Eterus Capital lines up dealflow with EUR 10m left to deploy from EUR 40m fund

Ticket sizes range from EUR 500,000 to EUR 5m, with a sweet spot of EUR 2.5m, Kostik said. There is a strong appetite on the Slovak market for this level of investment, he added.

The fund invests in Slovak or Slovak-founded scaleable companies that are generating revenues at the growth stage, bringing them growth funding and support. This can include helping them expand internationally, invest into production, sales and marketing support or M&A, Kostik said.

It invests both into steady, established companies with good expansion prospects, as well as newer companies with more dynamic growth and that are aiming to be disruptive, he said.

Eterus Capital is blurring the line between private equity and venture capital, Kostik said, stressing that the fund does not invest into companies at the pre-seed or seed stage.

Founded in 2008, the firm is industry-agnostic and aims to be opportunistic, since the Slovak market is small, Kostik noted.

Its current portfolio of 10 companies includes mapping and navigation platform Sygic, taxi app Hopin, market research software company GroupSolver, online glasses retailer eyerim, and self-sustainable micro-home producer Ecocapsule.

The fund’s portfolio companies had combined revenues of more than EUR 100m in 2022, and EUR 180m in 2021, before it exited pharmaceutical and development company Saneca Pharmaceuticals, which generated annual revenues of around EUR 70m, he noted.

Most recently, it invested into cycling online retailer and portal MTBIKER. The company has the ambition to consolidate the fragmented sector, Kostik said. It had 2021 revenues of EUR 14m, according to Eterus Capital’s website.

In the case of some portfolio companies, bolt on acquisitions are an option, Kostik said. He pointed to the example of Saneca Pharmaceuticals, medical devices and equipment manufacturer Chirana T-Injecta and Sygic, which made add-on acquisitions.

The firm sources targets predominantly through its network and through word of mouth, Kostik said. It uses external lawyers and tax and financial advisers for “confirming due diligence“ to close deals, he said.

Eterus Capital, which has two institutional investors, also co-invests with other sponsors, Kostik said.

The war in Ukraine, the COVID-19 pandemic and the macroeconomic climate have made many entrepreneurs more uncertain about future pricing and budgets, meaning that they are more willing to discuss potential equity investments, Kostik said.

While there is a very healthy deal pipeline, there is hesitation on the market and deals are taking longer to close, he noted.

Eterus Capital has 15 people in its team. In addition to his role at Eterus, Kostik is also Director at investment banking and investment group WOOD & Company.

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