Summary of 2023 at Movens Capital: portfolio growth, new investments and the launch of a new fund

Despite the challenging market environment, the portfolio of Movens Capital experienced strong growth, with the total revenues of our companies in 2022 increasing 2.1 times in 2023. Last year, we invested in six new companies, led by founders from Poland, Ukraine and the Czech Republic. In addition, we completed a sixth successful exit from fintech company Fenige, achieving a 4.5-fold return on invested capital. We are also nearing the launch of Movens Fund 2, which will invest in 30 disruptive companies in Central and Eastern Europe (CEE).

In 2023, our investment activities were carried out through Movens VC, which focused on the pre-seed and seed stages, and through Movens Growth Equity, which invested at the Series A stage and in technology companies that were already achieving profitability. In Movens Fund 2, we will pursue both of these strategies in one new fund.

Six new investments, one exit and good performance of portfolio companies

Since 2023, great opportunities have emerged for profitable investment in technology companies in Central Europe. The level of valuations has significantly fallen, while the supply of attractive projects has increased.

Last year, we invested in six new companies, including four early-stage deals led by Movens VC and two series A+ deals led by Movens Growth Equity. Since July 2020, we have invested a total of EUR 14 million in 22 technology companies, almost half of which are artificial intelligence and machine learning (AI/ML) pioneers. Our companies are leading the global AI revolution with products such as the Sky Engine platform for efficient synthetic data generation in computer vision, StethoMe — revolutionary AI home stethoscopes — and Talkie.ai, an innovative communication platform for healthcare providers.

We are pleased that our portfolio companies have successfully secured the funding required for further growth. They have already raised more than EUR 93 million in the rounds following our entry, which is eight times the initial investment, and are gaining the trust of leading co-investors worldwide.

In addition, the annualised revenues of our portfolio companies exceeded EUR 70 million in Q4 2023, an increase of more than 110% compared to the previous year (considering only the companies that were also in our portfolio in 2022). At the same time, in the past period the companies managed to reduce the burn rate, in effect significantly improving the efficiency of capital utilization.

Among the companies that raised capital in 2023, the following are worth highlighting:

· Vue Storefront raised $20 million in round A. The deal became the second largest funding round in the country in 2023. Vue Storefront is using the funds to improve its headless front-end technology offering for large corporate e-commerce clients and aims to become a market leader in its category.

· Woltair has secured an additional EUR 20.5 million, making it one of the largest investments in Round A in Czechia and CEE. The company accelerates the deployment of heat pumps and renewable energy (mainly photovoltaic and heat pump technologies) in homes through a digital platform in Czechia, Poland, Germany, and Italy.

· SKY ENGINE AI has raised US$7 million to expand its synthetic data platform for a wide range of the world’s most advanced technology customers. SKY ENGINE AI is helping companies such as Renault, Scania, Ericsson, Samsung and Syngenta build AI models and bring AI-based products to market faster.

Movens VC welcomed four new early-stage portfolio companies:

• Certifier offers a platform based on a world-class application programming interface (API) that facilitates the management of digital certificates. The system is being used worldwide by higher education institutions and small and medium-sized enterprises, as well as institutions offering online education. In just two years since its launch, Certifier has acquired over 400 business customers (80% from the US, UK and Canada). The size of the global digital credentialing software market is estimated at US$1.6 billion and is expected to exceed US$6 billion by 2033.
• Gotiva, a technology company led by industry veterans that develops entertainment apps for digital content creators, is using AI tools to improve content creation and monetisation strategies.
• Partory, a ‘factory in the cloud’, specialises in software and outsourcing services for the procurement of non-critical production parts, operates in a market ripe for digital transformation, and uses technology to automate procurement and pricing.
• ForActive, led by industry veterans from companies such as Booksy, is developing a US market focused on the fitness and wellness industry, particularly for self-employed professionals and instructors.

Movens Growth Equity has added two new companies to its portfolio:

• Devskiller is a TalentTech solution offering a platform for assessing, managing and developing digital skills. Their products, DevSkiller TalentScore and DevSkiller TalentBoost, form a talent management platform companies utilize worldwide.
• Trasti is a digital insurance company that focuses on automotive retail customers. Managed by industry veterans, Trasti is poised for rapid growth in Poland and beyond.

In 2023, Movens Capital also celebrated significant success with the exit of Fenige, a cross-border payments company. We invested in Fenige at the initial revenue stage in 2017, and in 2022, they generated more than EUR 11 million in revenue. Not surprisingly, the exit of Fenige earned Movens Capital 4.5x CoC. This was Movens Partners’ sixth successful exit from technology investments.

Regional trends and Movens Capital’s strategic positioning

Over the past few years, we have witnessed the dynamic growth of AI startups in CEE. More than 1,000 of these startups have sprung up across the region, have raised more than US$4 billion in funding (including mega-funds), and, in many areas, have the potential to be global leaders. It is also encouraging that in virtually every country in the region, from Estonia and Latvia, through Poland, Ukraine or the Czech Republic, to Romania, Bulgaria or Croatia, we have many players who have secured funding at the level of several tens of millions of dollars. In some cases, several hundreds of millions of dollars have been raised. The record-holder UIPath has raised $2 million, and the first Polish unicorn in the field of AI — ElevenLabs — has raised more than $100 million. Our regional strength is that science, technology, engineering and mathematics (STEM) education translates to, among other things, more than 1,000,000 developers working in the region.

Notably, there are Poles among the founders of many leading AI projects, such as OpenAI, Facebook AI Research, or DeepL, and in the research and development (R&D) centres of practically all technology giants operating in the region. In addition, strong software houses also have a positive impact — they are not only an important source of technological talent, but also in many cases the birthplace of many of the region’s most groundbreaking product companies (in our case, Vue Storefront or Talkie.ai).

As entrepreneurs, we have been building data science departments since 2016, and since 2020, we have been actively investing in the AI/ML area, especially in enterprise automation. This will also be the case for our new fund.

Movens Fund 2

Movens Capital has made significant progress in raising capital for our new fund. With a target size of EUR 60 million, the new fund is more than triple the size of our previous fund, which allows us to continue to drive innovation and support founders across CEE on a larger scale. Our main restriction for the first fund was a maximum investment size of EUR 1 million per company.

In Movens Fund 2, we will be able to support founders with more capital (up to EUR 5 million per company) and for a longer period, enabling them to address even more challenges. Simultaneously, by investing part of the portfolio at a later stage, we will be able to return funds to our limited partners much faster than with a classic early-stage fund.

In addition to the previously described focus on AI/ML, we have experience, expertise and a proven track record in several sectors, such as climatech, healthcare, fintech, e-commerce enablers, edtech or future of work. We are fans of network effects and open source, but we also believe that unique IP can be a source of solid business collateral in the future.

Our strength is our extensive support platform for portfolio companies in all areas crucial to the success of a startup (strategy, human resources (HR), go-to-market, fundraising or exit).

We encourage you to contact us about Movens Fund2, co-investment opportunities or companies raising funding rounds. You might contact Artur Banach, Radoslaw Rejman, or any other team member.