded in 2011 by Leszek Pankiewicz – former CEO of Intel Poland and Wojciech Wasiukiewicz. With over 300 engineers on staff, Solwit has provided reliable software solutions to clients across various industries since its inception.
• The companies did not disclose the exact details of the acquisition. However, as stated by Black Pearls VC, the firm saw a 3.16x return on investment while Solwit’s revenue has increased four times from less than 15 million to 60 million.

“We are incredibly proud to have facilitated our portfolio company Solwit’s acquisition by Alten Group from France. This marks yet another successful exit for us at Black Pearls VC, and a life-changing moment for the visionary founders we had the pleasure of partnering with,”

Marcin P. Kowalik, Managing Partner, Black Pearls VC, comments.

• Alten Group, the buyer, is one of Europe’s leading engineering consulting companies with over 54 000 employees across 30 countries worldwide. The purchase will give the France-based company a more substantial presence in the Polish market.
• Black Pearls VC is one of the Baltic Sea region’s more active venture capital funds. The fund made eleven investments in the previous year, including four follow-on deals. This year, it has already made five more investments, including Swotzy and Traxlo.
• This exit further solidifies the firm’s track record of success, with four fruitful exits in the past two years. 

The study provides insights into the featured companies’ performance, client base, and achievements through a rigorous evaluation procedure. It is a helpful resource for decision-makers looking to engage with reputable organizations in the fintech and blockchain sectors, providing them with the information they need to build effective and strategic partnerships.

Average minimum project price per country

• The average project cost in Ukraine is approximately $24,000, while in Poland it’s only $18,000. All countries are moving within a similar range for the average project, but often countries like the UK or Germany only handle a portion of the project, while the main development takes place in the CEE countries.

Hourly wages

• The hourly rates are very similar, with some variations depending on the country in which the head office is located. However, as shown in the graph, there are some distinctions. The majority of businesses operate in the $20–$100 range.

Service focus by foundation years

• The graph shows that the technological innovation and new technical needs stimulate the formation of new businesses, ultimately contributing to the industry’s growth. The data depicts the number of companies that have been founded over time and are classified based on their concentration on service supply. As a result, the bulk of companies were created between 2014 and 2017, precisely during the global fintech boom.

The correlation between the company size and revenue

• According to the research, the majority of the Top 100 companies by client ranking have workforces ranging from 50 to 249 individuals and revenue of 5-20 million (33 companies) or less than 5 million (28 companies).

Ukraine’s place in the research

According to the latest data from February-March 2023, Ukrainian companies continue to lead the rankings in the fintech and blockchain outsourcing markets based on user ratings. Despite the ongoing full-scale war, Ukrainian software development companies with headquarters in Ukraine maintain excellent quality standards and levels of client satisfaction.

Even in the middle of the war, Ukraine remains the top destination for enterprises seeking technology and development services. Poland is ranked second, with the United Kingdom ranking third.

Methodology

Igor Pertsiya, Managin Partner at Hypra Fund, explained the methodology and the reasons behind the research:

“We are convinced that software development is critical to the success of both startups and established businesses. We share this passion at Hypra Fund and actively invest in software development companies,”

Igor Pertsiya said.

• The report consulted a variety of sources, including company websites, ratings, and specific platforms, such as Clutch.co, GoodFirms.co, ROI4CIO.com, Glassdoor.com, Arcadier API, ZoomInfo.com, Sortlist.com, DesignRush.com, TechImply.com, Growjo.com, RocketReach.co, Apollo.io, Tracxn.com, Pitchbook.com, TopDevelopers.
• Furthermore, over 70% of the participating companies confirmed their data, confirming the report’s trustworthiness. The report explicitly marks the remaining companies whose data remains unverified as “unverified by the company,” inviting them to contact the organizers to rectify their information.
• In addition, the research includes interviews with ten CEOs of significant outsourcing firms, who shed light on their perspectives on the industry’s current situation and the destiny of their particular organizations.

In the Startup of the Day column, Duke Vu, the CEO & co-founder of Fungies.io, shares more details about the startup’s idea, its product, and future plans.

“The Startup of the Day column on AIN.Capital is dedicated to tech projects from all sectors that originated from the CEE countries. If you would like to introduce your project, please fill in the questionnaire.”

Tell us about your startup. How does it work?

As Shopify is to e-commerce, Fungies.io will be to gaming. Given more than 3.22 billion people worldwide play games, the video games market worldwide, with a growth rate of 7.89% between 2023 and 2027, will reach a market volume of $521.6 billion in 2027. Small game studios, lacking dedicated marketing departments and comprising fewer than 10 employees, often resort to self-publishing on platforms such as Steam, Epic Games Store, and GOG.com.

Fungies.io was founded to fix that. It’s a no-code SaaS platform to allow indie gaming studios to set up their own customizable Web Storefront in minutes. The company will create self-publishing commerce tools that allow game developers to effortlessly establish their own Web Shops, enabling direct game sales to players without intermediaries like Steam.

How did you come up with the startup’s idea? What was the reason/motivation behind it?

In 2016, my journey with gaming studios commenced with the establishment of iMeshup.com. During this venture, a noteworthy correlation became evident between game developers/publishers and digital distribution platforms such as Steam.

Building upon this insight, in 2021, I embarked on a new venture, UltiArena.com. This platform serves as an NFT marketplace, empowering game artists to tokenize their creative pieces on the Blockchain.

This led to the birth of Fungies.io. The driving force behind this endeavor was the observation that developers and publishers often found themselves constrained to established distribution platforms like Steam, AppStore, or PlayStore.

The solution was clear – to provide studios with an alternative sales channel, one that they could call their own, through the creation of personalized Web Shops. This approach not only mitigates the dependency on a limited set of platforms but also introduces a novel dimension to the checkout experience.

How long did it take to reach the prototype or MVP? What did you encounter?

In February 2023, we laid the foundation of our first MVP tailored for Web3 games. However, our course shifted swiftly to Web2 gaming in the aftermath. The entire trajectory from conceptualizing our project to its launch spanned a mere six months.

Our initial brainchild aimed to expedite the setup of NFT Marketplaces for any Web3 game. We engineered a whitelabel-as-a-service platform that enables these marketplaces to materialize within minutes, bypassing the need for extensive months-long development cycles and exorbitant financial investments.

It’s crucial to note that we’re not vying directly with Steam; instead, our platform empowers game studios to extract value from their existing web traffic by directly vending Steam keys to players.

Beyond key distribution, our platform also offers an intuitive no-code website builder that facilitates the rapid creation of game-specific websites. Additionally, we assume the role of Merchant of Record for all transactions. This encompasses the management of chargebacks, international tax collection, and filing processes, thereby further streamlining the operational landscape for game studios utilizing our platform.

When exactly did you launch your product? Or when the launch is planned?

Our Web3 platform is currently operational, boasting an active customer base that is already generating revenue. Transitioning from this, we are set to launch the Web2 version by the end of September. This move required a significant overhaul of our infrastructure, given our previous exclusive focus on Web3 gaming.

Tell us about the stratup’s business model. How do you monetize your product?

Operating as a Freemium SaaS enterprise, we incorporate a percentage-based fee from the overall sales volume. The pricing structure hinges on the chosen plan: the PRO plan, offering a spectrum of game keys and distribution choices, carries a monthly fee of $19, while the more comprehensive BUSINESS plan is priced at $99 per month.

In terms of transactional charges, our commission ranges from 5.9% in the Enterprise plan to 7.9% in the Free Plan. Our revenue projection revolves predominantly around the accruing commissions from the sales.

What are your target markets and consumers?

Our sights are now firmly set on the PC Games market – a landscape primarily commanded by distribution giants like Steam, with a smattering of presence on platforms such as Epic Games Store and GOG.com. There are approximately 50,000 game studios and publishers that actively launch games on Steam, not to mention the countless solo developers crafting indie gems for the same platform. This bustling community constitutes the heart of our target demographic.

If the startup has already launched the product, what are the results: metrics, income, or any clear indicators that can be evaluated.

We’re yet to launch the Web2 version of product but we already boast paying customers from Web3 – 11 paying customers. We have also garnered 3000 customers in the database including 1000 studios and developers that have joined our waitlist for Web2 product launch. We have around 30000 monthly visitors.

Have you already raised any investments? Provide us with more details on each funding round: the amount, investors, the purpose of the investment.

Among our investors are Czechfounders.VC, Depo Ventures, Outlier Ventures, CV VC, StartupYard, Tatum, and NectoLabs. They’ve helped us score a $850,000 in a pre-seed round.

What’s next? Tell us about your future plans.

So, what’s our game plan? We’re honing in on crafting the ultimate gaming commerce platform for publishers and developers. We’re not just stopping at a cool website builder – we’re going all out with mobile in-game checkouts, slick payment processing, seamless 3rd party app integrations, and even top-notch analytics and marketing tools. We’re here to supercharge game sales across all devices and channels