Polish VC market: Q2’22 summary — slowdown? Maybe another record year!
Recap of the Polish VC market based on research Inovo Venture Partners has done in cooperation with PFR Ventures.
TL;DR | What you need to know
👉 In Q2'22, €197M (PLN 916M) was invested in 93 Polish startups by 111 VCs.
👉 €446M (PLN 2.1B) YTD, 76% Y/Y growth
👉 Poland and CEE (76% and 108% y/y growth, respectively) still growing in comparison to the EU and the US (8% and 12% y/y decline, respectively)
👉 Top 6 rounds: Tidio, Synerise, Nomagic, Talkin’ Things, Symmetrical, Zowie
👉 New global VCs in the Polish ecosystem: Tiger Global, Peakspan Capital, Almaz Capital
Where are we now
In Q2’22 we jointly invested €197M (PLN 916M) in Polish startups — based on the research we’ve done with PFR Ventures. This is quite a similar amount to the €201M (PLN 1B) invested in Q2’21. Despite the weak global sentiment, the Polish start-up ecosystem has once again proven its potential and solid foundations — in 2022 YTD we achieved €446M (PLN 2.1B), thus showing an increase of 76% y/y. Is another record year ahead of us?
Despite the global headwinds Poland and CEE look strong
Poland and the CEE continue to catch up with western, more developed ecosystems. According to our report and Dealroom data, they showed y/y growth of 76% and 108% respectively. Meanwhile, the EU and the US markets saw declines of 8% and 12% respectively.
Of course, the current situation does not leave us unaffected. We are part of a global ecosystem, which is best demonstrated by the fact that in Q2’22 72% of investments in Polish start-ups came from international VCs. As a result, the market may slow down in the near future. However, we still have the potential to surpass the last record year, when the total value of investments in Polish startups amounted to €792M.
Emerging… you mean maturing market, right? More and more later-stage rounds
The situation at the early stage remains relatively stable. We see ~80–90 rounds at the seed stage and ~10 series A deals every quarter. However, looking at the structure of the rounds and the increasing number of later-stage investments (after A), it is clear that the ecosystem is maturing. There were 10 such rounds in H1’22 (€220M total value), compared to 3 a year ago (€65M total value). What was considered an outlier a few years ago would be an increasingly common thing in the Polish ecosystem.
Of course, we are still behind Western ecosystems. However, we’re catching up quickly regardless of the current market sentiment. Polish founders and their products are more and more being chosen by global clients and seen by top VC investors. Those are great reasons to celebrate 🥂.
Speaking of global ambitions — top 6 rounds in Q2’22
Q2’22 is a great example of maturing of our ecosystem. There were six rounds above $10M in companies founded by top Polish entrepreneurs — Tidio, Synerise, Nomagic, Talkin Things, Symmetrical and Zowie, congrats to all!
We’re very happy that three out of six rounds were raised by amazing founders that decided to partner with us earlier!
Outliers? No. We are sure that it will be an increasingly common thing in our ecosystem. Top founders have no problems whatsoever in raising subsequent rounds to finance the rapid development of their companies and our market is on the radar of top global VCs, the last quarter is the best example of it.
We are happy that well-known global investors like Tiger Global, Almaz Capital or PeakSpan Capital have invested in their first companies from the Polish startups. This helps the entire ecosystem grow through knowledge sharing and networking.
Forecast for the rest of the year
Current global market sentiment is not too optimistic. Global funds are recommending companies extend the runway, there is news everywhere from everywhere about layoffs in global technology companies. The data for Poland continues to be good, so far strongly beating the previous record year, however, we must remember that many of the rounds announced last quarter closed in Q4'21 or Q1'22, so in a more favourable time. Therefore, a major challenge in the coming period will be for both entrepreneurs and funds to adapt to the new conditions.
However, I am convinced that the market will come out stronger and this is a good time to invest in startups because deep down nothing has changed — we still have great engineers and more experienced entrepreneurs. That’s why I’m confident that we will be able to beat the last year’s record. Getting to €1B is not impossible, but it will be difficult because the global slowdown can be seen especially at the later-stage.
Methodology: how did we collect data
We conducted this research in collaboration with PFR Ventures. We sourced our information from aggregators such as Crunchbase, MamStartup, Pitchbook, and Dealroom.
What qualifies the transaction as “Polish”?
1. At least 1 of the co-founders is from Poland.
2. There is a Polish office with full-time employees on the ground.
3. The company is funded by a Polish VC.
4. The company recognizes Poland in its materials (website, press releases).
Inovo Venture Partners is a first-choice VC for ambitious founders from Poland and the CEE region. We back early-stage startups with up to €3M of initial investment, and help them build global brands while driving growth of the local startup ecosystem. We take great pride in being close to top founders who think big. We’re investors in: Booksy, Infermedica, Spacelift, Tidio, AI Clearing, Zowie, Jutro Medical, Intiaro, Packhelp, Preply, Eyerim, Allset, SunRoof, Archbee, AhoyConnect, and uPacjenta. Our second fund reached a total of €54M.
For more information visit: inovo.vc
