Market One Capital raises new €80m fund to invest in market startups

Market One Capital raises new €80m fund to invest in market startups

Venture capital firms from Central and Eastern Europe (CEEC) usually focus on their own region, but Polish Market One Capital (MOC) is used to going well beyond that.

It is supported by Western European unicorns, such as German Tier scooter company and grocery delivery startup JOKRfounded in Berlin and now operating out of New York.

And it has just raised its second fund, of 80 million euros, to invest in more early-stage European network and market effect start-ups.

MOC is another example of venture capital based in the CEECs, with Czech Credo and Inovo Polishraising a new fund despite difficult conditions in the European venture capital market.

Competition in the West

When asked why a French or German startup should consider inviting a Polish VC to their capitalization table, MOC Managing Partner Marcin Zabielski joked, “And why not?”

But MOC also has a longer answer. “Winning business in Western Europe is much more difficult than in Central and Eastern Europe, but it is still possible when you have your specialization”, explains Marcin Kurek, also managing partner. “Being a generalist VC from Poland investing in the West is more difficult.”

MOC, which launched its first fund in 2018, specializes in investing in network effects companies – where the value of a product, service or platform increases simply because the number of increases. Almost 70% of the portfolio of the first MOC fund operates according to this model – these are mainly marketplaces, but there are also fintech and software startups.

This makes it much easier to “sell” MOC to Western European entrepreneurs, Kurek explains. “If you focus on marketplaces, if you have five, 10, 15 marketplaces in your portfolio, it’s easier to make a deal with another because you’ve gathered the knowledge. If you talk to a contractor early enough, know their market and understand their business, you can end up in very competitive deals. »

Around half of the first fund’s investments were made in Western European startups, including Tier and JOKR, French deeptech Pathway, UK fintech Silverbird and Dutch marketing platform Convious. MOC has also supported Poland’s most successful startups, such as medtech DocPlanner and edtech Brainly.

As a Polish VC, MOC also has leverage over its western peers: a unique understanding of the regional market. This knowledge can be crucial for startups looking to expand in Eastern Europe.

“For entrepreneurs creating marketplaces, the CEE is often a prime expansion market. It’s a big market they want to reach but they don’t have enough expertise. That’s why they are looking for partners from this region who will not only provide them with the capital, but also the network and help them to grow,” explains Zabielski.

Focus on seeds

With this new fund, MOC wishes to support around thirty new startups, mainly at the pre-seed and seed stage. The fund’s initial tickets range from €200k to €2m, with the ability to invest up to €8m in a single company.

A third of the new €80 million fund comes from the European Investment Fund. Many individual and family investors, mostly CEEC entrepreneurs, also contributed. The hard cap of the fund is 100 million euros and the partners are currently in talks with other investors.

Zabielski adds that by investing in Western European startups, which typically fetch higher valuations than Eastern European startups, MOC is positioning itself well in the eyes of its investors.

“Most of our LPs come from Central and Eastern Europe and for them it’s a good sign that we are investing in Western Europe,” he says. “Valuations are potentially higher and one could get higher returns.”

Zosia Wanat is Sifted’s Central and Eastern Europe reporter. She tweets from @zosiawanat

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