Tilia Impact on the market for EUR 32m early-stage fund

With a EUR 32m target, Tilia Impact Ventures 2 will be significantly larger than its predecessor, Tilia I, which raised EUR 2.5m.

The firm aims to hold a first close for the new fund on EUR 25m by March, followed by a final close at the end of 3Q23, Gray said. The vehicle, which has a hard cap target of EUR 35m, is open to institutional as well as high-net-worth individuals.

The impact-driven VC fund will focus on seed and series A investments with an intention of generating substantial societal and/or environmental impact alongside a financial return.

Investments
Fund II has an investment period of five years and will aim to make four to five investments annually. It is already in advanced talks with three potential targets, Gray said.

It aims to invest in 21 companies, with initial tickets of EUR 0.3m-EUR 1.5m, significantly more than the previous fund’s EUR 200,000 upper investment range, Gray said. It will then make some follow-on investments of up to EUR 1m in a single company, he said.

Building on its experience from Fund I, the firm's focus will be on projects with scalable impact mainly, but not exclusively, in four categories covering multiple goals from the United Nation’s Sustainable Development Goals framework: social inclusion and civic empowerment; environmental protection, circular economy, and sustainability; quality education; and health, including mental health, and access to healthcare.

Education, for example, can include retraining for people to meet staff shortages and current job market needs, Gray said.

The Czech Republic will account for 50% of investments, with the rest of the CEE region accounting for the other 50%, he said.

Its key target markets will be the Czech Republic, Poland, Austria, Hungary and Romania since Tilia has a particularly good network of contacts in these markets, Gray said. However, it is also open to opportunities across the region in markets such as the Baltics and the Balkans and even the UK, he said.

Deals will largely be sourced in-house through its network of contacts, with a lot of inbound approaches from contacts, Gray said. It also receives referrals from VC funds where prospects don’t match those other funds, he said.

Tilia plans to make one further investment via Fund I, Gray said. The vehicle has made eight investments, including MIWA Technologies, a Czech company which has developed a modern system for the distribution and sale of unwrapped goods that can save up to 90% of packaging materiál.

Other portfolio companies includes Deafcom, which has developed specialised solutions for barrier-free communication and accessible information for the deaf, and Datlab, a Czech IT company specializing in data extraction using complex data-mining tools and analysis to enhance transparency, efficiency and quality in public procurement and promote good practice.

Tilia has a team of six people, with an additional four Czech investment professionals on its investment committee.

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• Venture
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• impact investing