on the 3rd of July’20 I’ve shared with you the first Rounds Review for announced VC rounds in CEE. I started with this primer. The goal was simple. I wanted to learn more about investing in CEE. I thought that the best way to do that is to look at companies who raised venture funding. I started tracking rounds I could find in public databases.

Each month from June until now I’ve shared with you some basic stats on funding in CEE. I tried to comment on the things I thought were interesting. …


This is the 6th time, I’m looking at venture rounds which have been announced in CEE. For those of you, who are reading this update for the first time — here is a primer on why I started this research.

It seems that on one hand, 2020 was a tough year for startups in CEE. Each month has seen a YoY drop in the number of announced rounds. On the other hand, we have seen some massive rounds in the region as some early winners started to emerge. #spoileralert Brainly (Poland) just raised $80M for its homework platform. Bolt raised another $180M for A.I. drive. Pipedrive the Estonian CRM company was acquired by Vista. I think these examples show that great companies can come from anywhere. …


I hope you are well and safe. As predicted, in many countries across the EU Covid19 has struck back with an even deadlier force. Unfortunately, Poland has seen a dramatic increase in cases. With 20k-27k daily cases, we are borderline National Quarantine. I guess we can only hope that a relief (in form of a vaccine or other) will come soon.

#backtobusiness

I think most of us in the industry have somehow found a “new normal”. It seems that 2020 is a year of zoom VC. My impression is that deals are getting done faster with less due diligence. Later stage funds (~ series A) are getting more aggressive at seed and even pre-seed in some cases. Two words — more competition! Everywhere. Not only stagewise but also geo is starting to play a smaller role. Since everyone is on zoom anyway, what is the sense of national borders? …


It is that time of the month again to look at the rounds which have been announced in September within our region. As we enter Autumn, and we are starting to feel the pain of Covid19 again, September was not a bad month both for startups and VCs alike.

For September dataset, I tried to look at additional data sources to get a more comprehensive view of the market. Besides Crunchbase, I have also included data from: Dealroom, and community spreadsheets from Estonia, Latvia and Lithuania. Adding additional sources, only slightly enhanced the data. …


With summer almost coming to the end, it feels good to be back in the office. September was always special, as it marked (at least for me) the beginning of the “VC Season”. Usually, the calendar was full of conferences and travel. In the “Year of Remote” it has a different feel to it. We will see how the rest of the year plays out.

After a pretty strong July with 19 round announcements, I was anxious to check the data for August. My intuition was that we are going to see fewer rounds being announced.

In the last few weeks, I had several conversations with fellow VCs in Turkey and I have decided to included Turkey in the Rounds Review. This means that from August 2020 I will be tracking VC round announcements across 11 CEE countries. …


We all know that in VC, summer months are not the most active in the year. Many people take time off and usually not many deals get done across July and August. The common wisdom is that deals which were in the works over Spring, usually tend to close in June. With many people on vacation, July and August are probably not the best months to announce anything if you want to pick up some interest.

This year is even more difficult because of a global pandemic we have been battling with over several months. With Covid19 still raging across the globe, I suspected an even steeper decline in deal volume. Just as a reference, looking at Jul’19 there were 51 rounds announced across the CEE. This year, we saw 19 announcements being made in July. On a year-on-year basis, this represents a drop of ~63%. On a month-to-month basis, July was better than June, as 10 more rounds were announced. …


When Covid19 hit Europe and EU countries introduced lockdowns I started looking at round announcement in the region. I was curious to see what will be the impact on the investment landscape when there is no travel and there are no startup events.

I decided to look at 10 CEE countries -> Estonia, Latvia, Lithuania, Poland, Czechia, Slovakia, Romania, Hungary, Bulgaria, Slovenia. CEE can be probably defined in a number of ways. I picked those 10 countries as I visited all of them except Romania, which was on the list for this year.

Those ten countries represent a vast region and are home to some of Europe’s greatest tech companies. By reviewing announced rounds I was hoping to learn more about interesting companies and investors who are active in the region. …


Since the launch of Salesforce, SaaS (Software-as-a-Service) has seen explosive growth across horizontal and vertical markets. As a result, a paradigm shift has occurred. A typical desk-worker is using multiple cloud applications and non-desk-workers are quickly adopting mobile software. From a value creation perspective, the BVP Cloud index has emerged clustering SaaS companies in an index.

Gartner is projecting that in 2020, businesses will spend ~$500B on software. Salesforce alone is forecasting ~$13B in Annual Revenue for 2019. SaaS funding continues to climb, especially in Growth with mega rounds like the latest $250M Series E Round of Toast (POS software).

It is probably safe to say that the dominant state of software has shifted from on-prem to the cloud. …


“Days are long but the years are short” — Gretchen Rubin

Time flies. It has been two years since I wrote anything on Medium. I’ve started this post with a quote which pretty much sums it up. When your are in the middle of what ever it is that you do, it is easy to lose time. It is only at moments of reflection when you spot how much time has passed and how far you have travelled.

The last two years were hard. On the last day of 2016 we had the first close of our second fund (F2). It was the beginning of a fundamental change. F1 was an ~€8M vehicle with a mandate to only invest in entities based in Poland. F2 is currently at ~€24M and gives us a mandate to invest in B2B Software companies based in the European Union. Our potential dealflow grew by an order of magnitude. …


Many of us are familiar with the Startup=Growth mantra. Companies taking on venture capital are expected to grow fast. Growing fast might mean many things. In the SaaS world the conventional wisdom is that revenue should grow at least double digit month over month. This comes as a surprise to many founders who just launched their product. Talking to this group about such a high growth rate is like asking a toddler to run a sprint.

Conventional wisdom is great in general, but somehow feels wrong when applied specifically. What if growth is actually a staged process. For every stage of development of your company, growth might mean a different thing. I spend most time around companies with zero to little above zero in MRR (Monthly Recurring Revenue). Challenges of these companies are very different from the ones being referred to in posts about growth. …

About

Marcin Szelag

I’m a Partner at Innovation Nest, a seed VC fund focused on B2B Software. Helping SaaS founders with growth strategies and tactics.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store