Nation 1 launches new early-stage, EUR 35m-EUR 40m fund

With a first close planned for 1Q24, the new vehicle is looking to attract private investors from Western Europe as well as institutional investors and at least one bank.

The fund already has around EUR 10m in hard commitments and additional soft commitments, Moravec said, adding that much of this comes from investors from its first vehicle. Launched in 2019, Fund I raised EUR 35m from investors such as the European Investment Fund (EIF) as well as family offices and high-net-worth individuals from the Czech Republic and Slovakia.

Investments
Nation 1 will continue to focus on healthtech as well as human and environmental health, Moravec said. These key segments will account for 70% of deployment, with the other 30% planned for other sectors.

In addition to Czech Republic-based businesses and Czech founders of companies established abroad, Nation 1 will scout for targets in the former Yugoslavia, Bulgaria and Romania, Moravec said. Around 80% of the fund will be invested in Czech founders and the remainder into founders from other CEE markets, he added.

Nation 1 seeks companies with global potential, Moravec said. It could also invest in some companies with Ukrainian founders who are migrating to central and eastern Europe, including the Czech Republic, he said.

Moravec says Nation 1's main difference from other Czech VC firm is its aim to be a day-one investor, coming "super early", Moravec said. It is also more opportunistic and open to investing into B2C companies rather than focusing just on the B2B software segment, he said, adding that it looks for solid teams, good products and scalability.

Nation 1 initially deploys tickets of up to EUR 200,000 at the pre-seed stage, doubling and tripling the investments on the best companies, with follow-ons involving co-investors, Moravec said.

Ticket sizes will average EUR 0.5m, with a total investment of EUR 2m over several rounds into any one company, Moravec said. A maximum 15% of the total fund size will be invested into any company, he said.

Fund I
Nation 1's first fund is more than 50% invested and is expected to make around eight final deals this year. It could make two or three exits next year, Moravec said.

The firm has 30 companies in its portfolio, including Czech menstrual pants producer Snuggs, online psychotherapist session platform Hedepy, VR headset manufacturer VRgineers, diabetes digital program startup Vitadio and Daytrip, which offers tourists door-to-door transport.

It proactively sources targets through research including screening market data and organising events, as well as through its network and sometimes from other funds.

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