Revo Capital preps third fund for 2023 launch

With a focus in the CEE region and headquartered in the Netherlands, the firm has initiated talks with existing LPs ahead of a planned soft launch of its third fund in 2023 and a final close aimed for 2024. It hopes to attract a mix of private and public capital including blue-chip institutional LPs based in the US, Europe, MENA and Turkey, Bayrakdar said.

Revo Capital Fund II, which closed on EUR 90m in September 2021, received anchor commitments from German development bank Deutsche Investitions- und Entwicklungsgesellschaft (DEG), International Finance Corporation (IFC), the European Bank for Reconstruction and Development (EBRD), the European Investment Fund (EIF) and the Turkey Development Fund. In total, the fund had about 50 investors, including family offices, high-net-worth individual and financial institutions from Turkey, Bayrakdar said.

Established in 2013, Revo Capital has USD 156 million AUM in two investment vehicles, which target early and growth-stage startups in Turkey, Eastern Europe and Baltics. The firm has made 31 investments to-date and had 13 exits, Bayrakdar said.

Revo was the first institutional investor in Getir, the Turkey-based online grocery-delivery company which acquired its German competitor Gorillas in a USD 1.2 billion deal in December 2022. Among its notable exits are Foriba, a reg-tech startup sold to global tax software company Sovos, while Turkish PE Turkven-backed software company Mikro-Zirve, has acquired another Revo portfolio company, Parasut, a fintech SaaS startup, in May 2019, according to a Mergermarket report.

Investments
Fund III will have an investment period of five years and make 20 to 25 investments with average ticket sizes of EUR 2m-9m, Bayrakdar said. Around 20% of its capital will be earmarked for follow-on investments in existing portfolio companies, he noted. The exit period will also be five years and potential extension could be 1+1 year, he added.

While its first two funds were mostly deployed in post-seed rounds, preferably Series A and B funding rounds, the new vehicle will be more opportunistic on its approach and will also make seed-stage investments, Bayrakdar said.

Revo Capital focuses on six areas of technology, namely fintech, B2B cloud, marketplaces, big data and AI, marketing tech and health IT. It invests in Turkey, Eastern Europe and Baltic startups, while it can also consider US and Europe-based companies with research and development teams in those regions, he noted.

Revo also manages a EUR 15m fund of IFC and is doing co-investments with its LPs, like in the deal for a minority stake in the US-based CY Vision, a startup developing 3D augmented reality head-up displays for the automotive industry, and for New York-based biotech Massive Bio, Bayrakdar said.

Portfolio management
With 11 deals completed, Fund II has dry powder of around EUR 44m for investing in new companies and EUR 10m for follow-ons, which are expected to be deployed by the end of this year into five new tech investments as well as in funding rounds of portfolio companies, Bayrakdar said. The vehicle invests tickets of EUR 2m-9m on average.

Revo Capital Fund I, which closed on USD 66m in 2016, has made 19 investments and all are still operating, Bayrakdar said. Revo team is product oriented and has dedicated teams to support its portfolio companies in their growth, digital marketing, recruitment, business development as well as fundraising and exit efforts, he said.

Fund I has conducted 13 exits, besides partial divestments, and has seen some seven of its companies move headquarters to the US, Bayrakdar said. Its latest divestment was Onedio, which Mediazz acquired in late December. Logiwa and Figopara are some of its other exits.

[Editor's note: The last paragraph has been amended post-publication to clarify that Fund I has carried out 13 exits not seven, as stated earlier.]

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