Polish VC market: Q3'21 summary — we’re on a roll!
Fasten your seatbelts. Here it is — the quarterly recap of the Polish VC market.
In Q3’21 we jointly invested EUR 127M (PLN 582M) in Polish startups — based on the research we’ve done with PFR Ventures. This is a similar amount to the EUR 139M (PLN 635M) invested in Q2’21 (outliers not included).
It turned out that my recent prediction of this year ending “with another record” is already a fact. In the three quarters of 2021 the value of transactions — excluding megarounds — amounted to EUR 319.5M (PLN 1.460M), while in 2020 it was EUR 268.7M (PLN 1.228M). Considering that we are now only summarizing the third quarter, I would say this is terrific news. Kudos to all the amazing founders, their teams and investors who made all of this possible.
High numbers at an early stage
This year we’re seeing more pre-seed / seed rounds than ever before. The quarterly average is 95, which is approx. 37% more than last year (69.5) and approx. 50% more than two years ago (63.25).
One of the top rounds and the largest seed was the one raised by our portfolio company — Jutro Medical (see Top 10 rounds below). At the end of 2020, the company raised a EUR 1.4M (PLN 6.2M) pre-seed round and just a few months later, in July this year Jutro Medical raised a seed round of EUR 5.9M (PLN 27M). It’s special to us as we had the pleasure to be the lead investor and Jutro is our largest investment to date — my Partner, Michal Rokosz, wrote more about it here.
EUR 5.9M (PLN 27M) at the seed stage is still considered to be very high in Poland. However, for the second quarter in a row we’re seeing that the numbers in the market overall are at higher levels than they were before (at least since the beginning of 2020). The average round size in Q3’21 and Q2’21 was above EUR 1.2M (PLN 5M), while in Q1’21 it was half that amount — EUR 0.6M (PLN 2.6M).
The average seed is now at EUR 0.5M (PLN 2.2M) and the average Series A is at EUR 4M (PLN 18.4M).
I’m also very happy to see the increase in the number of Series A rounds. This year it was on average 10 each quarter, which is 64% more than in 2020 (6.5) and over 2.5x more than in 2019 (3).
The numbers show that the Polish startup ecosystem is becoming more and more mature. Entrepreneurs are not afraid to set up new companies, but they are also leading their successful growth.
Top 10 rounds in Q3 2021
Money knows no borders
Access to capital is no longer a problem. Top founders are easily raising both from Polish and foreign VCs. Way to go!
In Q3’21 international VCs participated in only 8 rounds in Polish companies, but this amounted to 29% in terms of value.
The fact that capital knows no borders is also reflected in the investments of Polish VCs in foreign companies. In Q3, we saw 10 such transactions. In three quarters of this year, Polish teams invested in 31% more foreign companies than in all of 2020. We also recorded a significant increase in the value of transactions, at the level of 2.8x.
Among them (similar to last year) there were two investments from the Inovo portfolio — Archbee (Romania) and AhoyConnect (Czech Republic). More coming soon.
If the current trend continues, Poland will close 2021 with 50 such investments, which will be approx. 70% more than the year before (29).
Poland on the CEE map
The biggest event last quarter in the CEE region was the megaround raised by Bolt, which increased the company’s valuation to more than EUR 4B. The Estonian mobility company raised EUR 600M from Sequoia, Tekne, Ghisallo, G Squared, D1 Capital, and Naya. EUR 600M is more than the four largest CEE rounds last quarter combined: Vinted (EUR 250M), Rohlik (EUR 100M), Productboard (USD 72M) and Veriff (USD 69M).
Although Bolt stole the show, the overall country performance shouldn’t escape your attention. Poland has clearly moved to the leading position in the CEE region. EUR 127M (PLN 582M) invested in Q3'21 is more than was invested in all other CEE countries at that time. Even though Bolt-sized megarounds are still ahead of us, as a country we are definitely growing in strength.
Q3 was a strong quarter, but Q4 looks even more promising. Many of the top Polish tech companies, including some from our portfolio, are getting ready to announce big rounds before the year’s end. When this happens and the “first unicorn” gets confirmed, we’ll have even more reasons to celebrate.
Methodology: how did we collect data
We conducted this research in collaboration with PFR Ventures. We sourced our information from aggregators such as Crunchbase, MamStartup, Pitchbook, and Dealroom.
What qualifies the transaction as “Polish”?
1. At least 1 of the co-founders is from Poland.
2. There is a Polish office with full-time employees on the ground.
3. The company is funded by a Polish VC.
4. The company recognizes Poland in its materials (website, press releases).
Inovo Venture Partners is a first-choice VC for ambitious founders from Poland and the CEE region. We back early-stage, post-traction startups with up to €3M of initial investment, and help them build global brands while driving growth of the local startup ecosystem. We take great pride in being close to top founders who think big. We’re investors in: Booksy, Restaumatic, Sotrender, Infermedica, Spacelift, Tidio, AI Clearing, Zowie, Jutro Medical, Intiaro, Packhelp, Preply, Eyerim, Allset, SunRoof, Archbee and AhoyConnect. Our second fund reached a total of €54M.
For more information visit: inovo.vc
