Dealroom.co

Case study

How Dealroom is helping Polish VC Fund Inovo map hypergrowth CEE tech companies that are ready to conquer global markets.

“It’s our job to help founders understand the overall environment of the target country like the market size, maturity, dynamics and regulatory affairs. Dealroom is one of the main sources behind transaction data and market-size data of the countries we’re looking at for international expansion.”

Kacper Zambrzycki

Investment Associate, Inovo Venture Partners

An early-stage VC fund

Inovo Venture Partners backs early-stage, post-traction startups that can grow 100x, with a focus on Central and Eastern Europe.

  • Challenges

    • Sourcing hypergrowth CEE companies that are ready to conquer international markets
    • Reducing the time-intensive research part of expansion strategizing with quality global data
    • Developing a robust data bank to use for outbound deal sourcing

  • Solutions

    • Use Dealroom’s world-wide data to investigate the right destination for global expansion
    • Gain deep intelligence on market size, dynamics, competitors and maturity in multiple global ecosystems
    • Make intelligent market predictions to guide growth strategies, using Dealroom’s platform

  • Results

    • Find CEE-based rising stars to partner with, early in the funding round
    • Ability to fluidly zoom in the perspective down to company level, and out to the broad market level in target markets
    • Use Dealroom as a dynamic data source to aid investment evaluation and to move portfolio companies up the curve

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Challenges

Mapping the CEE activity that could turn into investment-ready opportunities

They may be cagey about the exact strategies they’re using to find promising investment opportunities, but Poland-based VC fund Inovo are clearly doing something right – the team recently closed their second €45m fund. Inovo helps ambitious startups like Booksy, Zowie and Infermedica become global successes, with a laser focus on the CEE tech sector.“We’re known for providing hands-on operational support,” says Kacper Zambrzycki, Investment Associate at Inovo. “Our team members are ready to join the startup full-time for 3-6 months if needed. One of our partners, Michal Rokosz, has been the COO of Booksy for two years now, and Paweł (Stajgis) is at Zowie helping on the financial and data side.

”What sets Inovo apart is how they treat their founders as partners. “Whether they need our help, network, or nothing at all – they can count on us to deliver. That’s why we have an exceptional ‘founder NPS’, so it’s no surprise that a lot of our startups come from their referrals,” says Kacper.“We have a diverse network of other funds, angels and tech enthusiasts willing to make a warm introduction.”Despite these impressive networks of top introducers, sourcing CEE-based technology companies that are ready to conquer international markets is no easy feat. Deal sourcing is an art, and Inovo combines efforts in multiple areas to map promising players in high-potential markets and industries.

Solution

Using Dealroom's data to select the right destination for global expansion

“The exact methods we use to source deals are our sweet secret, Kacper says with a wry grin. “But we definitely rely on Dealroom to help us map the Poland and CEE ecosystem and spot the deals that are taking place. As a company, we do quarterly summaries of Polish VC transactions – Dealroom is one of the four main sources behind transaction data as well as market-size data of other countries.” Scaling businesses in the home market is one thing, but Inovo’s investments are made with a view to expanding the startup internationally. This can be a challenging task. Before any expansion is considered, it’s crucial to select the right destination.

“For most startups, that’s the U.S. But, depending on the product and business model, other markets may be more viable,” Kacper explains. “It’s our job to help founders understand the overall environment of the target country like the market size, maturity, dynamics and regulatory affairs.”This is another area where Dealroom streamlines the process. The market profiles, investment heatmaps and granular data, dissectible by geography, industry, business model and theme, provide easy access to relevant data in countries that might otherwise be all-but a closed door. “We make extensive use of Dealroom’s data and analytical support while investigating expansion opportunities,” Kacper says.

Results

A dynamic data source for moving CEE companies up the curve

Inovo is one of only five Polish VCs backed by the European Investment Fund. It second fund will see six deals tied up in 2020, with a total of 20 companies on course to secure investment over the next three years, including Infermedica, Tidio and Eyerim. The fund is actively looking for opportunities in the CEE, which currently is the fastest-growing region for VC investment.“It’s clear that Polish funds account for the vast majority of the transactions,” says Kacper. “There are over 200 new seed deals taking place in Poland each year. Assuming 1% unicorn conversion, we should see at least two unicorns in the upcoming years, and the situation is similar in other major CEE countries like Romania, the Czech Republic and Hungary.”

“It’s still a small market, of course, and it will still take some years to catch up with the value of investments known in Western Europe or the US. But we’re getting there. Exceptional startups like DocPlanner, Booksy, People.ai and Pipedrive are on their way to crossing the billion-dollar valuation. Plus, we have ahuge pool of great engineering talent and their salaries are inexpensive compared to the West. The cost of living is appealing too. All of that creates a fertile ground for digitally savvy founders.”Data quality is paramount in this vibrant startup scene. For Inovo, Dealroom is a trusted source whether they’re conducting company analysis or getting to grips with market trends, notable rounds and investor sentiment in up-and-coming hubs.“It’s a growing playing field, and Dealroom is helping with the professionalisation of the market in the CEE,” says Kacper. “It’s incredibly exciting to watch the ecosystem evolve and to play a role in this early stage of the wave.”