🔥RR #14 Ecommerce, Grocery Deliveries, and Bolt again
Mining for hidden gems in Central Easter Europe
I hope you all had a great Summer! I decided to take a longer break and log out from all the craziness around us. I tried to stay offline for most of Summer. That was also the reason for not sending out an update in August. Consistency trumps everything else, so I know I have to do better.
Now fully back at work I looked at all the deal activity which took place between July and August. Summer or no Summer it was a busy period. I took note of more than 100 rounds which represent around €2,2B in invested capital. You read it right, that’s B as in Billion. We ended up with such a high number thanks to 4 mega-rounds which totalled €2,1B. The average amount raised during July and August was around €850k → 118 rounds.
Looking at my data set, I noticed that these mega-rounds happen consistently every month. The main themes which attract these growth rounds are Ecommerce, Transportation, Logistics, Gaming. I guess that outside of traction, the size of these markets is a significant determinant. Some companies like Bolt, Getir, Trendyol raised mega-rounds more than once in the past 15 months. It is a good sign for the entire region. After the successful IPO of UIPath we are starting to see more companies following.
MCI Capital put together a list of the largest tech companies in the region. Great for reference.
If we look at the categories where these companies operate, I feel it is fairly concentrated. I would only argue with the classification in some cases. Grammarly fits more into SaaS than Media & Entertainment. In any case, I thought we would see more SaaS. In Poland alone, we’ve tracked 240 SaaS companies for our 2021 SaaS Landscape.
There are also rumours that Docplanner might finally become the “first” Polish Unicorn → brief mention in Puls Biznesu (only in Polish). Also, another close addition to follow is Booksy. Stefan Batory hinted at it during a recent podcast with Tomasz Swieboda (only in Polish - sorry, again). Docplanner and Booksy are the two most commonly shared examples of the future Polish Unicorns. I guess at this stage it is only a question of when not if.
As I look outside my window Summer is definitely over, so now it is back to business as we enter the busiest time of the year for Venture Deals.
#news and data about CEE I've picked up recently
Remix, a Bulgarian second-hand fashion marketplace was acquired by Thredup.
Valueships which provides growth consulting for SaaS companies published a growth white paper with many great data points.
OTB Ventures raised a fresh €60M to support their F1 portfolio.
Interesting interview with Roberta Rudokiene, Head of Startup Lithuania about the 2021 outlook for the local startup ecosystem.
#companies I found somehow interesting this month
Argos is a vision and machine learning software aimed at Automated FOD detection at Airports. FOD is short for Foreign Object Debris. Thanks to their technology airport maintenance crews can keep runways, taxiways and other parts of the airfield safer. Recently I’ve started investigating companies at the intersection of voice and vision. Combined with low latency communication this might be a powerful extension to existing platforms.
The tours and attractions market has been heavily hit by covid. Especially impacted were main tourist attraction in major tourist destinations. On the other hand we have seen a spike in the local market. These small operators are usually not very digital. Thanks to Droplabs, they can now sell their offers online, take payments, distribute special offers to partners.
Knowledge management and collaboration has always been a hot space for startups to experiment with new ways of solving old problems. Notion.so would be an example of a very flexible tool to address company wide collaboration needs. What Archbee does different is that it has taken a narrow focus on developers. It provides a great experience for knowledge management and collaboration which fits specific needs of engineers. Think product docs, wikis, APIs, product docs.
#Jul’21 and Aug'21 - here is a snippet of the most important numbers
📣 122 rounds announced
💰 ~ €2,2B raised (all rounds converted into EUR)
🚀 Four mega-rounds -> Eobuwie.pl, Rohlik, Trendyol, Bolt.
🌍 Accel, Balderton Capital, Index Ventures, Point Nine, Version One, Softbank Vision Fund, General Atlantic were among some of the international investors active in July and August.
🇹🇷 Turkey was the most active country (again). 44 rounds raised by companies in Turkey.
Few comments based on the data
There is definitely no sign of a slow down in CEE funding. We are seeing a consistent number of rounds being announced. What is surprising though are the mega-rounds. Many of the companies which raised hundreds of millions in funding have been many years in the making but it a strong sign that the region can produce outliers. Many of these companies were initially funded by local funds. Once we will see more exits from them, this money should fuel the local ecosystems. This is the end game of any successful startup ecosystem.
Every month I’m amazed by the number of new funds that I find on the list. Not only the ecosystem is expanding through more companies being created but also on the funding side with more fund managers joining the race. I guess it will only mean more local and regional competition. Looking at later stage rounds, there are very few local/regional funds involved. Most of the competition is at the early stage. This is also represented by the average round size which is below €1M. There are only a few regional funds above €100M in assets under management. These would include Earlybird, OTB, 3TS, Flashpoint. MCI Capital has also recently announced a new strategy to focus on regional software champions.
For several months now, Turkey has been the most active country. Ecommerce, gaming and transportation have been the most active areas. Many rounds have attracted international funds. It is definitely a vibrant ecosystem. Estonia, Poland and Turkey would represent the TOP3 countries in the region.
Thank You! You've reach the end of this months update. Much appreciated, I hope you enjoyed the content. If you would like to share feedback or comments feel free to hit the reply button. PS sorry for all the typos