PFR Ventures invests in first VC funds under the FENG program

PFR Ventures has signed its first four agreements with venture capital fund management teams as part of the European Funds for a Modern Economy (FENG) program. The new funds will have a total capitalization of over PLN 250 million. The PFR Ventures’ contribution amounts to approximately PLN 200 million. These funds will be used to invest in innovative Polish startups.

The first venture capital funds to receive capital under the European Funds for a Modern Economy (Polish abbreviation: FENG) program are 24Ventures, Digital Ocean Ventures Starter, Hard2beat, and Tar Heel Capital Pathfinder. All four funds participate in the PFR Starter program, aimed at management teams that want to support innovative companies at the earliest stage of development. The program provides capital for venture capital funds with an investment ticket of up to PLN 5 million (approx. EUR 1.16 million). The funds will invest in companies until the end of 2029, and the divestment period will last additional four years.

*Target capitalization may increase as part of a second closing.

24Ventures is managed by experienced managers previously associated with Satus Starter. It will invest in young companies developing products that address long-term trends such as the digital transformation of businesses, climate, and social changes. The fund plans to invest in 18 globally scalable projects over four years.

Digital Ocean Ventures Starter will finance companies in the FinTech sector and AI-supported digital transformation. The fund was founded by a team previously associated with banking, VC, and technology sectors, with experience in venture building. Their understanding of the financial sector and digital transformation processes allows them to quickly validate start-up ideas and support their scaling.

Hard2beat is a fund created by serial entrepreneurs and technology investors, focusing on early-stage investments in DeepTech companies developing software-based solutions. Hard2beat’s mission is to support ambitious and determined entrepreneurs who understand that building a business is a marathon, not a sprint, and are focused on achieving long-term goals.

Tar Heel Capital Pathfinder invests in globally scalable technology businesses in areas such as AI, SaaS, Marketplace, CleanTech, EdTech, MedTech, and Cybersecurity. In addition to funding, it offers start-ups technological, business, marketing expertise, and access to a network of potential business partners to accelerate their growth and outpace competitors. Its portfolio includes companies like Selmo, Wellbee, Teleradius, and Multilango, and it has exited the company Primetric, which was acquired by the American industry leader BigTime.

In six months, we conducted three calls and received nearly 100 offers from management teams. The first four funds to receive new EU capital are led by people with experience in venture capital investments and developing tech start-ups. Two participated in the first edition of PFR Starter, and two are completely new funds

- comments Maciej Ćwikiewicz, President of the Board at PFR Ventures.

We always set a high bar, albeit adjusted for new teams, with a strong focus on reputational aspects. I’m glad to see significant improvement in the quality of applications in the new edition of programs. We are still analyzing 12 offers from the first three calls

- he adds.

The new funds from the European Funds for a Modern Economy program will support approximately 40 venture capital funds, with public contributions totaling PLN 2.1 billion and an additional PLN 1.1 billion from private investors. This is a continuation of the activities under the Smart Growth Operational Program (Polish: POIR), where PFR Ventures allocated PLN 1.5 billion to venture capital funds, which have financed nearly 400 projects.

PFR Ventures is the largest fund of funds manager in Central and Eastern Europe, providing capital to over 80 VC and PE funds. They support Polish companies at various stages of development, from innovative seed projects to traditional companies already operating internationally. We use both EU funds and our own capital for financing. We plan to increase our involvement in this area and work on further developing the VC and PE market ecosystem in Poland

- says Piotr Matczuk, President of the Management Board at the Polish Development Fund.

The programs funded by FENG are managed by PFR Ventures in partnership with Bank Gospodarstwa Krajowego. Their role is to stimulate different types of investments in start-ups and tech companies. Some focus on providing funding for the earliest projects, while others enable the development of projects in partnership with corporations or business angels.

For companies in the earliest stage, still shaping their business model and before their first commercial sale, funds benefiting from the PFR Starter and PFR Biznest programs are available. The PFR Open Innovation, PFR KOFFI, and PFR CVC programs are designed for funds supporting companies in the growth phase and international expansion, implementing or planning to implement innovative solutions or entering new markets.

Equity instruments are an important part of the European Funds for a Modern Economy 2021-2027 program. Their main goal is to support the creation and development of start-ups. Such early-stage companies are a key element of highly developed economies. If Poland is to become a place of innovation, we must support the creation and growth of tech companies. One of the main barriers to the development of the Polish venture capital market is the limited availability of private capital. The risk of start-up failure is high, so private investors are hesitant to invest in this market segment. Thanks to EU funds, we are able to significantly close this gap

- says Grzegorz Orawiec, Director of the Department of Innovantion and Development Support Programmes.

Innovation is key to ensuring the competitiveness of Polish enterprises. In the current EU perspective, Bank Gospodarstwa Krajowego, in cooperation with PFR Ventures, is implementing equity instruments from the European Funds for a Modern Economy program. Through this form of support, financing will reach innovative companies, giving them a chance to launch, grow, and expand. On the other hand, the involvement of public funds aims to mobilize private entities to invest in innovative projects, which carry higher risk. The European Funds allocated to this project, entrusted to BGK and PFR Ventures, amount to approximately 2 billion PLN. We hope that some of the supported companies will succeed not only in Poland but also in European and global markets

- says Paweł Chorąży, Managing Director of the European Funds Division at BGK.