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vc of the month otb ventures by vestbee
14 February 2022·6 min read

OTB Ventures is the leading venture capital firm in CEE investing in early growth, post-product, high-tech start-ups developing unique technologies. Each of their partners have over 20 years of entrepreneurial and international venture capital experience, and a proven track record in supporting the expansion of start-ups across international markets. Its Co-founder and General Partner, Marcin Hejka 
spent 18 years at Intel Capital where he served as VP, a Global Investment Committee member and Managing Director responsible for EMEA and India. He was also an acting Investment Director for the CEE region with investments including AVG, Yandex, LogMeln,, among others.

Fund Strategy Overview 

Geography: Companies with links to Central-Eastern European talent, i.e. companies with Founder/Co-Founder from CEE or part of development located in the region.
Preferred industries: deep-tech projects where the business model is based on unique technology with a particular focus on (but not limited to) enterprise AI, Fintech Infrastructure, Space-tech, Cyber Security, IoT/Robotics, Green-tech. 
Investment ticket: Initial investment of 750k to 7.5M EUR
Company stage: Series A + Seed, and selected Series B
Product type: No preference
Product stage: Post-product
Revenues: Post-revenue for Series A, pre-revenue for Seed

Q&A with Marcin Hejka, Co-founder & General Partner

What are the 5 main things you look for in a startup?

At series A, which is our typical investment stage, we are looking for unique technology that is addressing the needs of a well-specified group of customers internationally or even better globally. Initial commercial traction is important. We are also looking at the expertise, experience and skills of the startup founders, which is absolutely critical element. At seed stage business traction is not required.

What disqualifies a startup as your potential investment target?

Companies betting on a single country or full relying on their domestic market are likely to be much less interesting. The technology market is by definition international/global, so there is no such thing as local technology. This is particularly important in Central Eastern Europe, the region which is very rich in talent, but at the same time small from the perspective of technology consumption. International expansion is the best and often the only way to scale the business and achieve successful exit for CEE startups. Strategy based only on local markets is super difficult bearing in mind the region is late adopting on both B2B and B2C sides. 

What in your opinion differentiates the best founders from the rest?

Best founders combine determination, ability to set a vision as well as execution skills needed to drive the growth of the business against all odds. The ability to attract the best local and international talent is also critical, as founders who are able to attract the best senior talent are most likely to achieve successful exits.

What startups should take into account before making a deal with a VC fund?

Founders should perform due diligence of potential investors the same way investors perform due diligence of startups before investing. There is a lot of money in the market and unfortunately not that many good investors. The quality and professionalism of the VC fund are super important. Also, founders need to take into consideration not only financial aspects, they should choose investors who can support them in building the business and avoid non-value-add  “passengers”.

What is your approach to startup valuation and preferable share in the company?

Our preferred stake is 10% to 15%, however, we can start from a lower percentage, i.e. 7% and build our position over multiple rounds of funding. In general, we do not want to be background noise, but we also understand the founders should have a sufficient stake that is usually reflected in their motivation. Moreover, we are aware that the company should have a sufficiently large ESOP to retain and attract talent. Regarding valuations, we follow the market practice.

How do you support your portfolio companies?

Throughout our carriers we have supported founders from the CEE region in international expansion. This involved opening doors to potential customers and partners as well as tailored support in identifying and attracting the right talent. Moreover, we help our companies to find the right additional investors with relevant expertise and network. We make sure that founders improve corporate governance, including identifying the right independent board members. Of course, the list is much longer, however, it depends on the specific needs of the company.

What are the best-performing companies in your portfolio?

Our portfolio is still young, but we already have a number of companies that stand out. Definitely worth mentioning are:

  • Iceye is the global leader of synthetic aperture radar satellites and already raised hundreds of millions of dollars from top global investors. Iceye satellites can perform Earth observation through clouds and in the night when traditional optical satellites don’t work.
  • Silent Eight has developed the leading technology automating AML processes for the largest global banks and financial institutions.
  • FintechOS is a leading provider of hyper-personalization software for financial institutions.
  • Our first exit, BabbleLabs acquired by Cisco Systems, has developed the leading noise reduction and speech enhancement technology.

The above list is not complete- we are super proud of all our founders!

What are your notable lessons learned from investments that didn’t work out as expected?

Regulations and market forces can have a huge impact on startups. In the last couple of years, we have seen privacy regulations like GDPR impacting companies which technologies were using certain personal data such as  location. Covid significantly impacted companies in numerous sectors, some of them negatively i.e. Horeca companies, some positively i.e. online commerce and logistic technologies by boosting innovations and digitalization. We also need to remember that business decisions of large corporations like Apple and Google may have a huge impact on startups operating in their ecosystem. Those are forces that are beyond the control of any startup or investor, are often impossible to predict, and can potentially kill or boost a business.

What are the hottest markets you currently look at as VC and where do you see the biggest hype?

There has never been a better time for technology innovations than nowadays - the last 10 years brought more innovations than the previous 50. We strongly believe in space technology, which has become one of our focus areas. Also, we see that Fintechs are worth observing as they keep revolutionalizing the financial sector and fast adoption of AI robotic software automation in an enterprise is gaining significance every day.

In your view, what are the key trends that will shape the European VC scene in the coming years?

We believe deep-tech will become a more prominent sector in the next decade. So far most European unicorns rely on the performance of the execution - i.e. ecommerce, marketplaces, micromobility companies, etc. Bearing in mind the significant scientific and technology research potential of Europe, we will see the growing prominence of deep tech in portfolios of leading VCs and among top European exits. This is a massive opportunity for Europe and CEE that can take the ecosystem to the next level and increase its global position.

Related Posts:

VC Of The Month - Almaz Capital (by Konrad Koncerewicz, Head of VC & Startups, Vestbee)

VC Of The Month - ScaleX Ventures (by Magdalena Balcerzak, Manager, Vestbee)

VC Of The Month - Revo Capital (by Magdalena Balcerzak, Manager, Vestbee)

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