The new Polish fund filling the gap between traditional VC and PE

‘CEE’s tech ecosystem is maturing and there are multiple ways to develop and grow a new business,’ says Maciej Balsewicz, founder of Polish VC firm bValue.

Not all of Central and Eastern Europe’s tech firms will become unicorns, but that doesn’t mean they can’t offer returns for investors.

That’s the message that bValue, a Polish venture capital fund, was keen to get across after announcing bValue Growth, its third fund with target capitalisation of 100 million euros. The bValue team has already raised 72 million euros, from institutions, family offices and private individuals. The fund wants to invest in eight-12 profitable, growing companies from CEE.

The new fund fills the gap between traditional venture capital and private equity offerings. bValue Growth will invest five-15 million euros in a single ticket, for an equity stake of 20-40 per cent. It is focused on growing companies with scalable business models. A target company is EBITDA-positive and has a turnover of no more than 25 million euros.

“Central and Eastern Europe, itself fragmented and consisting of relatively small markets, has seen a rise of mid-size tech companies that are selling their products and services globally,” says Maciej Balsewicz, founding partner at bValue.

“The majority of them will never reach a unicorn status, and therefore don’t appeal to VCs looking for so-called fund makers. However, they have potential to reach size and profitability that will make them attractive to larger private equity funds or strategic investors. This is a huge market niche, where we see a lot of investment opportunities that can generate considerable returns.”

Wanted: Ambitious entrepreneurs

Balsewicz founded bValue six years ago and has been managing it since then, previously working for the leading Polish logistics services provider InPost, global asset manager PineBridge Investments and EY.

Michał Bartosz, who joined bValue as partner in January 2022, has vast experience both as an industry investor, as well as a private equity professional and an advisor. He has worked in Avenga, Grupa Wirtualna Polska, Enterprise Investors and Deloitte. Both partners combine unique operational and investment experience, working for top private equity houses, as well as for rapidly scaling companies backed by PE funds.

“Private equity in Poland and CEE seems to be dominated by buyout funds, which grew on full exits of the first-generation entrepreneurs,” says Bartosz.

“But the market has changed and different needs, requiring different approaches, have emerged. We see vast investment opportunities in SMEs, whose founders don’t seek a complete takeover, but want to further grow their companies to reach higher profitability and valuation within four to five years. Those are exactly the founders we are looking for. Ambitious entrepreneurs aware of the growth potential of their business and aware of the need for outside capital and guidance to achieve it.”

bValue Growth follows the success of two early-stage funds managed by bValue for the last six years, with a combined value of 20 million euros. They have already made 36 investments and exited from 12 companies, including Senuto (acquired by WhitePress/RTB House), Wannabuy (acquired by BenefitSystems), PushPushGo (acquired by Vercom), Callpage (acquired by SaaS Labs), Purella Superfoods (acquired by Bakalland), and Shoplo (acquired by SumUp).

A maturing tech ecosystem

bValue Seed’s active portfolio includes, among others: Tidio – live chat, chatbot and mailing solutions for micro-businesses (raised 25 million euros Series B in 2022), More Growth – a creator of online brands in the areas of parenthood, personal finance and wellness (raised five million euros in a pre-seed round in 2022), – a US-based all-in-one platform that delivers last line of cyber defence for SaaS data (raised 16 million euros in Series B in 2022), Aggero – a marketing platform for brands to manage and engage video gaming influencers (raised four million euros in seed funding), and Your KAYA –  a D2C brand of feminine care products made with safe, organic ingredients.

“We see a growing number of companies that don’t follow the path leading to a billion-dollar valuation but attract strategic investors who acquire them at a price that generates appealing returns for the shareholders,” adds Balsewicz.

“It’s a clear mark that our tech ecosystem is maturing and there are multiple ways to develop and grow a new business. We build bValue Growth on our expertise in both early-stage and private equity investments, to unlock the new path for growing and maturing tech enterprises.”

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