The Warsaw office of New York-based investor ffVC has raised €32m of a new €60m fund — so far entirely from Japanese LPs.
The fund, the Polish office's third, is a joint venture with JBIC IG Partners, a Japanese investment advisory firm.
“Our mission is to build bridges between different regions: we’ve built a very good bridge between Europe and the US. We’re building the bridge between Japan and Europe and we’ll continue with this strategy in the upcoming years,” says Mariusz Adamski, partner at ffVC.
Where will the money go?
FfVC wants to back 16-22 startups at late seed and Series A. It’s interested in companies working on enterprise software, industrial tech and sustainability transformation, and based in Germany, Austria, Poland, the Czech Republic, Slovakia, Romania and Hungary.
Maciej Skarul, general partner at ffVC, says the plan is to distribute capital evenly across these markets. But he also realises that some countries may offer more solutions in certain areas than the others.
“This region isn’t homogenous,” he says.“Let’s be honest, in the area of sustainable transformation, we’ll naturally expect more interesting ventures from Germany and Austria.”
What’s ffVC’s track record?
FfVC was set up in 2008 in New York, but in 2019 it opened an office in Warsaw with its own team of partners and investors. In 2020, ffVC launched its first central eastern Europe-focused fund, in partnership with Poland’s state-owned Totalizator Sportowy, and has so far built a portfolio of nearly 20 European companies, including Estonian fintech Montonio and German energy data infrastructure startup Comgy.
In 2022, it also launched a €50m fund to support Ukrainian founders.
What’s the Japanese link all about?
JBIC IG and ffVC will manage the fund together. JBIC partners Masayuki Ohta and Taro Hizume will join the team at ffVC.
The new fund has so far been solely backed by Japanese LPs: Japan Bank for International Cooperation and several multinational Japanese companies. The fund is now in talks with other non-Japanese corporates and institutional investors.
They’re interested in tapping into CEE’s tech talent — while ffVC is keen to put startups in its portfolio on the radar of Japanese corporations and investors.
“The Japanese LPs have expressed keen interest in the engineering talent pool of the CEE region, which remains largely unexplored by Asian players. They anticipate forging strategic collaborations with startups in the region,” says Ohta.
Adamski says that Japan is both an economic powerhouse and “a difficult market to expand to”.
“We’ve figured that through a partnership we’re able to reach a wider group of potential investors but also companies that can work with our startups,” he says.
Skarul adds that ffVC's portfolio startups don’t have to have clear plans to expand to Japan but “should be ready to work with big corporations” either in Japan or in other parts of the world.
He also says such cooperation with Japan will mean that CEE gets noticed by the international investors.
“It [the region] is seen as attractive but also like a ‘rough diamond’ — it’s not a straightforward target, nor a straightforward investment region. It’s for those who are looking for more, for the undiscovered value that is not straightforward for the rest of the world,” he says.
