OTB Ventures has closed its second deeptech fund — a $185m vehicle — making it the largest fund to be raised in central eastern Europe.
It’s also one of the first funds — following in the footsteps of Germany’s Alpine Space Ventures — to have secured money from the NATO Innovation Fund (NIF), the alliance’s new €1bn vehicle to back dual-use technologies (innovations that can be used in both military and civilian settings).
Where will the money go?
With its second fund, OTB Ventures wants to continue to back startups in its four core areas: spacetech, enterprise automation, cybersecurity and fintech infrastructure.
Despite the investment from NIF, Marcin Hejka, the firm’s managing partner, stresses that the VC is not becoming a dedicated defence investor.
“More and more, the civilian technologies — in spacetech, in cybersecurity, in AI — find their application also in defence,” he says. “We’re not changing our strategy, we’ll continue to do what we’ve been doing so far. And NIF is pleased with our track record of finding very good deeptech companies whose solutions could also be applicable in defence.”
OTB Ventures has offices in Warsaw and Amsterdam. Unlike many other VCs with roots in CEE, OTB Ventures aims to invest beyond the region — while CEE will still remain “a significant part of their activity.”
“The most important thing for us is to choose the companies that have the most unique technologies, the best teams and the biggest potential to scale globally — whether this company is from Slovakia or France is not important for us,” says Adam Niewiński, the firm’s other managing partner.
He adds that the firm is attractive for founders and coinvestors from across the continent, thanks to its domain expertise and track record — especially in the sectors like spacetech and enterprise automation.
“It’s not like we're part of Europe’s B team. At least when it comes to our brand, we’re perceived as high quality, value-add European deeptech investors,” says Hejka.
The company wants to use its second fund to back 15-20 startups at Series A. Up to 10% of the money will be allocated to 10-12 investments at seed stage. The fund’s first tickets range from $1m-7m and more than 50% of the capital will be reserved for follow-ons.
What’s OTB Ventures track record like?
OTB Ventures has already invested in nine companies from its second fund, including productivity and task mining platform KYP.ai, AI chip producer SEMRON and space debris removal startup ClearSpace.
With its first $138m fund, launched in 2017, it invested in companies such as Polish-Finnish ICEYE, Poland’s Silent Eight and Lithuania’s kevin. It’s secured two exits: BabbleLabs, a startup that uses AI to remove background noise which was bought by Cisco in 2020, and process mining technology leader Minit, which has been acquired by Microsoft.
Who has OTB raised money from?
OTB says that its second fund has been significantly oversubscribed — after a first close in November 2022, it set its target at $150m.
In addition to NIF, its LPs include the European Investment Fund, Isomer Capital, Foundation for Polish Science, TDJ Venture, Marcin Zukowski, cofounder of Snowflake and OnDean, the family office started by Andrew Sieja, founder of software company Relativity.
