VFF has around EUR 20m to deploy, considers fund volume and investment period increase

It plans to invest in five or six more companies this year, he said. It has an active pipeline of more than 20 companies and is in the final stage of the investment process with three targets, he said.

The fund is in talks with its investors – the European Investment Bank, the Slovak Ministry of Finance, the National Development Fund and Slovak Asset Management - to increase the fund by EUR 15m and extend the investment period.

It plans to invest into a total of between 25 and 30 companies, investment manager and board member Miriama Kovacova said.

Miriama Kovacova, Venture to Future Fund

The fund sees a healthy pipeline of more than 20 companies, Riha said. It is interested in co-investors for these promising targets but funding rounds can take longer to close in the current macroeconomic climate as co-investors often adopt a wait-and-see approach, he said.

There are a wealth of good companies and success stories in Slovakia, Riha said, noting the talented workforce and lower valuations than in other markets. Its intention is to fill the gap in available funding for Slovak companies at the late-seed to Series B investment stages and also to support the startup ecosystem and attract more foreign investors to Slovakia, Riha said.

VFF primarily focuses on future-oriented growth companies. It focuses on companies headquartered in Slovakia, or in other European Union countries but with a capital link such as subsidiaries, or relocating some operations such as IT or software development or research and development (R&D) to Slovakia, Riha said.

It is seeking companies with a strong innovative or technological element with the potential to expand abroad and become unicorns or at least leaders in their field, he said.

VFF’s ticket size can range from EUR 500,000 to EUR 4.8m in one round, with some funds available for follow-on investments, Riha said.

VFF invests at the late seed, Series A and Series B stages, always co-investing with others, he said. It acquires minority stakes, with the exact stake size being on a case-by-case scenario, he added.

In a small market such as Slovakia it makes sense to be sector agnostic, but the fund particularly likes high-tech industries such as robotics, software as a service (SaaS), fintech, foodtech and healthtech. It also wants to invest into companies disrupting and innovating the traditional agriculture and real estate sectors, Kovacova said.

The fund aims to have no more than 25% invested into any one sector, she said.

Portfolio growth
The fund has already invested in two companies this year: Product Fruits, a Czech digital adoption platform; and Nexineo, a Slovak company offering solutions for virtual classrooms. It also made a follow-on investment into AI company Photoneo Brightpick Group.

Its current portfolio comprises 10 companies including Sensoneo, a smart waste management solutions provider for cities and companies; AI-powered virtual assistants company Nettle AI, and SEC Technologies, which has developed a device for remote laser-based gas detection up to 6 kilometres away. The fund is currently considering follow-on investments for some of its portfolio companies, said Riha.

To date, the fund has made a partial exit from one unnamed company, he said. The fund began investing in 2020 and, with a planned lifetime of 10 years, there is no pressure to exit any of its companies, he added.

Instead, it can wait for an improvement in valuations, although it remains open to any inbound approaches about its portfolio, Riha said. There is still time to support its portfolio companies to enhance their activities and make them even more attractive to future investors, added Kovacova.

VFF mainly sources opportunities in-house, largely through direct inbound approaches from founders, as well as through its network, including advisers, events, and PR and marketing, Riha said. It often uses external advisers for due diligence and lawyers to close deals, he said.

VFF has three investment managers: Riha, Kovacova and vice chairman Martin Bansky.

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