In 2020, Warsaw’s startup ecosystem is ‘a place to observe carefully’ – ClearTips
If you listed Trends has attracted the attention of 20 Warsaw-focused investors who responded to our recent surveys, Automation / AI, Enterprise SaaS, Cleantech, Health, Remote Work and the Answering Economy. These chancellors said they are exploring “digital twin” space, proctech and expanded blockchain tokens opportunities within industries.
Investors in Central and Eastern Europe typically seek similar things elsewhere as VCs: startups that have a unique value proposition, capital efficiency, motivated teams, revenue, and a well-defined market niche.
Of the cohorts we interviewed, many told us that COVID-19 has not yet adequately transformed how they do business. As Michèle Papuga, a partner at FlashPon VC, stated, “The situation hasn’t changed much since March, but we’ve gone from extreme panic to extremes. None of this is good and I’m off the long-term goals.” I will advise you not to stick and pressure. ”
Pavel Lipkowski of RBL_VC said, “Warsaw is at its pivotal point – think Berlin in the 90s. It’s a place to look carefully.”
Here we are interviewed for part one:
- Bryony Cooper, Managing Partner, Arkelli Brink VC
- Anna Vannuk-Balojesk, Investor Relations Manager, Experiac
- Rafael Rozczak, Investment Director, Unique Mint
- Michal Moczkowski, Partner, Market One Capital
- Marcus Erken, Partner, Sunfish Partners
- Boris Musialk, Partner, SMOK Ventures
- Matthias Ias Saberg, Partner, NextGrid
- Kuba Dudek, Speedup Venture Capital Group
- Marcin Laczynski, Partner, Next Road Ventures
- Michael Roquez, Partner, Innova Venture Partners
To conclude, we spoke to the following investors:
- Karol Zubsterski, Partner, OTB Ventures
- Mishal Papuga, Partner, Flashpoint VC
- Mishaal Bachmaz, Partner, Eper Ventures
- Pavel Lipkowski, Partner, RBL_VC
- Tomasz Golinski, partner, cofounderzone
- Sizmon Janick, Partner, Czysta3.vc
- Bogie Skowronski, Partner, Mitefcee.org
- Boris Cocot, Partner, AIP Seed
- Bartos Clerics, Partner, Alphabet
- Radek Czyrko, Partner, THC Pathfinder VC
Karol Zubsterski, Partner, OTB Ventures
What trends are you most excited about investing in generally?
The gradual shift of enterprises toward the use of automation and AI, which enables dramatically improved efficiency, cost reduction and the transfer of enterprise resources from tedious, repeatable and mundane tasks to more exciting, value-added opportunities .
What is your latest, most exciting investment?
One of the most exciting opportunities is ICEYE. The company is a leader and first mover in synthetic-aperture radar (SAR) technology for microsatellites. It is building and operating its commercial constellation of SAR microsatellites, which is capable of providing satellite imagery regardless of cloud cover, weather conditions, and daytime and nighttime (traditional SAR satellites with a 100x lower cost factor Comparable resolution), which is disrupting the multibillion dollar satellite imagery market.
Are there startups that you wish you would see in the industry but did not? What are some overlooked opportunities right now?
I would love to see more startups in the digital twin space; The technology that enables an exact digital replica / copy to be created in the physical space – a product, process or even the entire ecosystem. Such a solution enables experiments and [the implementation of] Changes that might otherwise be extremely expensive or risky – can provide great value for customers.
What are you looking for your next investment in general?
A company with a unique value proposition for its customers, a deep-tech component that provides a founder with a competitive edge and global vision over other players in the market and focuses on the execution of that vision.
Which areas are either very difficult for new startups or will be very difficult to compete in this field? What kind of products / services are you careful or concerned with?
No market / sector is very saturated and there is no room for innovation. Some markets seem more challenging than others due to the vast competitive landscape (eg, food delivery, language-learning apps), but can still be the subject of disruption due to a unique value proposition of a new entrant.
How much are you focused on investing in your local ecosystem vs. other startup hubs (or everywhere else) in general? More than 50%? Less?
The OTB focuses on opportunities with links to central East European talent (with no bias towards any hub in the region), which means making world-class products (usually out of headquarters CEE) to compete globally. Leverage local engineering / entrepreneurial talent for .
Which industries in your city and region thrive, or are not, for the long term? What companies are you excited about (your portfolio or not), who is the founder?
The CEE region is recognized for its large and highly skilled talent pool in the fields of engineering and software development. The region is well-positioned to build solutions that take advantage of deep, unique technology regardless of vertical (especially B2B). Historically, the field was particularly strong in AI / ML, voice / speech / NLP technologies, cyber security, data analytics, and more.
How should investors from other cities think about the overall investment climate and opportunities in your city?
CEE (including Poland and Warsaw) has always been recognized as an exceptionally strong field in terms of engineering / IT talent. The expansion of the inherent risk of entrepreneurs has, over many years, led to a more “copycat” / local market approach, withdrawing more ambitious, deeper technological opportunities. In recent years we are seeing a paradigm shift with a new generation of entrepreneurs tackling problems with unique, deep technological solutions, emphasizing global expansion, neglecting shallow local markets. As such, the quality of deals is continuously increasing and currently represents the top quality globally, especially at the technical level. The CEE market also exhibits an increasing number of startups (overall), driven mostly by early capital and a plethora of success stories in the field (eg, DataRobot, Bolt, UiPath) that are successful corporates / engineers. Beaches promote entrepreneurship.
Are you expecting to see a boom in more founders coming from geographies outside major cities in the coming years, with startups losing people due to epidemics and lingering concerns, as well as the attraction of remote work?
I am confident that the local hubs will hold their dominant position in the ecosystem. The remote / digital workforce will grow in number but capital, human resources and proximity to markets will still remain a prevalent force in shaping other startup communities.
In which industry segments do you invest more or less to highlight potential changes in consumer and business behavior due to COVID-19? What are the opportunities that might be able to start during these unprecedented times?
OTB invests normally in companies with clearly defined technological advantages, making their customers (typically the B2B sector) quantitative and near-differential, a value-add regardless of the market cycle. The economic downturn typically works in favor of technology solutions that enable enterprise customers to increase efficiency, cut costs, optimize and replace manual labor with automation – and the vast majority of OTB portfolios fit that description Does. As such, the majority of the OTB portfolio has not been greatly affected by the COVID epidemic.
How has COVID-19 influenced your investment strategy? What are the biggest concerns of the founders in your portfolio? What is your advice for startups in your portfolio right now?
The COVID epidemic has not affected our investment strategy in any way. OTB still pursues unique technological opportunities that can instantly add value to its customers. Such an approach provides a relatively high level of resilience against economic downturns (obviously, the sales cycle is expanding but the general sales pipeline / prospects / retention remains intact). Liquidity uncertainty in portfolios is always the number one concern in challenging times. The Lean approach needs to be reinvented, companies need to conserve cash and keep optimizing – this is the only way to get through the crisis.
Are you seeing a “green shoot” about revenue growth, retention or other momentum in your portfolio as they are epidemic-friendly?
A good example in our portfolio is Segron, a provider of an automated testing platform for applications, databases and enterprise network infrastructure. Software development, deployment and maintenance The IT ecosystem in the enterprise requires continuous and rigorous testing protocols and very heavy lifting with such highly skilled engineering talent (which can be used elsewhere in a more productive way is). The COVID epidemic has kept engineers home (not with the ability for remote testing) during the demand for digital services (and such demand for a reliable IT ecosystem). The Segron automated framework enables full automation of enterprise testing, allowing increased efficiency, operational cost reductions, and enterprise customers a good sleep about their IT infrastructure in a peace of mind and challenging economic environment.
What is the moment that has given you hope in the last month? It can be professional, personal or a mixture of both.
I am impressed by the unbearable determination of many founders and their teams to overcome all the challenges of an adverse economic ecosystem.