Warsaw-based bValue, an early-stage venture capital firm, announced on Tuesday that it has launched bValue Growth, its third fund, with a target of €100M. Having said that, the Polish VC has already raised €72M from institutions, family offices, and private individuals.
With the third fund, the VC intends to invest between €5-15M in 8-12 profitable, growing companies with scalable business models from the CEE (Central and Eastern Europe) for an equity stake of 20-40 per cent.
The target company should be EBITDA-positive and has no more than €25M turnover.
“Central and Eastern Europe, itself fragmented and consisting of relatively small markets, has seen a rise of mid-size tech companies selling their products and services globally. The majority of them will never reach unicorn status and therefore don’t appeal to VCs looking for so-called fund makers. However, they have the potential to reach size and profitability that will make them attractive to larger PE funds or strategic investors. This is a huge market niche, where we see a lot of investment opportunities that can generate considerable returns”, says Maciej Balsewicz, Founding Partner at bValue.
bValue Growth is managed by Maciej Balsewicz and Michał Bartosz. The third fund (bValue Growth) follows the success of two early-stage funds managed by bValue for the last six years, with a combined value of €20M.
The VC has already made 36 investments in the past two funds and exited from 12 companies.
The exit includes 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).
The first fund, in its exit stage, has already seen a return of 3x MoIC and expects to reach 10x MoIC in the next 2-4 years.
The second seed fund is still in the value creation stage but plans its first exit in the upcoming months.
Some of the bValue Seed portfolio, among others, includes
- Tidio: live chat, chatbot, and mailing solutions for micro-businesses; Fund raised: €25M Series B in 2022
- More Growth: Creator of online brands in parenthood, personal finance, and wellness; Fund raised: €5M in a pre-seed round in 2022
- Spin.ai: an all-in-one platform that delivers the last line of cyber defence for SaaS data; Fund raised: €16M in Series B in 2022
- Aggero: marketing platform for brands to manage and engage video gaming influencers; Fund raised: €4M in seed funding
- Your KAYA: a D2C brand of feminine care products made with safe, organic ingredients.
“Private equity in Poland and the CEE seems to be dominated by buyout funds, which grew on full exits of the first-generation entrepreneurs. 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 grow their companies to reach higher profitability and valuation within 4 to 5 years. Those are exactly the founders we are looking for. Ambitious entrepreneurs are aware of their business’s growth potential and the need for outside capital and guidance to achieve it, says Michał Bartosz, Partner at bValue.
“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. 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 early-stage and private equity investments to unlock the new path for growing and maturing tech enterprises”, says Maciej Balsewicz.