PFR Ventures invests in the new Inovo VC fund

Inovo VC has announced the final close of its third fund, at €105m, exceeding the original target of €100m. Private investors, who account for more than €55 million managed by Inovo, have been joined by distinguished institutions, including IFC—a member of the World Bank Group, European Investment Fund, and Poland’s PFR Ventures.

Inovo Fund III will perpetuate Inovo's goal of discovering and fostering exceptional tech start-up creators from CEE and aiding them in capturing global markets. It plans to invest in 20-30 companies, with a single investment ticket spanning from €0.5 million to €4 million, and follow-on investments of up to €10 million. Inovo VC aims to invest in start-ups in the Seed stage but can occasionally join companies in pre-seed and Series A rounds.

Funding for the most ambitious founders in the CEE

The fund will invest in startups all over Central and Eastern Europe, and founders from this region who are building startups anywhere in the world. The team looks for companies with the potential to conquer global markets and grow to $100 million in revenue in just a couple of years. Inovo is a generalist fund, but its investment team is especially capable in areas like healthcare (Inovo invested in Infermedica, Jutro Medical, uPacjenta, and Index Health), developer tools (Spacelift, Archbee), and AI & Machine Learning (Zowie, Pathway, Quantum Boost, AI Clearing), with business models spanning from SaaS-enabled marketplaces, through B2B2C, B2B, to enterprise B2B.

The experience of the team, led by the partners – Tomasz Swieboda, Michał Rokosz and Maciej Małysz – is proven by the performance of the portfolio companies of the first two funds. The Warsaw-based fund has already invested alongside notable funds, like a16z, Google’s Gradient Ventures, Insight Partners, Point Nine, and Tiger Global Management.

Out of 30 portfolio companies of Inovo VC, 6 have already surpassed a valuation of over €100 million: Booksy – a SaaS-enabled marketplace for beauty services, Infermedica – an AI-powered technology for preliminary medical diagnosis and triage, Packhelp – a custom-made packaging producer, Preply – a global language learning marketplace, connecting tutors with students,  Spacelift – a Terraform-compatible CI/CD platform for infra-as-code, and Tidio – live chat, chatbot and mailing solutions for micro-businesses.

Trusted by private and institutional investors
 
Launched almost a decade ago, Inovo’s first fund is already in its exit phase and has already seen a 1.2x Distributed to Paid-In Capital (DPI), with still unrealized investments in its  top performers – Booksy and Restaumatic. The second remains active, but only takes part in the follow-on funding rounds of its existing investments.

Over 65% of capital invested in Inovo Fund III by the private LPs, comes from recurring investors, who have already joined prior funds and express continuous confidence in investment decisions and fund performance. Private investors consist of European family offices and Polish tech entrepreneurs. Including Rafał Brzoska, founder and CEO of logistics company InPost, Marcin Żukowski, co-founder of Snowflake, and Aternus Investment Group owned by the Wałach brothers, founders of the consumer healthcare company Walmark.

Private LPs are joined by institutional investors, who account for 40% of the fund’s AUM. Including IFC, European Investment Fund, and Poland’s PFR Ventures. IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. It has invested €15 million, marking Inovo its first VC investment in Central and Eastern Europe, following over 20 years of investment in private equity funds across the region. IFC will assist the fund in developing and implementing an environmental and social management system in line with its performance standards.

IFC’s strategy for Central and Eastern Europe prioritizes the creation of markets and boosting the competitiveness of the private sector. This investment will help enterprises access much-needed capital, create quality jobs, and drive economic development across the region. Supporting entrepreneurship and increasing access to new technology is key to promoting innovation and unlocking new pathways for sustainable economic growth in Central and Eastern Europe

said Ary Naïm, IFC’s Regional Manager for Central and Southeast Europe.

Supporting innovative businesses at the early stages of their growth is key not only for their own business development, but also for the broader competitiveness of the European economy. Bright ideas today are the tech champions of tomorrow. That’s why the EIF is happy to be partnering with Inovo VC again, backed by resources from the InvestEU programme, to help ambitious entrepreneurs start-up and scale-up their ideas in the CEE region

said Marjut Falkstedt, Chief Executive of the EIF.

Inovo VC is one of the most successful early-stage fund managers in Poland and in the whole CEE region. Over the last years they have managed to build a portfolio of well performing tech companies. They have a unique ability to spot entrepreneurs with the high potential for growth at a very early-stage. They proved they can effectively cooperate with founders, share their know-how and network with them and truly deliver smart-money. They have also managed to build relationships with international funds who co-finance further growth of the best portfolio companies. PFR’s role is to support Polish innovation and the startup ecosystem. That is why we support Inovo VC

says Bartłomiej Samsonowicz, Investment Director at PFR Ventures.  

Over the last 9 years, we’ve seen the remarkable growth of the CEE startup ecosystem. The combined enterprise value of startups in the region has quadrupled in the last five years, totaling €190 billion as of 2022, Inovo LPs and portfolio companies contributed to that number significantly. And while we are in a period of a global funding slowdown, we still see companies in the region that can grow to $100 million in revenue in just a few years. We remain confident that CEE will raise at least ten new unicorns in the upcoming 5 years, and we want Inovo to be a key contributor to this achievement, actively helping the most ambitious founders

said Michał Rokosz, Partner at Inovo VC.

We have managed to become a fund of choice for Polish founders, helping them grow beyond their home market and even their home region. Two third of our portfolio companies managed to raise follow-on rounds with top-tier international VCs. One-fifth of the portfolio companies already surpassed a valuation of over €100 million. We want to help companies from all around our region grow and raise globally and ultimately strengthen the links between CEE and the global VC ecosystem

said Maciej Małysz, Partner at Inovo VC

The balance between institutional and private investors who join Inovo’s newest fund is a clear sign that CEE markets are maturing. On one hand, we have strategic partnerships with IFC, EIF, and PFR Ventures. On the other hand, our private LPs, majority of which return for the second or third time, show that VC in the region is working. But there is even more untapped potential in CEE’s entrepreneurial ecosystem and we are committed to unlocking it

said Tomasz Swieboda, Partner at Inovo VC.