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Recently, PFR Ventures, together with Inovo Venture Partners, has published a quarterly report summarising transactions on the Polish venture capital (VC) market. Here’re the 8 important takeaways: 

#1 €53M invested in Q1 2021

As per the report, around 65 funds have been invested in 93 companies. In Q1 2021, around €53M was invested in innovative domestic companies from both, Polish and foreign funds. 

#2 Value of investments dropped

The report says that the value of investments dropped by merely 2.5 per cent compared to Q1 2020, while the number of investment rounds increased by 40.3 per cent YoY.

#3 Source of capital

46 per cent of the financing was public-private capital, and the share of international funds in the total value of transactions was 35 per cent. 

At the same time, 73 out of 94 transactions were based on public-private capital. Polish venture capital funds participated in 84 financing rounds.

#4 PFR Ventures investment increased

As per the report, PFR Ventures witnessed a record quarterly number of investments – 32 in 2021, compared to 18 in Q1 2020.

Aleksander Mokrzycki, vice president at PFR Ventures, says,“We recorded nearly 100 transactions in the first quarter of 2021. Looking at the historical data, this is a good opening of the new year. The value of capital delivered, compared to the same period in 2020, remained at the same level.”

#5 Largest share of Pre-Seed and Seed rounds

The last quarter (Q1 2021) brought the largest share of Pre-Seed and Seed rounds in almost two years – about 93 per cent of all transactions, says the report. There were about 60 per cent more early rounds than in Q1’20.

“What a few years ago was seen as an investment in Series A, today will often be classified as Seed. The market is changing and will probably continue to move in this direction,” says Maciej Małysz, Partner, Inovo Venture Partners.

#6 Domination of Polish funds

As per the report, Polish funds dominated Q1 2021 and provided companies with as much as 65 per cent of capital. 

Further, the report adds that the trend has continued since Q4 2020. Compared to Q1 2020, this is an increase of 21 percentage points. 

Notably, the growing value of Polish fund investment overshadowed primarily the investments of international players. The share fell from 28 per cent to 14 per cent. 

#7 Increasing cooperation between local and foreign partners

In Q1 2021, 21 per cent of the capital was provided by co-investments of Polish and international funds, which was a slight decrease compared to the previous year (27 per cent). The share of co-investments was 28 per cent, claims the report. 

#8 Polish funds’ in foreign companies

The report says Polish VC has started taking the lead in syndicate with established funds more often. 

Examples of such deals include investments in Supplant from Israel (Manta Ray with co-investment from EQT, Felicis, Khosla Ventures, Coatue, and Y Combinator), Segron from the Netherlands (OTB Ventures with Credo Ventures), or Magaloop (Market One Capital with Redalpine, Piton Capital and Atlantic Food Labs).

Based out of Warsaw, Inovo Venture Partners backs early-stage and post-traction startups. The company invests between €0.5–2M in startups from Poland and the CEE region. It specialises in the fields of venture capital, corporate finance, innovations, SaaS, and marketplaces.

About PFR Ventures

PFR Ventures creates funds dedicated to innovative SMEs at different stages of development, starting from the earliest phases. At present, PFR Ventures has a portfolio of over 50 funds that have made more than 300 investments.