LAUNCHub Ventures LP Meeting in Sofia:Market Insights and Portfolio Performance

At the end of June, LAUNCHub Ventures organized its annual LPs (investors) and portfolio meeting in Sofia for the first time in person. It was an opportunity to gather some of the most successful companies in the region, such as Ampeco (Bulgaria), Ferryhopper (Greece), Veridion & Neurolabs (Romania), GlycanAge (Croatia), and Colossyan (Hungary), along with institutional investors like IFC (part of the World Bank) and EIF (the largest investor in Europe), as well as successful tech entrepreneurs and investors from Southeast Europe.

The meeting reflected our 12 years of investment experience and the 3.5 years since we started investing from our most recent fund of 74 million euros. Notably, this fund has invested through three very different cycles — it started during COVID, experienced the tech boom of 2021 and early 2022, and has continued operating in the VC recession market since H2 2022.

Many of these learnings were discussed in the group and are incorporated into some of our most recent findings.

Revenues are growing strongly

While in the period from 2018 to 2022 (with a short freeze in H1 2020) valuations and funding rounds outpaced the revenue growth, which allowed mega rounds to be raised with small recurring revenue metrics, today the picture is completely reversed — revenue is growing ahead of the funding rounds.

“We are proud that out of 22 seed and pre-seed investments since 2020, we already have 3 that have grown annual revenues above 10 million euro and we expect 30% of the portfolio to hit that level by the end of 2024. This is an outstanding metric for any seed stage fund in Europe,” comments Stan Sirakov, General Partner in the fund.

“On top of that,, our companies are growing faster than the market: the ones with more than 10 million in revenues are growing on average by 65%, and the ones that are between 2 and 10 million are growing on average by 170%,” he adds.

Fundraising appetite for the best performers

Another interesting conclusion is that despite the significant drop in financing at Series A or later stages, the best performing companies are still able to raise significant rounds — as visible by the recent rounds of our portfolio companies Colossyan ($22m) and Ampeco ($16m). The fund is still quite ahead of many of its peers by the ratio of seed companies that raised Series A — one of the most important benchmarks. It is quite encouraging that 60% of our seed investments go out on the market and are able to achieve Series A mostly from brand name funds in the US or the EU/ UK markets.

Pipeline becoming more diversified

Lastly, the team discussed some recent trends in the pipeline. It is obvious that we see much more AI-related startups — an area in which we have been investing since 2012, but has become much more nuanced and diverse today with companies across different parts of the stack — foundational models, MLOps and AI infrastructure, AI-first applications, vertical and horizontal AI SaaS, and full stack AI companies. There are other trends we are excited about like Life & Sciences and Health (as our most recent investment in GlycanAge) and ClimateTech (our flagship company Ampeco). We see more and more companies in these areas developing in our region

The way we scout for companies has also changed, allowing us to leverage technology, on top of very warm recommendations from our portfolio founders and our co-investors. This resulted in LAUNCHub being named among the 100 data-driven VCs in the world.

In conclusion, our overall appreciation of the startup scene in CEE is increasing and it is accounting for the amount of great entrepreneurs in our home market. There are more and more category-winning companies, more and more second-time founders and increased investors’ appetite for the region.

We share this appreciation with our LPs and will continue to invest in some of the best performing startups. The progress of our portfolio and the new companies we scout for encourage us on the journey.

We thank all attendees for their participation and look forward to our next meeting to continue sharing and celebrating success.

Thank you for being a vital part of our journey!!!