bValue is a VC fund created by entrepreneurs for entrepreneurs investing in smart teams, solving real problems. bValue focuses on B2B data-driven and tech-enabled SaaS-preferred solutions within the CEE and CIS region. Portfolio companies can expect a founders-oriented approach, close cooperation and valuable support.
Fund Strategy Overview
Geography: CEE with global ambition
Preferred industries: Industry agnostic - we focus on B2B businesses that use technology in their value offering
Investment ticket: From €200k to €1M
Company stage: Seed
Product type: Data driven & Tech-enabled B2B, SaaS, e-commerce tools, martech, B2B automation/productivity also fintech, insurtech, marketplaces
Product stage: Usually post-launch, possibly pre-launch for more technological projects
Revenues: At least several months of revenue traction is preferred, but we do also pre-revenue deals as well
Q&A with Maciej Balsewicz, Co-Founder and Managing Partner
What are the 5 main things you look for in a startup?
Founders are essential as it takes great people to build great businesses; they are key, especially in startup’s early stages. Most important for us is to work with people who strive to learn and develop beyond their limitations. We do not necessarily look for those with great knowledge or experience but with the ability to realize what they don’t know and what they need to learn.
Product and technology are also crucial– we want to invest in solutions that bring real value to clients – e.g. it may be either better or new functionalities, lower price, improved user experience. The product should be backed by technology, so it is defensible against the competition.
Target market and the competitive landscape is another factor we take into account. We love when target markets are big enough for a high-growth startup to succeed. It is much easier to build a company in the growing market (e.g. e-commerce).
The fourth is a business model– despite investing at an early stage we are expecting founders to have a clear vision of a business model that allows for scalable growth and positive unit economics with a realistic path to profitability. The founders should have at least reasonable assumptions for their go-to-market strategy and key metrics.
Market, technological, social trends are also fundamental while making investment decisions – taking into account relatively short holding period of investment by a VC fund, the companies should be on the rising tide of trends, e.g. covid era favours businesses that work around e-commerce over hospitality.
What disqualifies a startup as your potential investment target?
We need to remember that VCs are looking for best projects that have the ability to scale fast and which offer the opportunity for a successful exit. There may be various reasons why VCs refrain from investing. As a general rule, a startup is out of the interest when there are low-quality founders with an uncompetitive product and without the vision of how to thrive.
What in your opinion differentiates the best founders from the rest?
Great founders learn a lot and learn fast while being open to new sources of inspiring knowledge. It’s like the “Super Mario Bros” video game when you always want to jump on the next level which is more difficult. Founders should be optimistic and proactive, have a clear long-term vision, and be brave enough to dream big.At the same time, they should be pragmatic in achieving set milestones. Founders need to be humble and open to listening and learning about everything they don't know. They should be moving towards building processes in the company and be mentally ready to delegate to other team members.
It is also helpful in being an outstanding founder if you have a strong entrepreneurial or corporate background, that gives the leverage to realize the vision. Moreover, they should be ready to go the extra mile to get things done right, even in difficult times.
What startups should take into account before making a deal with a VC fund?
They should understand the logic of a VC. We invest in companies with great growth potential that may increase in terms of business and valuation by multiple times in just a few years. This means that a startup must act really fast under pressure and be dynamic in all aspects of the business – team, sales, product.
Not all types of business are good for VC – for some of them, it is very difficult to scale due to the nature of business. If the founders prefer to grow at a moderate pace, the VC is not a good choice. Sometimes it is also reasonable to bootstrap when the business does not need so much financing and can quickly get to the BEP.
What is your approach to startup valuation and preferable share in the company?
We look at a valuation from the market value perspective. It means we compare a valuation to what is usually paid for this kind of an asset. On the other hand, the valuation should reflect the company’s growth potential. As an investor, we may be ready to pay high relative valuation (e.g. as calculated as multiple of revenues) but the business must offer very high growth perspectives to get return expected by high-risk VC capital.
With regards to the share in a company structure bValue considers 10-20% stake as reasonable. As an active investor, we want to be visible among the shareholders, while keeping in mind that due to investing at early stages our stake will be diluted within following investment rounds.
How do you support your portfolio companies?
We offer strategic guidance, operational support, exit facilitation including support in the optimization of the business model, marketing or even obtaining sales leads. We try to leverage our experience, knowledge and contacts for the benefit of the portfolio companies.
Our team has various backgrounds gained in advisory, the investment industry and in running a business. Moreover, we offer access to our advisors and venture partners who are among the best Polish entrepreneurs that created large businesses from scratch.
We also need to be aware that the company’s team members led by the founders are those who must do the job. The investor is kind of an advisor that may point out what could work better, either help to solve challenges or connect with the right people.
What are the best-performing companies in your portfolio?
Most of our companies are performing very well and are covid resistant or beneficiaries. Tidio seems to stand out not only in our portfolio but also within Poland, with continuous growth and cash efficiency. Other companies like Landingi, Deligoo, Senuto, PushPushGo, YourKaya should also be mentioned as very dynamic challengers. We also have a couple of very interesting companies we did not disclose to the public; this is our secret weapon ;).
What are your notable lessons learned from investments that didn’t work out as expected?
Sometimes more investors’ money does more harm than good and this should be perfectly aligned with company appetite and ability to grow. There is a thin line between being optimistic, dreaming big and overpromising your employees, investors and partners. One of the reasons for failures seems to be founders being overconfident of bullish assumptions. It may happen that in such a situation they tend to be wary of advice from outside stakeholders or experts and may stick too long with incorrect decisions.
What are the hottest markets you currently look at as the VC and where do you see the biggest hype?
bValue is a sector agnostic VC fund focused on the CEE region looking for opportunities from all sectors mainly from the B2B area. Every quarter, when identifying new fields of interest we dig deeper and look through the lenses of our and our advisors’ experience. We tend to be orbiting a lot around the e-commerce sphere, so the projects may be within marketing, delivery, logistics, optimization of processes, e-commerce tools or infrastructure. However, we also recognize fintech and open-banking as areas of great potential. Changes in this industry may lead to disruption of still traditional financial services.
That’s why we are open-minded and look also at other sectors in which we can find the next great companies that can be winners in global markets.
In your view, what are the key trends that will shape the European VC scene in the coming years?
Currently, Covid19 is impacting strongly the economy and people's habits. For many startups, it is considered as a positive factor that creates demand. Covid19 impacts faster digitization and encourages people to use new technologies and new business concepts. From our perspective, the majority of startups build products based on internet connectivity and online presence. The same is happening with commerce.
From the CEE perspective, we expect that the VC industry will become more professional. The VC scene in CEE has been boosted by public money (especially in Poland) in recent years and is still at quite an early stage. The effects of investments will be visible in the coming years.
Due to a larger volume of investments, we hope there will be global success stories originating from the region. This will encourage more people to start their own business and at the same time, global VCs will pay more attention to the CEE region.
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