Tar Heel Capital Pathfinder, Knowledge Hub, Freya Capital, and Accelero Ventures have recently announced to join their investor forces as a VC funds’ coalition. The funds plan to offer Polish startups financing of up to €3.5 million (PLN 16 million), in addition to their independent investments. AIN.Capital talked with the representatives of Tar Heel Capital Pathfinder and Accelero Ventures to get more details about how the coalition works and how both startups and funds will benefit from it.
What is the coalition about
The newly formed coalition consists of four Polish VC funds, including Tar Heel Capital Pathfinder, Knowledge Hub, Freya Capital, and Accelero Ventures. Each of the funds can separately invest about €860,000 (PLN 4 million). Thanks to the coalition, the investment limit can reach €3.5 million (PLN 16 million) per one project.
“We would like to be able to better respond to the actual needs of startups. In current market conditions financial needs of projects at all stages, including seed, grow dynamically. Some of the companies that raised seed or pre-seed rounds 1-2 years ago might be running out of cash but, as they don’t qualify for Series A yet, they need bridge financing to keep growing,”
Radoslaw Czyrko, Managing Partner at Tar Heel Capital Pathfinder, told AIN.Capital.
Acting together, the funds can make the experience of raising this “enhanced” round much faster and smoother than if they were to reach out to four different investors separately.
How the coalition plans to invest
In total, the four VC funds are planning to spend up to €15 million (PLN 70 million) by the end of this year, investing these resources both in the projects financed by the coalition and individually. The joint investments will be made from the firms’ current funds. And each fund will be able to decide on the participation in each of the investments’ case by case.
“We would be very pleased to see 5-7 investments made as a partnership before the end of this year,”
Radoslaw said.
PFR Ventures will support the investments, as it participates in Tar Heel Capital Pathfinder, Knowledge Hub, Freya Capital, and Accelero Ventures as an investor. At the same time, the coalition is not connected to the PFT Starter program of PFR Ventures.
“It is the idea of the VCs that is parallel to the Starter program. It is led with the support of PFR Ventures,”
Krzysztof Berdzik, co-founder and Partner of Accelero Ventures, explained.
What are the benefits
From startups’ perspective, they get faster and smoother access to larger pools of capital. From the coalition’s perspective, this increases their dealflow, allowing to support more projects at different stages of growth.
“The union also broadens our investment horizon. It is quite broad already as we invest in startups from Poland and other European countries in various target industries, but together we can reach companies that haven’t been on our radar so far. We are very excited to see these new projects in our pipeline,”
Radoslaw commented.
Why is it important
According to PFR data, several hundred companies have obtained financing in Poland in the last two years. In the current economic situation, collecting more rounds may be a challenge for them. Due to the amount of funds sought, they may not be an interesting target for foreign funds, that leads to not achieving so needed traction.
An example of such a joint project that has recently been successfully implemented by the involved funds is the investment in PerfectBot, a company offering an AI-based chatbot supporting e-commerce customer service departments. It was carried out jointly by Tar Heel Capital Pathfinder and KnowledgeHub funds.
