Spire Capital Partners holds EUR 57m first close for debut digital/tech fund

SCP is targeting a hard-cap of around EUR 100m before the final close in Q1 2024, Podziewski said.

In SCP's view, the recent downturn in technology valuations is a positive development as it has brought down to earth the expectations and the business goals of potential targets.

On the other hand, venture capital money that used to fuel the sector has largely dried up, and VCs still in the game are much more selective, Wierdak said. "Given the circumstances, founders of tech start-ups that had global aspirations are now scrambling to turn their companies into smaller, more geographically focused but profitable businesses," he said. As many of these businesses are still growing at double-digit rates, they represent an investment opportunity for SCP, he said. Indeed, many of the companies approached by the sponsor fall either into that category, or are bootstrapped businesses that had no prior experience with outside investors, Podziewski added.

Investors

The new vehicle attracted commitments from the European Investment Fund and the Polish Development Fund (PFR) as cornerstone investors, along with around 20 tickets from emerging Polish family offices, and some international investors, Konopiński said.

For the local family offices, the fund provides exposure to the fast-growing technology sector. Downside risk is limited thanks to the defensive cash-generative business models of the companies it is targeting and its portfolio diversification, Wierdak said.

The sponsor is also in talks with a number of institutional investors in Western Europe, Konopiński said. "Generally, we are approaching investors who know the CEE region already, are comfortable with the local environment, and do not need to be educated about the geopolitical or economic nuances," Podziewski added.

Investments

The sponsor is lining up investment targets from its preferred software development, e-commerce and tech-enabled services segments. SCP made its first investment in Polish contact centre software developer Thulium in mid-2022. It is in talks with a number of prospective targets, including three for which it placed initial offers, and is hoping to agree on one to two deals by the year-end, Konopiński said.

SCP aims to deploy equity tickets of EUR 7m-EUR 15m, addressing the gap between venture capital (VC) and private equity (PE) funding, Konopiński said. Typical targets in this space tend to be at an earlier stage of development and require a more hands-on approach from sponsors, which is why SCP is looking to build a relatively tight portfolio of seven to eight investments, he added.

The fund is focusing most of its time on Poland, as the biggest regional market, but its geographic footprint also extends to other CEE markets, particularly the Baltic states, Romania and Hungary.

The fund's team is well-placed to work with potential targets as it has an extensive prior background at some of CEE's most prominent PE firms, including the digital economy-focused MCI Capital, Innova Capital and Darby/Franklin Templeton, Podziewski said.

Over the past two years, the team has screened more than 100 potential targets, 70% of which were approached directly, or came about as a result of inbound approaches, Konopiński said.

People
Spire Capital Partners – Krzysztof Konopiński, Łukasz Wierdak, Arkadiusz Podziewski (partners).

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