For Poland’s start-up ecosystem, a welcome injection of capital

Some of Poland’s most innovative start-ups can now access new funding from the largest national initiative supporting innovations in the European Union.

There was a huge boost for the Polish start-up ecosystem this week with news that PFR Ventures, Poland’s national development financial institution, fully owned by the Polish state, had committed 47 million euros to investment in four new, early-stage VC funds: 24Ventures, Digital Ocean Ventures Starter, Hard2beat, and Tar Heel Capital Pathfinder.

All have the goal of supporting innovative companies at the earliest stage of development.

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The total capitalisation of the new funds exceeds 250 million złoty (around 58.4 million euros), with PFR Ventures’ contribution reaching 200 million złoty (46.7 million euros).

The investment in the new VC funds is being carried out under the European Funds for a Modern Economy (FENG) programme, the largest national initiative supporting innovations in the European Union.

“Since the launch of our first investments programme in 2018, our goal has been to facilitate access to capital for Poland’s innovative enterprises in an indirect manner,” says Maciej Ćwikiewicz, president of the board at PFR Ventures.

“This is achieved by partnering with the best local and global management teams, including emerging managers. The first four funds to receive new EU capital are led by people with experience in venture capital investments and developing tech start-ups. They were chosen from nearly 100 offers from management teams. We always set a high bar, albeit adjusted for new teams, with a strong focus on reputational aspects.”

And there’s more to come, adds Ćwikiewicz. “We also expect to announce more funds that will receive our funding later this year,” he says.

The funds

24Ventures is managed by experienced managers previously associated with the Satus Starter Fund, also supported by PFR Ventures. It will invest in young companies developing products that address long-term trends such as the digital transformation of businesses, climate, and social changes. The fund plans to invest in 18 globally scalable projects over four years.

Digital Ocean Ventures Starter will finance companies in the FinTech sector and AI-supported digital transformation. The fund was founded by a team previously active in the banking, VC, and technology sectors, with experience in venture building. Their understanding of the financial sector and digital transformation processes allows them to quickly validate start-up ideas and support their scaling.

Hard2beat is a fund created by serial entrepreneurs and technology investors, focusing on early-stage investments in DeepTech companies developing software-based solutions. Hard2beat’s mission is to support ambitious and determined entrepreneurs who understand that building a business is a marathon, not a sprint, and are focused on achieving long-term goals.

Tar Heel Capital Pathfinder meanwhile invests in globally scalable technology businesses in areas such as AI, SaaS, Marketplace, CleanTech, EdTech, MedTech, and Cybersecurity.

In addition to funding, it offers start-ups technological, business, marketing expertise, and access to a network of potential business partners to accelerate their growth and outpace competitors. Its portfolio includes companies like Selmo, Wellbee, Teleradius, and Multilango, and it has exited the company Primetric, which was acquired by the American industry leader BigTime.

All four funds will invest in companies until the end of 2029, and the divestment period will last an additional four years. The programme provides capital for venture capital funds with an investment ticket of up to five million złoty (around 1.16 million euros).

CEE’s biggest institutional fund

PFR Ventures is part of the Polish Development Fund (PFR), which together with private investors, business angels and corporations, invests in venture capital and private equity vehicles. PFR Ventures’ objective is to use this capital to support Polish innovative companies at various stages of development.

As the biggest institutional fund in Central and Eastern Europe, PFR Ventures currently holds a portfolio of more than 80 funds that have made over 900 investments. The investment programmes are fueled by the Polish Development Fund’s own budget and capital from European Union funds, including European Funds for a Modern Economy.

The new funds from the European Funds for a Modern Economy programme will support approximately 40 venture capital funds, with public contributions totaling two billion złoty and an additional 1.1 billion złoty from private investors. This is a continuation of the activities under the Smart Growth Operational Programme (POIR), where PFR Ventures allocated 1.5 billion złoty to venture capital funds, which have financed nearly 400 projects.

The programmes funded by FENG stimulate different types of investments in start-ups and tech companies. Some focus on providing funding for the earliest projects, while others enable the development of projects in partnership with corporations or business angels.

“PFR Ventures is the largest ‘fund of funds’ manager in Central and Eastern Europe,” says Piotr Matczuk, president of the management board at the Polish Development Fund.

“It supports Polish companies at various stages of development, from innovative seed projects to traditional companies already operating internationally. We use both EU funds and our own capital for financing. We plan to increase our involvement in this area and work on further developing the VC and PE market ecosystem in Poland.”