About Smartbill

• SmartBill was co-founded in 2006 by Ioana and Radu Hasan and Mircea Căpățînă. The company launched its solution in 2011 and released its first cloud invoicing product in 2014. In February 2016, SmartBill raised a €1.1 million funding round led by Catalyst Romania and together with Gecad Ventures. According to the company’s data, SmartBill has experienced nearly 20-fold growth since Catalyst’s initial investment, with annual revenue increases ranging from 30% to 60%.
• Since March 2024, more than 6.5 million documents have been issued via the platform every month. For 2024, the company estimates a 60% increase in turnover and expects to exceed the threshold of 150,000 customers.

The deal details

• Catalyst Romania is a fund manager that launched the first private equity and venture capital fund dedicated to Romania in 2012, funded through JEREMIE. The fund focuses on Technology & Internet, Media & Communications, and Technology Services investments.
• In recent years, it has invested more than €12 million in 10 Romanian technology companies, such as Vola.ro, AvocatNet.ro, 123FormBuilder, Simartis, SmartDreamers, OmniConvert, SeedBlink, evoMAG, and ESX.

The journey of growth with Catalyst as an investor and partner has been remarkable, witnessing a tenfold expansion over the span of eight years. Marius’s invaluable advice played a pivotal role during crucial junctures in the business, contributing significantly to our success. It’s partnerships like these that shape the trajectory of a company, and we’re grateful for the support and guidance provided by Catalyst and Marius throughout this journey,

Radu Hasan, CEO and co-founder of Smartbill, said.

In 2020, Visma acquired more than 50% of Smartbill to accelerate its growth rate and the development of the SmartBill ecosystem. Now, Catalyst Romania has sold the remaining shares for an undisclosed amount of the deal.

• Founded in 2020 by Yaron Raz and Asher Hazanchuk, Neuronix AI Labs offers a solution that focuses on lowering computer vision AI cost and power consumption. Based in Sunnyvale, California, the company aims to reduce costs in sectors such as semiconductors, security technologies, and smart cities.
• According to the company, it enables the increase of hardware computing capacity to keep up with advancements in artificial intelligence. Currently, Neuronix boasts several patents and over two decades of industry experience among its team members.

• Initially, it was discovered by Depo Ventures and later nurtured to success with the strategic partnership of Tensor Ventures. Apart from the funds, Neuronix AI previously attracted investments from Frontures and Alchemist Accelerator.

Our involvement began when Yaron approached me as a mentor during the winter cohort of the Alchemist Accelerator in 2021. I immediately knew we had to seize the opportunity to invest. Despite being perceived as ‘too deep tech’ by many Silicon Valley funds at the time, I reached out to Tensor Ventures to join us. This American-Israeli-Czech collaboration has been instrumental in the startup’s journey, playing a strategic role in the success of Yaron and his team. It proves that investments in cutting-edge technology are worthwhile. I thank Yaron and Asher for their dedication and hard work, and wish them continued success under the umbrella of Microchip Technology,

Michal Ciffra from Depo Ventures commented.

• The exact amount of the deal was left undisclosed. The buyer, Microchip Technology, the leading semiconductor supplier of smart, connected and secure embedded control solutions, has a market cap of around $46 billion.

The sale of our stake in Neuronix is quite extraordinary given the fiercely competitive market in Israel. The success of this transaction is closely tied to the direct involvement of Tensor Ventures in the M&A process, and our extensive experience in the semiconductor industry, particularly insights from Intel,

Petr Ulvr, co-founder of Tensor Ventures, commented.

The transaction marks the second exit in Tensor Ventures’ portfolio, which held the largest share in the startup.

• With the acquisition, Zendesk complements its own service offering with Ultimate’s leading AI solutions for customer experience and support, which, among other things, enhance customer experience and improve the efficiency of customer service.

Ultimate transitions to ownership where strategic synergies are realized excellently, and the company’s work is valued. It is great to see how one example of Finnish expertise in AI enters the global market supported by bigger companies. We wish both parties success in the future,

Juha Lehtola, Director of Tesi’s Venture Capital team, on the exit.

• In January this year, Zendesk has made an acquisition in the Estonian market, with the AI startup Klaus enabling Zendesk to deliver consistent service across every channel.

• Luigi’s Box is a leading Slovak technological company that provides e-retailers with intelligent product search and recommendation. Their solution also helps companies understand how to use customer purchasing behavior data in order to increase sales.

• The company was co-founded in 2014 by Gejza Nagy (CEO), Tomas Kramar (CTO), and Michal Barla (CPO). Their technology is used by more than 3,500 e-commerce sites, their biggest clients include Alza, Acer, Benu, Electro World, Kosik.cz, Telefónica O2, and Under Armour.

“This opportunity has come at the right time in the evolution of Luigi’s Box. We’ve been working with Persoo on the acquisition for several months. We have a similar company culture, product, and vision for the future of e-commerce. We’re excited to have the Persoo team join us, bringing additional industry expertise and strengthening our position in Europe as we work towards new goals together. On the client side, the transition will be as seamless as possible. We’re confident that clients of both Persoo and Luigi’s Box will benefit from us joining forces, as they will now get an even better product,”

Gejza Nagy, co-founder and CEO of Luigi’s Box, commented.

About the deal

• The exact amount of the deal is undisclosed. However, the approximate amount is several millions euro.
• The deal also marks the first full exit for the Czech VC fund Presto Ventures, as well as another successful exit for Lighthouse Ventures.

“We backed Persoo in 2019. Since then, the company has undergone many changes and developments that have propelled it forward – in terms of product, as well as the start of a successful foreign expansion. We’re happy to have played a part in their growth and believe that together with Luigi’s Box they will carry on this momentum across Europe,”

Roman Nováček, partner of Presto Ventures, commented on the acquisition.

• After the acquisition, Persoo will be fully incorporated into Luigi’s Box.

• 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).

• 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.

Now skillsetter is a separate company that will be developed and managed by one of the best edtech players.

• Yakupov did not disclose the deal details of the exit, because of the NDA. Earlier, the company secured $262,000 in investments.

• Skillsetter project was launched in 2020. After the full-scale war against Ukraine started, the company began to have problems. As Yakupov told AIN.Capital, the team had to be reduced, and he even thought to close the company. However, the project was saved after reviewing almost all stages of its work.

“I will be frank. For me, this experience was as Elon said in an interview: like chewing glass while looking into the abyss.”

• 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. 

• Since starting in 2016, Energia Futura has installed more than 2500 solar plants for private homes and businesses.
• In 2022, the company’s sales grew by 3,7 times to €6,6 million compared to the previous year, and profit before taxes comprised €0,55 million.
• Business Angels Fund joined the company in 2020 when Energia Futura was raising a €300,000 seed funding round.
• Since then, the number of employees increased from 20 to 72 and taxes paid to the budget reached €5,1 million.

“We very much appreciate the Business angel, who joined us in the deal and honestly shared his expertise with the founders. We are very proud of our partner Nerijus Baliunas for the successful lead of this deal! The company was a startup at the time of investment, while now it is attractive for more conservative investors already!”

Business Angels Fund

Business Angels Fund is a venture capital firm which invests in startups, early-stage companies, and small-medium enterprises in the Baltic region, Poland, and greater CEE. BAF manages two VC funds (BAF I and BAF II; the investment size varies between €50,000 and €600,000. Recently, the fund invested in Lithuanian fintech Spenfi during €800,000 seed round.

• Affle International is a mobile marketing platform division of Affle India.
• The company is buying 100% of YouAppi for $35.44 million, which it will pay immediately, and another $9.56 million — one year after the deal closes.

“We see a lot of potential for synergy with YouAppi’s unique mobile advertising platform. We intend to strengthen YouAppi as a user platform business, it also fits well with our CPCU model for both iOS and Android,”

the company said.

• The YouAppi service was founded in 2011. Its technology is based on proprietary algorithms and allows attracting mobile users with expected Lifetime Value (LTV). YouAppi analyzes the features of the user’s interaction with other mobile applications according to 25 different factors and thus suggests business solutions for attracting users.
• In 2017, Digital Future sold part of its share in the project to a Chinese investor.
• Digital Future was one of YouAppi’s B-round investors in February 2016, along with Glilot Capital Partners, Click Ventures, Altair Capital, 2B Angels, Flint Capital, and others. The total amount of the round at the time was $13.1 million. Digital Future’s share was not disclosed at the time, but it was one of the company’s largest investments.

• Black Pearls VC is a Gdańsk-based fund with a focus on deeptech startups working across various sectors within globally-relevant markets. It has a successful track record of investments in areas such as digital health, enterprise software, fintech, and others.
• The fund invests during seed to Series A rounds, with an average tickets ranging from €100,000 to €1 million. Its most recent investments include a €1 million seed round for Surveily and a €8.5 million round for Autenti.
• Nomi Biotech Corporation is a Polish-Japanese biotechnology company. It specializes in selecting, researching, and manufacturing proprietary and clinically potent nutraceutical formulations. Possibly, the solution can achieve certain physiological benefits.
• Thanks to the fund’s support, Nomi Biotech was able to carry out the R&D process, commercialize its products, and generate substantial revenue. The company also announced a closing of its pre-A investment round with an unnamed, private chemicals industry player.

Black Pearls VC is included in our Top 25 most active Polish VC funds 2022 ranking. You can read about it here, under the 19th place.

• Vochi has developed the Vochi Video Effects app, which allows the users to apply various effects to individual objects in a video.
• The parties have not disclosed the financial terms of the deal. However, it is known that the founders and the team will continue working on the project. And the Vochi app will continue to be available as a standalone app.
• Pinterest says that the deal will help them build more innovative creator tools for dynamic videos.
• In May 2020, Flyer One Ventures led the startup’s $1.5 million seed round.
• In July 2021, Viktoriya Tigipko’s fund, TA Ventures, invested in the company. Both funds exited after the Pinterest deal.
• After the last round, the startup reported more than 500,000 monthly active users and $4 million in annual revenue.

Eyeota acquisition means the second exit in a week for the Ukrainian VC firm TA Venture, as said by its Founder and Managing Partner, Viktoriya Tigipko. The deal was announced on the 4th of November, soon after TA Ventures exited British Fintech startup Finimize.

About Eyeota

Eyeota was founded in 2010 with a mission to create a sustainable, interoperable, and globally available data solution that supports a privacy-first world of digital marketing and advertising. The company provides a methodology that onboards offline and online data in a privacy-complaint and globally consistent way without the use of personally identifiable information (PII). In that way, Eyota helps brands to get digital insights in order to communicate more effectively with their customers and prospective customers.

Acquisitions will bolster the power of the Dun & Bradstreet D-U-N-S Number to make it easier for marketers to combine offline and online data to enable personalized B2B marketing and activation around the world.

“The acquisition by Dun & Bradstreet is driven by Eyeota’s ability to provide access to global, privacy-conscious B2B and B2C audience data solutions through a valuable worldwide ecosystem of digital activation, data management, and social platforms. By joining forces with Dun & Bradstreet and NetWise, we are able to execute on our shared visions to help revenue-generating teams get out of the business of wrangling data and technology and get back to engaging with their customers and prospects to drive growth for their companies. The combined entities’ technology and trusted data will provide peace of mind to marketers, enabling them to target B2B customers and prospects with confidence and create holistic targetable audiences enriched with consumer signals to drive better engagement across every major marketing channel or platform,” said Kristina Prokop, CEO & Co-Founder of Eyeola.

All exits were profitable, with returns up to x25. After the successful exits, Digital Future restarted its startup search and evaluation and is ready for new investments into promising projects.

“I see here an important signal to the Ukrainian ecosystem. Usually, you have a rare chance to exit an investment with profit. You can wait for a positive exit for 13 years on average. I want to make an example from our fond to show Ukrainian startups and the whole community that they can make money here. Moreover, such exits make our country more attractive to foreign investors,” noticed Oleksii Vitchenko, the founder of Digital Future.

• The share at Preply was sold to its new investors. After the investment in 2016, Preply became the tutorial giant that increased its volume from tens of thousands of hours a month to tens of thousands of hours a day. Preply successfully closed the $35 million Series B round in 2021 and multiplied its income during the pandemic.
• Attendify became a respected solution for developing mobile apps for large events with big clients like Google, PepsiCo, and Harvard University. The pandemic influenced Attendify to adapt to the online event industry. In 2021, Attendify was acquired by Hopin, one of the online event market leaders and one of the fastest-growing companies ever.
• SOC Prime built the world’s largest cyber threat detection marketplace where the experts give their “prescriptions” to detect threats automatically, and clients get updates for their systems. The startup describes its Detection-as-Code marketplace as “Spotify for cyber threats.” In October 2021, SOC Prime secured $11 million from Streamlined Ventures and Rembrandt Venture Partners.
• Digital Future partially exited Rallyware; their partnership increasingly grows in the enterprise digital transformation. Rallyware is a performance enablement platform that analyzes real-time performance data of all employees and discovers their skill gaps. Based on the data, Rallyware automatically develops personal training and practical programs for every single employee. It results in a 32% increase in their performance on average. Among its clients are Samsung, Avon, Tupperware, Vonage, NuSkin, and many others. In October 2021, Rallyware raised $22 million from PeakSpan Capital.

About Digital Future

Digital Future is a Ukrainian venture capital firm that invests in seed and early-stage companies. The main criteria for investments are a scalable business model in the US and EU markets, a team, and global ambitions. The firm was launched in 2014, and so far, it has over 30 companies and seven exits in its portfolio, with average deal amounts ranging from $50,000 to $350,000.

• The investments: BeLive, Let’s Enhance, Petcube, PromoRepublic, Reply.io, Salo, Serpstat, SignaLayer, Softcube, SplitMetrics, YouAppi, YouTeam. 
• The exits: Mobify (Jeapie), Friendlydata, Coureon, Preply, Attendify, SOC Prime, and Rallyware.

Back story

Jeapie is a Ukrainian startup, which worked on the service of mobile push notifications: we told its detailed story earlier. In November 2014, the startup raised $50,000 from the investment company Digital Future.

In November 2015, the startup was acquired by a Canadian company Mobify, which provides mobile e-commerce solutions for retailers in North America, the UK, Japan, and other countries.

According to Digital Future, at the time of the acquisition, the investment company received a return in Mobify shares (which is not a complete exit).

Exit in 2020

On October 1, 2020, Salesforce officially closed the acquisition of Mobify. The latter will provide Salesforce Commerce Cloud with a modern storefront solution that will allow brands to customize their commerce experiences faster and more frequently and deliver an enhanced shopping experience across any channel.

This time Digital Future will exit the deal after receiving the money: SalesForce will pay for Mobify shares to the investment company. Thus, Digital Future will make the final exit from the startup, in which it invested back in late 2014.

According to Oleksii Vitchenko, founder of Digital Future, thanks to the sale of the Jeapie startup to Mobify, his company received its first shares only a year after the beginning of investment activity.

The parties have not disclosed the terms of the deal.

How did the deal happen, and why? Where you and your partner approached, or did you find the buyer yourselves? How long did it take to prepare? Why did you decide to sell the company?

There were many factors combined together. Selling the company was not our goal, so at the beginning we were not interested. However, in the course of the negotiations, we saw that there was a certain culture fit and that they really needed us and valued us as a team with an expertise, not only as a piece of code.

For another thing, we were also affected by COVID-19 and the associated crisis. Many investors with whom we had negotiations on round B, however close to completing the deal, said that until the market stabilized, they would not be ready to invest. Our sales stopped growing. As we had expected, prospective clients implemented a spending freeze.

It was the combination of these factors that pushed us to the decision that merging with a player like Quadient would benefit both the product and the team. We would be able to scale up sales, and indeed, having the resources would help us realize product ideas that we could not get around to.

Actually, it turned out to be an awesome deal between companies sharing each other’s values and vision.

Will the team in Ukraine stay? Will you expand the staff?

The team remains in full, and yes, this was one of my main criteria. We are planning quite a serious expansion. So, we would be happy to see good people join. We have job openings for a recruiter, Java programmers, DevOps engineers, QA, data scientists, and other professionals (please write to jobs@yaypay.com).

Will YayPay remain an independent company? The main perk is that now, having access to Quadient’s resources, you can grow much faster, isn’t it?

Now that we belong to Quadient, we cannot remain independent. However, in terms of operational activities, we will have the same team and the same chain of responsibility as before. 

YayPay has been added as a key strategic piece to Quadient’s portfolio and now we have the opportunity to offer our platform on top of Quadient’s mail solutions to their large customer base. 

You are still minority shareholders, is it correct? Why didn’t the company buy out all 100%? So that you have an incentive to stay and work towards the goal?

Yes, this is correct. We are interested in benefiting from the results of the company growth in the future, and this is the way to achieve it. 

So, you have kept a share in YayPay, but not in Quadient, right? You haven’t received shares in the buying company, have you?

We came out to have a share in a newly formed company belonging to Quadient and now owning YayPay, but not in Quadient itself. They are a public company, so anyone willing to buy their shares can do so on the market.

Did you receive cash after your exit? Are you planning to buy a house in Italy?

We will receive the main payments upon reaching certain metrics, so we still have to work to afford a decent cottage in Italy.

It’s funny, actually: the first article that was published on AIN.UA after the deal (as well as the press release) said that the deal was “entirely in cash.” Of course, entrepreneurs got it at once that this just meant the deal did not involve any transfer of a share in Quadient. But some people decided that we were nearly getting suitcases full of money. I wish it worked that way 🙂

Did all the investment funds that had invested in the company exit the project, with their shares bought out?

Yes.

How did the investors react to the deal?

All the investors were able at least to return their investment, and some of them made a profit. Considering the alternatives and the state of the global economy, most of them were happy with the deal.

Do you have KPIs that you need to achieve, based on Quadient’s capabilities?

Yes, and these are essentially standard SaaS metrics: ARR, Churn, etc.

It can happen that after a successful exit, entrepreneurs become investors: there is no intention to make a new product, but there is money – and a desire to put it to work. What about you? Will you invest or keep putting all the effort into YayPay? Or maybe you have ideas for a new startup?

For the observable future I’m with YayPay/Quadient, and this is my single focus. The owner may be different, but a desire to bring this product and this team to ever greater heights is still there. There’s a chance I will come back to entrepreneurship later, but right now there are many great ideas, which I hope to implement with Quadient.

• According to Andriy Dovzhenko, SMRK Managing Partner, for the first time, the firm invested in Preply in 2015.
• In 2017, the Ukrainian startup Preply sold its stake for $4 million. The lead investor was Point Nine Capital, a Berlin-based venture capital firm. Among the others was the Ukrainian SMRK VC Fund.
• In 2020, Preply closed a $10 million round, the total amount of funds raised amounted to $15 million. The founders did not disclose the valuation of the startup at the time, but according to Andriy Dovzhenko, SMRK’s exit was based on that valuation.
• Polish INOVO acquired SMRK’s stake. Moreover, it also invested directly in Preply. The amount of the deal was not disclosed.
• According to Dovzhenko, the exit multiple is 3.2x, and he said it is “a good result.”

“Preply is doing well now, and we’ve decided to make the profit. SMRK VC Fund continues to invest actively in startups at an early stage, and we need funds, so we managed to get them through the good exits,” Dovzhenko explained the reason for leaving Preply.

Andriy Dovzhenko, SMRK

In 2019, SMRK had already made a partial exit. In 2019, SMRK had already made a partial exit. In March 2019, Horizon Capital invested $10 million in Ajax Systems by partially acquiring SMRK’s stake. The firm invested $1 million in the Ukrainian manufacturer of security systems back in 2015 and remained the only investor until Horizon Capital came. Then Dovzhenko said that “the firm has a very successful exit from the partial sale of previously bought shares, and the long-term goal is to bring Ajax Systems to the IPO.”

The price

When asked by AIN.UA editor how much the company hopes to get from the sale of Menu.ua, Kerobyan did not answer.

According to AIN.UA sources, Menu Group did offer this asset to several potential buyers for $500,000-$700,000. However, so far, no agreements have been reached with any of them.

Previously, in an interview with Retailers, Kerobyan said that Menu Group was negotiating the sale of Menu.ua with 3-4 Ukrainian companies, including a large chain of supermarkets.

However, according to sources of AIN.UA, the company will hardly have time to sell the service before June 8, as none of the potential buyers has shown any interest in the acquisition of the above asset. Therefore, the option of closing the business is more probable.

According to one of the sources in the market, the price of half a million dollars is unreasonably high. “There’s no point in buying the database and the application. The first one can be obtained through aggressive marketing, while the second one can be developed in 1-2 months,” said the source of AIN.UA. He also says that Fozzy Group (Silpo) should not be considered as a potential buyer since the company has its own quite successful delivery.

What are the achievements of the service

The service has been operating in Ukraine for just under a year. According to its owners’ estimates, Menu.ua has covered 1% of the market.

During that time, Menu.ua has attracted 200 partners in Kyiv and Dnipro, including KFC, a fast-food restaurant chain. However, some of them broke up the cooperation, as Menu.ua has not made payments on orders for several months. The total amount of debt is $220,000.

Menu.ua has its application and aggregator Eda.ua, which works in 25 cities in Ukraine. The total number of employees is about 50 people. Now the fate of the Ukrainian team looks vague.

“We hope that most people will keep their jobs if the company is successfully sold. Otherwise, to our great regret, they will have to search for a new job,” said Vahan Kerobyan, the founder and CEO of Menu Group.

Why didn’t Menu.ua succeed?

Menu Group is developing a similar service in Armenia and Belarus. Moreover, according to Karobyan, there was a significant growth during the quarantine period – by 50% in February and March. But Ukraine has remained unprofitable all the time. The founder blames not the competitors – Glovo, Uber Eats (closed on June 3), or Raketa – but the lack of funds.

“Our business is very capital intensive. To succeed, we need big investments, even in the non-competitive market.

We could not ensure the required investments for our Ukrainian subsidiary. And after the beginning of the pandemic, it became clear that we will not be able to attract investments quickly,” he explained to AIN.UA.”

The company planned to attract $15 million of investments before the quarantine and invest most of them in the development of the Ukrainian market. However, the deal did not take place due to the crisis.

Besides the Ukrainian service, Menu Group also closes the food delivery service in Georgia. There are curfew restrictions in the country due to the pandemic, and the restaurants cannot work for delivery there. In the future, the company intends to focus on markets where its services are profitable, thus getting rid of reliance on external investments.

About Menu.ua

Armenian company Menu Group entered the Ukrainian market in July 2019 through the acquisition of aggregator Eda.ua. The delivery service based on it was launched in Kyiv in October with the brand name Menu.ua. At the end of February 2020, it was scaled up and started operating in Dnipro with free delivery.

Last summer, the founder and CEO of Menu Group Vahan Kerobyan estimated the Ukrainian market of food delivery at ₴10-15 billion with annual growth by 20-25%. Soon after the acquisition of Eda.ua, he announced his intention to invest ₴100 million in Menu.ua.

According to Karobyan, his company acquired the aggregator Eda.ua for $1 million by exchanging shares. After that, more than $1.5 million was invested in the development of services in Ukraine. This amount includes debt repayment costs that Eda.ua had.

Plans have changed

Several partners of Menu.ua reported to Retailers that the service had not paid money for orders for a couple of months. Journalists of the media contacted Kerobyan for comments.

It turned out that the board of directors of Menu Group decided to stop investing in Ukraine, and they are considering two options for further developments now: closing the company or selling it. The final decision on this issue will be made on June 8.

Kerobyan also says that debts to partners of $220,000 will be paid within a few months.

Coronavirus has changed everything

According to Kerobyan, currently, Menu.ua covers less than 1% of the food delivery market, while over 50% is in service of restaurants with delivery.

Nevertheless, the company did not plan to leave Ukraine before the quarantine. Menu Group was preparing to attract $15 million of investments and direct most of them to the development of service in Ukraine, in particular, the opening of dark stores that work only for delivery.

“When the situation with coronavirus happened, we realized that we do not have the necessary resources for further development in Ukraine,” said Kerobyan in a blitz interview with Retailers.

According to him, during the quarantine period, Menu.ua had slight growth. Nevertheless, the company was unprofitable. They had to invest more than $100,000 in the service every month. He also says that the Menu Group will leave Ukraine with losses.

“We do not see profitability in Ukraine in the near future. Maybe this is due to the fact that we do not know this market well,” he added.

What will happen to Menu.ua

If there is a buyer before June 8, the service will be sold. Otherwise, Menu.ua will just close.

According to Kerobyan, 3-4 companies in Ukraine have expressed interest in the acquisition of the service.

“I cannot disclose the names, but one of the potential buyers is one of the largest supermarket chains in Ukraine. If the deal goes through, there will be a third quite strong player in the segment of food delivery in Ukraine,” he said.

CoreValue develops software for pharmaceutical, health care and finance companies. The company has eight offices in Ukraine: in Kyiv, Lviv, Cherkasy, Poltava, Khmelnytskyi, Ivano-Frankivsk, Lutsk and Vinnytsia. There is also a representative office in Wroclaw. Today, the company employs over 400 people.

“We are excited about the opportunity to join our forces with IT Kontrakt and to become a part of the success story in the CEE region. CoreValue fully supports the growth strategy of IT Kontakt and will work in close cooperation with its management,” said Igor Kruglyak, CEO and co-founder of CoreValue.

“CoreValue has doubled the business over the past few years, and its SalesForce practice has grown even faster. The company has become a good option for a buyer with global ambitions, such as IT Kontrakt, and we welcome this deal,” said Yevgen Sysoev, managing partner at AVentures Capital, who served on the company’s board of directors before the deal took place.

Let us recall, AVentures Capital bought a minority stake in CoreValue exactly a year ago. The parties did not disclose the amount of the transaction. Back then, Kolodyuk noted that the fund expects to earn on the share in CoreValue, as the company quickly increased its earnings. In addition to AVentures Capital, the outsourcer has another investor – Insoft Capital.