Insights and opinions from Poland, Lithuania, Latvia, Estonia and Ukraine

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  • Interview: Simona Vasyte-Kudakauske of Perfection42

    Interview: Simona Vasyte-Kudakauske of Perfection42

    Simona Vasyte-Kudakauske is the CEO and co-founder of Perfection42. The Lithuanian startup develops new artificial intelligence capabilities for automating the process of creating 2D and 3D computer graphics. Seeing a startup tackle two of the hottest tech areas of the moment, video games and AI, we couldn’t resist asking Simona some questions about the market, Perfection42, and herself.

    Tell us about yourself. How did you end up in the startup world?

    If someone were to ask me how I got to where I am today, I would say it was luck. After graduating from university with a degree in molecular biology, I quickly realised that it wasn’t the career path for me. So, I decided to try my hand at something new: IT.

    I started out as a project manager in a small web design agency, where I learned the basics of the field. But it wasn’t until a chance encounter at a dance party that my luck really began to change. I met Kes, and we hit it off right away. He told me about his gaming startup and asked me to join as a co-founder.

    Fast forward to today, and Kes and I are still working together. In fact, this is our second venture as a co-founding team. It’s amazing how one chance meeting can change the course of your life. I feel incredibly lucky to have met Kes and to be able to work with him to bring our ideas to life.

    I’ve learned that sometimes the best things in life come from taking risks and seizing opportunities. 

    And what were you doing previous to Perfection42?

    Before starting Perfection42, Kes and I co-founded a gaming company called Outlander Studios. Our biggest success was a game called Battle Towers, which went on to be downloaded over 8 million times worldwide. It was an incredible experience, and we were both proud of what we had accomplished.

    However, after some time, I decided to take a new challenge and pursue a career as a product manager. I landed a role at Vinted, the Lithuanian unicorn, and was one of their first five product managers. It was a thrilling opportunity to work for a company that was transforming the second-hand fashion industry and making a positive impact on sustainability.

    Although I enjoyed my time at Vinted, I knew that my true passion lay elsewhere. So, Kes and I reunited to start Perfection42, where we are using our expertise to automate AI-based solutions and create real change in the industry.

    What does Perfection42 do, in plain language?

    Creators nowadays are expected to deliver ever-higher quality content, faster and cheaper than competition. We – amplify their creativity by automating mundane and time consuming tasks. Together with us, creators can focus on uniqueness while we – focus on productivity.

    What is your target market? Who would be your typical user?

    Perfection42’s target market is the animation, VFX, and video games market. 

    How big is this market?

    The latest industry research reveals that the market size for our industry was a staggering $419 billion in 2020. This is a testament to the increasing demand for the services we offer and the incredible growth potential of the industry.

    The research also projects that the industry size will continue to expand, with an estimated market size of USD 517 billion by 2027. This represents a Compound Annual Growth Rate (CAGR) of 3.1% during the period of 2021-2027.

    Tell us more about the technology you are using. How does it work? How long did it take you to develop it or reach an MVP?

    The company has two AI technologies, Graphical AI and Designer AI, that are being used in these industries.

    Graphical AI is an AI technology that automates high-quality animation and VFX creation. The AI learns the nuances and requirements of a project through Keyframes and then transforms the original input material to meet the project’s specifications. This technology can be used for a range of graphical tasks automation, including rotoscope automation, denoising, upscaling and others.

    Designer AI, on the other hand, is targeted toward gaming and allows for level creation automation. The technology enables game developers to create game levels quickly, freeing them from the tedious and time-consuming process of level creation.

    The journey of developing our technology has been a gradual process, spanning several years. The initial experiments commenced in 2018, with a strong focus on developing designer AI technology. As we continued to work on this technology, it became increasingly apparent that our approach was not as scalable as we would have preferred.

    This realisation led us to shift our focus towards graphical AI technology at the start of 2020. We realised that this new technology held the key to scalability, and would allow us to serve multiple clients simultaneously. Since then, we have made significant strides in developing and perfecting our graphical AI technology.

    You recently raised a round of funding. Tell us more – who led and participated, what will you use the funds for? What does it mean in Perfection42’s continued journey?

    Perfection42 has recently secured a Seed round of €1.1 million in funding from prominent early-stage investors, including venture capital funds CoInvest Capital and Open Circle Capital, the LitBAN business angels syndicate, and private investors.

    This investment marks a significant milestone for the company and represents a crucial step in realising its vision. The primary goal of this funding is to automate and scale up the company’s technology, allowing it to serve multiple clients simultaneously and make a significant impact in the industry.

    Perfection42 is also focused on strengthening its technical team and investing in sales and marketing channels to increase its brand presence and reach a wider audience. The company is committed to sharing its passion and commitment to excellence and is determined to achieve its goals with the support of its investors.

    How do you assess the startup ecosystem in Lithuania?

    The Lithuanian startup ecosystem is growing. It is exciting to see more successful companies emerging, including unicorns. These companies are producing highly skilled professionals who are making the whole ecosystem much more mature.

    If you could change one thing about the ecosystem for the better, what would it be?

    In the world of startups, the focus is often on success stories. However, it’s equally important to talk about failures, as they are an integral part of the learning process. No one is immune to failure, and accepting this fact is crucial in the journey of building a startup. Sharing stories of failure not only helps to normalise the idea that failure is a possibility, but it also encourages accountability. When entrepreneurs are willing to talk about their failures, they show a level of vulnerability and responsibility that can inspire others to do the same.

    What’s next for Simona and Perfection42?

    We are driven by a bold vision: to create a Photoshop for AI-solutions. We believe that automation and AI-based solutions are the key to unlocking new possibilities and transforming industries.

    Our recent Seed investment round is a significant milestone in our journey towards achieving this vision. It gives us the opportunity to take a small step forward in scaling up our technology and bringing it to a wider audience.

    Our primary goal now is to automate and scale up our technology. By doing so, we will be able to serve multiple clients simultaneously, making a significant impact in the industry. This will allow us to create more opportunities for businesses to leverage the power of automation and AI-based solutions to drive real results.

    In addition to automating and scaling up our technology, we are working hard to strengthen our technical team, investing in sales and marketing channels. Our aim is to increase our brand presence and reach a wider audience, sharing our passion and commitment to excellence.

    As we move forward, we remain committed to delivering innovative solutions, pushing the boundaries of what’s possible, and creating a better future for our clients and the industry as a whole.

    I am thrilled to be part of our team and excited about what we have achieved so far. However, this success also comes with additional responsibilities as a founder. I am committed to growing as fast as our startup, which means facing new challenges and opportunities with eagerness and determination. I am ready to take on whatever lies ahead and continue to push our startup towards even greater success.

    What’s the best way for people to stay updated with the latest from you?

    You can follow the Perfection42 LinkedIn page for more news from us.

  • Interview: Priit Lepasepp of Sunly

    Interview: Priit Lepasepp of Sunly

    Priit Lepasepp is the CEO & Founder of Sunly, an Estonian renewable energy company as well as an investor in renewable energy and electrification startups. Sunly, which develops renewable energy projects in the Baltics and Poland, was established by the 4Energia team following the sale of its shares to Enefit Green in 2018. At the time of its acquisition, 4Energia was the biggest renewable energy company in the Baltics. Today, Sunly is rapidly developing and building solar and wind parks in cooperation with communities as well as developing energy storage.

    Tell us about yourself. What were the steps that led you to founding Sunly?

    I’m from Haapsalu, a small town in Western Estonia. I studied law and worked at a law firm, but in 2011, I entered the renewable energy market as a general counsel for a renewable energy company. During that time, I gained valuable experience in the industry, which inspired me to lead Sunly when the opportunity arose.

    The founders, initial team, and investors of Sunly are renewable energy pioneers in the Baltic region. We saw a need for communities to transition from traditional energy production to renewable energy, so we started developing solar, wind, and storage projects to meet that demand.

    Could you explain to us what Sunly does, in a nutshell?
    Sunly is a renewable energy developer specializing in solar, wind, and storage. As an Independent Power Producer (IPP), we primarily build and operate renewable energy assets. We also provide engineering, procurement, and construction (EPC) services and operations and maintenance for other renewable energy companies.

    In addition, we invest 5% of our capital in energy transition startups, believing that the leading companies of the 2030s may not have been established yet.

    Founded only in 2019, you seem to be growing at meteoric speed. Sunly has raised large amounts not only for its own growth, but also to invest into cleantech startups, hardware no less. What has been the key in getting all the parts moving so quickly?
    Our success comes from having a dedicated team and supportive investors who believe in our holistic approach. We’ve been able to raise funds for growth and invest in cleantech startups without affecting our investors’ risk-weighting on their investments. Our capital raises have consistently led to significant growth.

    In terms of startup investments, what funds are currently investing, and what are you looking for in startups (founders, geography, sub-niches)?
    We focus on Energy Transition startups with founders deeply connected to the sector, primarily in the Baltics and Poland. For DeepTech CleanTech, having a grant pipeline is becoming essential for delivering breakthrough technologies.

    How do you assess the cleantech startup ecosystem in the Baltics / CEE?
    The ecosystem is expanding and becoming more collaborative. However, it needs more urgency, creativity, and flexibility at the investor level, as companies can take various forms, unlike typical IT startups.

    Structurally, is there anything lacking or that could be improved to facilitate innovation, deeptech/hardware startups and rollout of green energy?
    Credit facilities from banks or governments for early-stage hardware-led GreenTech startups are lacking. Loans with low interest rates and government backing for loan providers would help companies grow out of the “valley of death” and repay loans at maturity.

    What advice would you give to cleantech startup founders focusing on hardware looking to raise in 2023?
    Develop a product that meets market needs, find partners to finance development, and leverage grant pipelines for equity fundraising. Despite the challenges, it’s an excellent time to build GreenTech and Hardware startups, as more funding becomes available.

    With Europe’s energy dependence and the current global climate, what do you think are the most pressing next steps to tackle?
    Energy storage is crucial for accommodating the influx of renewable energy. Large commercial banks and governments need to support funding for large-scale storage projects. Moreover, more investors should be willing to assume construction risk for new technologies.

    What is lined up for Sunly in the next 12 months?
    We’ll focus on organizational growth, doubling our team, and making structural changes to prepare for future challenges. We’ll continue developing renewable energy projects in four countries, constructing new projects, and investing in startups.

    What’s the best way for people to stay updated with the latest from you?
    To stay updated with Sunly, follow us on LinkedIn, Instagram, Twitter, and Facebook, or visit our website at You can also find me on Twitter and LinkedIn.

  • Interview: Max Lysak of Mate academy

    Interview: Max Lysak of Mate academy

    Max Lysak is the co-founder & Chief Growth Officer at Mate academy, a Ukrainian EdTech startup turning anyone with the drive into software engineers. We had the pleasure of chatting with him about the story of their growth, the current situation with the war and where they want to go next. Max also gives us his advice for startup founders and his vision of education in the future.

    Tell us about yourself. How did you end up in the startup world?

    It wasn’t much of a choice, it was rather an obsession. Early in my career I wanted to build tech products but I couldn’t find people to do it with.

    That is how the idea of Startup Depot came up, a co-working for founders to tinker with their ideas. It was one of the first co-working spaces in Ukraine and also a business incubator where we tried to help innovative projects be realized. Afterwards I was a co-founder at IT Arena, which became one of Eastern Europe’s biggest tech conferences.

    And what were you doing previous to Mate academy?

    While working on Startup Depot and IT Arena, I met a lot of investors. One investor from the US shared with me a problem that he couldn’t solve for a long time. And I made his idea happen. So I raised an investor round for this fintech startup idea and moved to live in the US.

    Unfortunately, that idea didn’t find product market fit, so in the end, it didn’t succeed. But in the US I met my partners from today – Roman and Anna. At that moment Roman worked as an engineer at Google and Anna was doing an IT school project on her own. That’s how we met each other and together transformed an IT-school project into an Edtech startup – Mate academy.

    In a nutshell, can you break down for us what Mate academy is and how it works?

    Mate academy is an EdTech startup with a mission to help 1 million people become software engineers worldwide. We are determined to change how education in Computer Science works.

    Our main product is a technological LMS platform with automated processes where people learn coding. We provide the knowledge and skills required to get the first job in tech. Just in 4-6 months, 100% online. As a business model, we use the Income Share Agreement. It means that education is free until employment. After students get the job in tech they pay a percentage from their salary for 2 years. We have already placed more than 2000 students worldwide.

    What have been your biggest achievements so far?

    Firstly, we’ve changed the lives of 2000 people by helping them get a career in tech.

    Secondly, we not only continued to operate and grow our team during the full-scale war but even started to operate globally and opened an office in Poland. Even despite such challenges as blackouts, and working at the bomb shelters we could still grow and help people get new jobs in tech.

    How do you assess the startup ecosystem in Ukraine at the moment?

    Pre-war time was booming. I’ve seen lots of great projects being started. We historically lacked angel rounds in Ukraine, and only those who could bootstrap their companies survived. Typically a startup in Ukraine was raising funds only after it reached $10k MRR. But it was different in 2020-2022, there were deals. Partially thanks to governmental support from the Startup Fund, which I think did a great job.

    With war, everything changed. Unpredictability which it brought made many people stop doing their own thing and find a job to be able to support themselves and donate to the army. Now we try to hire ex-founders because they are the best people to work with.

    How are you coping with the war? Is there some advice that could be useful to other Ukrainian startups?

    Mate academy donated $220,000 to the Ukrainian Armed Forces and humanitarian support. Our employees help individual battalions by purchasing and delivering bulletproof vests and other necessary items. For all those who join the Ukrainian Armed Forces since the beginning of the full-scale Russian invasion, Mate academy provides training free of charge without paying any interest on salaries.

    On the other hand, we grow new developers, engineers, and others related to IT specialists that help to keep the Ukrainian tech labor market afloat. State universities in Ukraine can’t train enough young quality specialists who could suit all market needs. That’s why we keep up to date with all tech trends and requirements from companies to give our students the best experience and skills. As a result, our employment rate is 85-90%.

    In terms of advice for other Ukrainian startups. Think globally. Build your products and distribution in multiple geographies. Become more anti-fragile. Tough times produce great people. Grit mode on. Onwards!

    If you could change one thing about the Ukrainian startup ecosystem for better, what would it be?

    More angel rounds. Repeat policies that Estonia and Israel did in their countries to foster entrepreneurship.

    Let’s talk about education. Many believe the state of education to be outdated and more relevant for the industrial revolution era than today. But alternative education systems have failed to materialise in the mainstream so far. How do you see education changing in the next years or decades, and what role can startups play?

    Education will be subject to power laws. Students won’t learn from the best/only math teacher in their city/village. They will learn from the best at operating their language thanks to phone and wifi access.

    Also, a lot of changes will be the result of AI’s impact. Especially in terms of personalization and global access. I just share some of my predictions.

    Artificial Intelligence will automate operation routines for teachers and give them more time to do their primary work of teaching without being bothered with administrative tasks.

    Moreover, AI will be useful to help teachers make the program better based on students’ progress. It can point out places where courses need to improve. For example, AI will be able to identify when some students miss specific questions. By alerting the teachers, they know they have to reteach the material because the students don’t understand it yet.

    One more crucial thing, AI will ensure that educational software is personalized for individuals. Something like custom-tailored education through AI. That is why teachers will help students only when they need it.

    For students, AI-powered chatbots can work as assistants to provide answers to their queries at any time. It means 24/7 access to feedback for them.

    And, for sure, we do not need to underestimate global access thanks to AI functions.

    Implementing such features as AI translators in educational classrooms can become globally available to all students through AI tools, even those that have hearing or visual impairment or speak different languages.

    What’s in store for Max and Mate academy in 2023?

    1. Building a strong leadership team (maybe hiring more ex-founders)
    2. Donating heavily to Ukrainian Armed Forces
    3. Becoming more anti-fragile by building distribution in other geographies (helping people built career in tech in many countries)  

    When it comes to personal goals I want to hit a gym 3x a week and return my sleep to pre-war quality (It got substantially worse in the last year and I need to fix it to operate on a prime level). I track it with an Oura ring.

    What is the best way for people to stay updated with the latest from you and Mate academy?

    Follow Mate academy social media channels. I’m not writing much these days, but my Mate academy co-founder Roman Apostol is doing a great job at what we are up to in his Facebook and LinkedIn pages.

  • Interview: Uldis Tēraudkalns of Nexpay

    Interview: Uldis Tēraudkalns of Nexpay

    Uldis Tēraudkalns is the CEO of Nexpay, a fintech startup based out of Lithuania. Nexpay is one of the fastest growing Lithuanian fintechs, and in the top 5 in terms of transaction volumes. Uldis is also the host of The Pursuit of Scrappiness, the most listened business podcast in the Baltics. As its co-host, he has had the opportunity to pick the minds of the the Baltics’ and Europe’s hottest startups and scaleups, but also many new, up-and-coming founders and guests from the likes of Intel or Mindvalley.

    How did you end up in the world of startups?

    My professional career started in corporate banking and private equity. It is probably a pretty typical path for those founders who are now advancing their fintech startups.

    After my undergraduate degree at the Stockholm School of Economics in Riga, I had some experience in corporate banking at SEB. Having always felt the limits of big corporations and traditional banking were too narrow, I moved to Stockholm to get a master’s degree in finance.

    After returning to Latvia, my journey into the world of blockchain and cryptocurrencies began, so a fintech startup was a logical extension of this quest. At the same time, working in private equity has introduced me to different types of companies and leadership styles, and I can now apply this experience as I stand at the helm of Nexpay. 

    Tell us about The Pursuit of Scrappiness. What motivated you to start it?

    We launched the Pursuit of Scrappiness together with my co-host Janis Zeps in March 2021 as a hobby primarily. And now we are approaching almost 100 episodes.

    Initially, the idea was to talk with Baltic startup founders and business leaders about their secrets of success and valuable tips, perhaps to inspire somebody by our guests’ examples. The scrappier, the better – “actionable insight for anyone” is our top priority. We have deliberately made our podcast in English to be in tune with the wider European startup community.

    Not only to be able to invite guests like the founder of Mindvalley Vishen Lakhian or even Intel’s CFO David Zinsner (yes, we had them on the air), but also to expose the Baltic founders themselves and our startup “kitchen” to the world to a greater extent.

    After almost 100 episodes, what were the biggest findings from speaking to your guests?

    Baltic unicorns such as Bolt and Pipedrive have been represented, as well as up-and-coming startups like Jeff and Fractory. Investors, particularly VC and angel investors investing in Eastern Europe, can be frequently found on the pod. 

    We’re expanding our focus more broadly across Europe but don’t exclude notable global guests. Janis and I are certainly trying to be serious, but sometimes, the show feels like the equivalent of a whiskey conversation between friends, a more relaxed, authentic approach that seems to work well.

    Perhaps our most remarkable finding is that the scrappiness can be found in more than just “unicorning”. Even failed trials and setbacks are also achievements in your life’s piggy bank. We’re aiming to talk to our guests not only and not so much about business but also their lifestyle and values, family-work balance, and personal growth.

    By the way, one of our most successful episodes was not about business at all. It was with Aigars Lauzis, the Founder, CEO and Designer of BeTRITON – an amphibious camper-trike, namely a vehicle that lets you drive on the road and sleep on the water. How could anyone think of such a thing? As it turns out, the inspiration for creating this staff came when Aigars decided to cycle 30000 km from London to Shanghai.

    Our guests’ unconventionality, uniqueness and creativity are what precisely inspire us as hosts and what we want to share with our listeners.

    Is there something that you would say characterises the Baltic founder?

    More often than not, “scrappy” and a tendency to think globally are precisely the words that can be used to describe the Baltic founders in the sense that they always have to think about achieving maximum results with limited resources.

    Historically, that might have been because of the narrow market size and restricted availability of venture capital funding. In general, as for me, founders in the Baltics are also more down-to-earth. What really matters to them is the result, not only the process – making more money first instead of just spending it.

    How valuable is podcasting to communities such as startup founders?

    The Baltic startup ecosystem as a whole is a defined network and a fairly tight community, where if you don’t know someone personally, you definitely are able to get them through a handshake or two.

    So, we like to think that PoS is one of the public voices of such a community and a kind of stage for exchanging views and experiences. Starting your startup, like launching any business, as well as navigating your team through perma-crisis, is a real challenge. And it would be best if you weren’t alone along this way. You have someone to look up to, to lead by example, and to ask for advice. That’s the goal of our podcast – so that everyone can find their scrappiness.

    Let’s switch to Nexpay now. What does Nexpay do, in brief?

    In short, Nexpay is a fintech startup that provides banking infrastructure for digital businesses. Our API enables businesses to offer their customers seamless integration between Nexpay and their systems, leveraging a range of payment, account, and other products developed by us.

    With our banking and industry experts team, we aim to help our customers build new solutions with reliable, convenient, and robust alternatives to legacy financial institutions.

    Nexpay is a licensed Electronic Money Institution authorised and regulated by the Bank of Lithuania.

    What type of companies does Nexpay serve exactly, and why don’t banks want to take them?

    We provide banking services and infrastructure for the digital assets industry, forex providers, and gambling and gaming platforms, and other online industries.

    To date, Nexpay is processing over €2 billion annually, and we have helped over 600 businesses build what we call the future of digital payments infrastructure. These are challenging times for the economy, especially for digital assets, but we believe the future of money is closely intertwined with technology.

    And I’m excited about the role we are playing in empowering fintech companies and other market participants to drive innovation.

    What have been your biggest challenges with Nexpay? And your biggest victories?

    Nurturing a fintech startup in today’s economic perfect storm, every victory is like conquering Mount Everest, while every mistake can lead to a Titanic situation.

    Probably because of my Nordic character, what is important to me is not certain leaps but systematic thinking, measured approaches, and strategy in my work. This approach has enabled Nexpay to achieve a €5 billion value of serviced payments as of July 2022, operating in more than 30 countries across a range of different industries.

    How would you assess this difficult moment in time for the digital assets industry?

    What today many observers call “crypto winter” is nothing more than a particular cyclical nature of cryptocurrencies, which means its popularity rises strongly in growth periods, and in slower periods, the curve isn’t as drastic. The current devaluation – about 75% at the lowest point so far – is just the latest in a series of wild price gyrations.

    In 2013/14, bitcoin declined from $1,127 to $172 (85%). In 2018, the collapse was 80% from the peak. It’s fair to say that the intensity of these waves has been hair-raising for anyone holding cryptos. 

    What differs in the current situation from the previous cycles is that our entire world is broken geo-politically and economically. We are living through events that happen once in a lifetime, and we are experiencing multiple such events simultaneously. So it would not be a surprise if the current down-cycle lasts longer and is even more erratic than we’ve seen before. The overall feeling is more extensive uncertainty than usual, with investors searching for the appropriate actions to circumvent that. 

    Bitcoin investors who have been through a couple of cycles went into this cycle expecting the previous pattern, which hasn’t happened, and thus the future price movements for Bitcoin and other cryptocurrencies are very unclear. 

    For other digital currencies, of course, this effect is similar, only multiplied, as Bitcoin, the flagship digital currency, is assumed to be more stable than the other coins.  Possibly the fact that we have a more developed crypto market than during the previous cycle plays in the dynamics of this cycle as well.

    Why did you choose Lithuania for Nexpay? Was Latvia a consideration at all?

    When we launched Nexpay 5 years ago, in terms of fintech and general business legislation, Lithuania was much more advanced than Latvia. The local fintech sector has built a reputable brand, and government policy has helped Lithuania establish itself as a fintech-friendly country in terms of regulation and the entire ecosystem.

    The Bank of Lithuania has increased its competence to oversee cutting-edge financial services. Thanks to the country’s advanced regulation, a large number of fintech sector participants have operated in the country, creating one of the best ecosystems in the world. Not just the licensing but also the payments infrastructure that the Bank of Lithuania offers is also the best in Europe, attracting many companies.

    Currently, the situation in Latvia is much better, but still, for the fintech industry as a whole, Lithuania remains at the top of the list.

    If you could change one thing about the Baltic ecosystems for the better, what would it be?

    I think a broader cross-Baltic collaboration to encourage business between the countries could be beneficial. Of course, due to the EU, we have seen this to some extent, and right now, it’s easier to move between countries than ever.

    However, I would like to see more examples of all Baltic countries working together to make it even easier for businesses to move across the region. Lithuania has had a good track record of attracting the fintech industry. Estonia took the top spot for the 5th Anti-Money Laundering Directive as the country with the most advanced regulation and more straightforward setup.

    Adoption of crypto regulation here combined with ease of doing business, accelerated by the e-residency program. At the same time, Latvia has had a fair share of success stories in attracting and growing considerable business successes. There is a potential for working together to attract businesses to the region instead of each country fighting for itself.

    What’s next for Uldis, Nexpay and The Pursuit of Scrappiness?

    Although Nexpay already has an established brand in the markets where we operate, there is still a lot of market share to grow, and that is what we will focus on, offering new products, excellent service and long-term relationships.

    The podcast is nascent, with a dedicated audience and a well-defined niche. We are looking for ways to expand the audience, deepen the quality of the conversations and overall make an excellent educational and entertainment product.

    As for me personally, I’m motivated to keep building our teams and adding fuel to this fire.

    What is the best way for people to stay updated with the latest from you?

    You can subscribe to my personal Twitter and LinkedIn accounts, as well as on updates from Nexpay (Twitter, LI, Facebook) and Pursuit of Scrappiness (Twitter, LI)

  • Interview: Andreas Velling of Fractory

    Interview: Andreas Velling of Fractory

    Andreas Velling is CMO at Fractory, a cloud manufacturing platform that connects engineering companies with the manufacturers in real-time. Andreas is a mechanical engineer by trade, but gravitated to marketing thanks to his love of writing, which also shines through in Fractory’s content marketing and blog. We caught up with the engineer-turned-marketer to find out more about the Estonian startup.

    How did you end up in the startup world and what were you doing previous to Fractory?

    I actually studied to become a mechanical engineer and worked as one for 5 years, designing machinery for pellet factories in Estonia and the cut flower industry in the Netherlands. So I consider myself to be pretty organised (except for my desk).

    At the same time, my wife was working for an Estonian startup. It was evident that her job was much more chaotic. And it felt very appealing to me as the unexpected brings on exciting challenges, something very different from structured engineering work.

    In 2017 I learned that my friend from university, Martin Vares, had created his own startup – Fractory. The business itself made a lot of sense and I thought this might be my way into the chaos. He didn’t have a vacancy for a sales engineer, as those positions had been filled already. So I joined as a marketer instead even though I had no previous experience in marketing.

    What does Fractory do, and what is its business model?

    Fractory is an automated on-demand manufacturing platform connecting engineers and manufacturing companies. We provide access to manufacturing processes online, including laser, sheet and tube cutting, metal bending, surface treatment and CNC machining. At the same time, we don’t own any manufacturing equipment ourselves. Rather, we use partners for producing the parts while taking full responsibility for the whole process from quoting to delivery. And act as the only point of contact for the customer.

    There is a lot of manufacturing capacity available at any given time but engineers do not know where to look for it. For example, in the Nordics region we are partnered with 70 manufacturing companies as suppliers. So we are also introducing efficiency by directing the work to partners who have the resources, skillset, raw material, etc. for a certain job. We just add a small markup to each order but for the customer, it evens out as we are probably able to find a better price on the market than they themselves could.

    Who are your customers?

    Our focus is on B2B engineering and manufacturing companies. A lot of our customers are actually manufacturers themselves, similar to our suppliers, who need help with a set of parts they cannot produce in-house.

    But we have all kinds of clients from DIY builders to Fortune 500 enterprises. The projects also vary from simple laser-cut art to large welded aluminium boat frames.

    What does the process look like from need to delivery, for someone ordering through Fractory?

    They create an account, upload their 3D models to the platform, get an instant price and pay. In a matter of minutes. And now they wait until we deliver the parts on the promised date.

    And that’s very different from how it usually goes. No need for manufacturing drawings, sending out emails, waiting for quotes for days, etc. This process is what made sense to me and why I wanted to join. We are removing a lot of friction.

    Could you tell us more about the state of innovation in manufacturing? How difficult is it to break into, as a startup, and what role can startups play in this industry?

    It’s a funny thing. Engineers create innovation in their everyday work. But their everyday work is seldom innovated on.

    There’s always something going on but it takes a long time from the first working version to implementation. Just look at 3D printing. Or how IoT is still the central topic of every engineering conference.

    I’d say engineers are pretty skeptical, especially when it comes to new things that promise to be a lot better than what they’re used to. Which is pretty much the definition of a startup. So it can be challenging in that sense but at the same time the scarcity of real innovation in the space leaves room for getting through that wall of skepticism.

    That’s why I think there’s actually quite an opportunity in the industry for startups looking to improve something. Or redefine something.

    Estonia is a hugely successful startup breeding ground. What were the advantages of starting there, and what was the rationale for moving the HQ to Manchester?

    I’m not the founder. But from my point of view, the advantages lie with being a “hugely successful startup breeding ground” and Estonia’s size. Meaning that someone knowledgeable, someone who’s been through it all is just around the corner and chances are that you’ll get through to them. Startups move fast and it can be hard to keep up. The possibility to ask for advice at certain points can nudge you in the right direction. So it makes sense to start from here.

    The UK is, of course, a much bigger market when it comes to manufacturing. A traditional industry requires relationship-building and being present. So it’s that simple I think.

    What is lined up for Fractory in the next 12 months?

    Our focus will be on increasing our market share in our existing target markets. All the while, the product will be evolving in directions that are very exciting. Hopefully, we’ll soon be able to introduce those advancements to the wider public.

    What’s the best way for people to stay updated with the latest from you?

    You can just follow us on social media – Facebook and LinkedIn mostly. Or if you’re an engineer, go check out our blog.

  • Interview: Cristobal Alonso of Startup Wise Guys

    Interview: Cristobal Alonso of Startup Wise Guys

    Cristobal Alonso is a serial entrepreneur and early-stage startup investor that leads Startup Wise Guys, Europe’s most experienced B2B accelerator-fund, as their Global CEO. Cristobal is hands on with coaching startups, focusing on purpose, culture and fundraising. He is also co-author of Perform, the Unsexy Truth of (Startup) Success, a Tim Ferriss-like book in which he makes sense of lessons from successful (startup) founders.

    How did you end up in the startup world to begin with?

    I have always been driven by the entrepreneurial spirit instilled in me by my grandfather and father – they were both entrepreneurs. I genuinely believe that business is a force for good, helping to promote and grow an economy that is financially sustainable and contributes positively to society by providing jobs and tax revenue. 

    I came to Startup Wise Guys with over two decades of experience in business leadership and investment. As Global CEO, I lead the efforts to expand the our reach and launching partner acceleration programmes across Europe and Africa.

    It is positively contagious to be working with hundreds of young, passionate founders and helping them on their way to scale their businesses and make a difference.

    And what were you doing just previous to Startup Wise Guys?

    After getting my start in business consulting with Accenture, I honed my craft in the telecommunications industry, first overseeing the UK expansion of Greenwich Consulting. Then I moved to Prague, where I led the acquisition of Oskar by Vodafone, an experience that laid the foundations of an extensive business network in Eastern Europe.

    Following an interlude which brought me to the world of startups — successfully leading Spanish startup mmCHANNEL through Series A funding of €2 million — I headed back East, taking over as CTO of Baltic-based Bite Group, leading a team of more than 200. C-level stints at Norwegian multinational Telenor were followed by another successful startup venture, this time joining MoboFree (Lithuania-based startup) and helping it grow to the biggest mobile social marketplace in Africa. 

    By the way, I’m also an INSEAD MBA graduate and president of the Spanish INSEAD alumni association, as well as a former professional basketball player.

    What does it actually mean to be an accelerator-fund?

    You can look at this question from different sides. For a startup, it means that we are a relatively easily accessible investment and extra brains at an early stage of their development. We usually are one of the first investors in most of our portfolio startups, or you can also say – first believers. On the other hand, for us, it means really getting our hands dirty (in the best possible way). We invest and help startups so early that it is both hard work but also bears amazing fruit if the startups grow successfully.

    Typically when people hear the word accelerator, they imagine an equity-free “incubator-like” program. It’s where the word “fund” comes in – and it indicates that we both run excellent mentorship programs but also invest and provide long-term support after the investment.

    Our accelerator program is vertically focused on giving the most added value to startups. It is up to 22 weeks long, taking place in a hybrid model with 10% on-site and 90% online attendance. We help startups with their most pressing needs to build up traction and develop the companies, so they are prepared for the next round of funding, where their valuation is much higher.

    Accelerator funds also get the opportunity to follow on their investments in these rounds or perform direct investments if the company is performing well enough.

    How much do you invest in each startup?

    This amount has varied and increased dramatically in the last 5 years. In 2017 we would invest €20-25k and take equity on a percentage basis (around 8%).

    Nowadays, we invest up to €100k, giving €30k for the program participation and €70k net cash directly to the company. The companies entering our programs are valued at around €500 thousand to €2 million, and we exchange money for equity in the following range: 3% to 9%.

    The maximum invested in a company could be around €400k, including follow-on rounds. In our approach, we like to involve other investors, making the investor pool larger. 

    What are you looking for in startups?

    Although we do have specific geographic locations where we invite startups for the on-site program part, we are geographically agnostic and are proud to have more than 60 nationalities among our almost 350 portfolio startups.

    Our most robust footprint historically has been in Central and Eastern Europe. However, with the impact of Covid-19 and moving the program primarily online, lately, we have received applications and invested in startups also from Latin America, the US, Australia and more.

    SWG has offices in Estonia, Spain and Italy. We are also represented with partners and programs in the Baltics, Poland, Ukraine, Turkey, Denmark, Romania, and numerous African countries.  

    With very few exceptions, we invest in business-to-business (B2B) startups. Regarding verticals, our programmes mainly focus on SaaS, fintech, cybersecurity, XR, and sustainability, and we are about to launch new verticals early next year. For instance, our team has just finished a new program in Malaga focusing exclusively on augmented reality, extended reality, and virtual reality software startups, aka XR.

    Sustainability became a meaningful focus for us in the previous year. I see it as a vital pivot which saw sustainability becoming its own “vertical” tackled in acceleration – but also baked into everything they do as an accelerator and investor. Furthermore, SWG has currently undergone an internal audit, incorporating SDGs and accountability processes into our activities.

    And what does SWG look for in founding teams?

    Although traction and other business metrics are assessed, SWG focuses on founder personalities, team dynamics and matching our values. Therefore, the process for pre-selected teams involves a lot of online interviews with our team. These calls are usually a form of mentoring and giving valuable feedback, even if the team isn’t selected. Unlike other accelerators, the SWG team is very people- and team-oriented. So there is a lot of human interaction with founders. 

    Why should startups choose SWG?

    We basically support startup founders from cradle to exit and provide access not only to knowledge and capital, but also to a thriving, truly global community of other founders, mentors and investors.

    We’ve been running accelerators for ten years, constantly iterating and listening to founders’ feedback. Beyond accelerating and investing in startups, we are passionate about helping early-stage founders to become business leaders. This approach is a significant change compared to the past, as initially, Startup Wise Guys and other early European accelerators were focused on pure sales and business skills. 

    We have a saying at SWG, “you will never walk alone”. It means that after the 5-month accelerator program, the support continues. While during the programs, startups mostly appreciate the knowledge and mentor support, in the after-care, they value the highest help on further fundraising, ongoing business and personal advising, a sizeable international peer community (700+ founders from all over the world) and a broad network of investors. 

    Could you give us your take on the CEE ecosystem today? And in the next 5 years?

    I would say we are in the 3.0 era of the CEE ecosystem. We started in ecosystems with little capital and experience but many startup ideas. We gained access to more government capital funds in the second period. However, this capital was also tied with many restrictions, registrations and regulations. Anyway, it helped many founders understand the game, allowing GPs to develop. In the third iteration, many funds have disappeared, leaving the surviving funds, those who have managed to raise the most money and experience. 

    Currently, there is much less money available for early-stage startups since only a few accelerators have managed to survive and create successful funds. Furthermore, angels are not getting too involved with this market environment, which leads to the struggle of many companies. There are a lot of “dry-powder” funds that have raised money in the last two years that need to invest, so let’s see. 

    What we predict is that the companies who will get investment will get a lot more money than anticipated, at the expense of funding a more extensive array of startups. Therefore we expect companies to take up to two years before hitting steady growth rates. We are still very optimistic about the CEE market. The value for money is still better than in other markets. The valuation of companies is much more realistic than in other countries, and we believe that in the months and years to come, a lot more funding will come from overseas. 

    How are Startup Wise Guys’ operations outside of CEE going?

    We have offices and programs in Italy and Spain, as well as a fully online program in Africa. Interestingly enough, if you compare the Baltics, especially Estonia, to Western European countries where we have started operating, there’s so much they can learn from Baltic founders and ecosystems. On the other hand, they have the scale that the Baltics and some CEE countries lack. Spain also has solid connections and expansion potential with Latin America.

    Our portfolio setup is still very much CEE driven, so our top invested countries are Estonia, Ukraine, Lithuania, Latvia and Turkey. However, Italy is catching up as we made almost 20 investments in Italian companies due to our expansion there in 2020. 

    High expectations have also been placed on our African programme, the second having started in October. Selected B2B SaaS startups are offered access to €65k in funding and an intensive five months of mentorship. This year we have already held the first edition of this programme and saw a very high level of activity in the region and significant prospects for the domestic startup ecosystem.

    What startups from your portfolio are you most excited about?

    It is difficult to identify some companies in our portfolio – they are all unique and promising for us. To date, our accelerator has made more than 350 startup investments, seen 13 major exits, and achieved an overall startup survival and success rate above 80%.

    From the latest batches, I would single out Estonian startup Wolf3D, aka Ready Player Me, that enables creating an avatar from a single photo. They have received accelerator and follow-on funding from SWG and recently raised a €56M round led by a16z.

    Other bright stars in our portfolio include Estonian farm management startup Vitalfields (from Batch 1, was acquired in 2016 by Monsanto-owned The Climate Corporation bringing high returns to our first fund) and Soter Analytics, which provides AI-driven end-to-end safety solutions (€13.8M total funding so far). Ondato and Fractory also have considerable potential.

    Startup Wise Guys also makes direct fund investments (without the accelerator program), and we are proud of the success of these companies – from the Estonian unicorn Bolt to Vochi that exited to Pinterest, as well as Baltic superstars such as Skeleton, Planet42, Jeff App, and others.

    What advice would you give to startup founders in these turbulent times?

    Over the years, I have seen too many founders making the mistake of building companies for investors, not customers. When the investment scene or economy slows down in turbulent times, these are usually the first ones to die.

    Therefore I would nudge founders to create a business that is extracting and giving value to their customers, with a profitable business model capable of funding its growth. To understand your business model, outline a path to profitability from day one. If there are challenging moments in terms of funding, this should ensure that companies can still survive from their own resources and revenues. 

    What’s next for Cristobal and Startup Wise Guys?

    For Cristobal Alonso, the goal is to keep growing Startup Wise Guys for years to come, thus being able to support even more founders from overlooked markets in their journey towards building great sustainable tech companies. We have seen this effect in the Baltics and want to replicate it further in other European, African countries, and, who knows – maybe on other continents too.

    This year we celebrate the 10th anniversary of Startup Wise Guys. As a company, we are facing a beautiful and painful experience of what growth and scale mean. So we can relate to the startups that we work with. Our team has grown from 3 to 60+ people from 20+ nationalities across Europe. We used to run one, max two accelerators per year, and this autumn, we hit a historic milestone running seven parallel accelerator programs on two continents. We are managing one of the most prominent early-stage portfolios in Europe. Keeping the growth but solidifying the company and working smart at scale is definitely what is on my mind right now.

    But overall, we want to keep putting our energy and passion into making a global impact. We aspire to be a top-performing VC worldwide to support our follow-on investment rates at 50%. Our aim is to create role models for the world by focusing on overlooked markets and founders. Striving to develop high-growth employment creation and development, we want our global network to reach 1500 founders within the next 5 years. 

    What’s the best way for people to stay updated with the latest from you?

    I have taken up a personal challenge to post more regularly on my social media and share more of my journey as a CEO, mentor and investor.

    You can follow me on LinkedIn or Twitter.

  • Interview: Kustas Kõiv of Snabb

    Interview: Kustas Kõiv of Snabb

    Kustas Kõiv is the co-founder and CEO at Snabb, an Estonian startup making vehicle ownership a more delightful experience. Snabb was founded in 2015 as a private parking app, but now users can browse, manage and pay parking, washing and charging from the Snabb App. The startup boasts over 50,000 users in 10 countries. We spoke to Kustas to learn more about Snabb first-hand.

    Tell us about yourself. How did you end up in the startup world?

    I’ve always dreamed of founding and building a technology company and when one of my friends shared his new business idea during our final year of college, we jumped to work without much thought. This was in 2012. It was only later when we learned that if you’re building technology and need to grow fast, your might call your venture a “startup”. So we did.

    And what were you doing just previous to Snabb?

    Travelling and ad-hoc jobs aside, I graduated from TalTech as a mechatronics engineer and worked for a military simulation tech company for the following two years.

    The Estonian ecosystem seems to never run out of founders coming up with new ideas. Why do you think this is?

    I think there are awesome founders everywhere but one cause for Estonian success is that the country is so small and one needs to think and act internationally from the very beginning.

    Is there anything that could make Estonia even better for startups?

    Sure – more talented people. The more the merrier. How to accomplish that is, of course, another topic.

    Tell us about Snabb’s product. What does Snabb facilitate, in a nutshell?

    Snabb brings all vehicle related services such as parking, washing, charging, insuring and more to the fingertips of the vehicle owner via one easy to use app. One account, one email, one credit-card and one yellow button to confirm.

    What is Snabb’s traction so far?

    Snabb has more than 50,000 happy unique monthly users, and integrated hundreds of car parks, car washes and EV-chargers into its offering.

    Who is your target audience?

    Vehicle owners. Either private persons or companies with fleets. In terms of geography – we’re targeting markets based on a few KPIs such as how inconvenient the current vehicle services are to use and how quickly we can change that.

    How much funding have you raised? What was your experience fundraising and what advice would you give to new founders?

    Snabb has raised €2.4 million as of today and my experience is that it’s great to raise money when it’s not difficult. Raise when you’re not desperate for it. If raising is too difficult, maybe it’s better to improve the product and get more early traction.

    What are the biggest challenges you faced growing Snabb?

    It must be the onboarding of the potential user-base. Early adopters were easy to onboard but from then on, changing and introducing new habits to most people is super hard.

    What trends are you seeing in the automotive industry? Will everything become a subscription?

    Self-driving EVs at large scale owned and managed by TNCs (transport network companies) but also individuals. Of course it will take time, but thanks to that, the vehicles will be utilised more – driving around say 50% of its lifetime instead of 10% which is the current reality.

    Vehicles will earn revenues for their owners (company or private person) while taking care of themselves (washing, insuring, maintenance appointments, etc.).

    What’s next for Kustas and Snabb?

    We will keep growing, keep launching new connected service locations in our target markets and making vehicle ownership suck less.

    What’s the best way for people to stay updated with the latest from you?

    I’ll share our most significant updates via LinkedIn.

  • Interview: Lisett Luik of Arbonics

    Interview: Lisett Luik of Arbonics

    Lisett Luik is co-founder and COO of Arbonics, a Plural-backed startup that is leveraging the potential of forests to fight for a better planet. We caught up with Lisett, a graduate of Yale and LSE as well as former team member of Taavet+Sten, to learn more about Arbonics. We talked about her experience raising money with Plural, the carbon market, carbon credits, transparency, and the extent of the possible contribution by forests.

    Tell us about yourself. How did you end up in the startup world?

    I got started in startups while still in university – I joined a then-small payments startup called TransferWise as an intern. This was the first time I experienced a small, high-growth company, and I loved it from day one. I always knew I wanted to build something from scratch myself, but it took 10 years to finally reach the point where I felt I was ready. 

    And what were you doing previous to Arbonics?

    I worked in technology investments at Taavet+Sten, an investment firm founded by Estonian entrepreneurs Taavet Hinrikus and Sten Tamkivi. Prior to that, I lived in the US and UK, and worked for a couple of start-ups and for my one foray into the corporate world, at American Express.

    The Estonian startup ecosystem is seen as one of the most exciting in Europe. Why do you think so many Estonians want to start up?

    We’re a tiny country with a challenging history – this seems to have made Estonians quite scrappy and hard-working, which are good personality traits if you want to be an entrepreneur.

    Additionally, we’ve benefited from a few early successes such as Skype and Pipedrive, which helped kick-start the ecosystem here. The result has been a positive flywheel: Skype alumni built and funded the next wave of successful startups, including Wise (previously TransferWise), Bolt and others; which in turn are now helping to  incubate the third wave of successful Estonian startups.

    What was your fundraising experience like?

    At Arbonics, we benefited from a close relationship with one of our to-be investors from before Day 1 – Taavet Hinrikus was part of the original formation of the idea, and backed us as a founding investor, alongside Plural.

    The whole process was hence pretty smooth and fast, from receiving the initial term sheet to round closed in about a month.

    Explain to us what Arbonics does, in a nutshell.

    We help landowners realise the climate impact of their land, by planting new forests and changing existing forest management practices. We do this with the help of a data platform that assesses each plot of land and estimates its carbon storage potential.

    Rewarding landowners for carbon storage is enabled by carbon credits, which Arbonics helps sell to tech companies looking to compensate for their unavoidable emissions. 

    What is Arbonics’ business model?

    We help landowners generate carbon credits and in return take a % of credits generated. 

    What impact can forests make, if managed properly?

    Nature-based solutions (including forestry) can help address up to 37% of climate change mitigation up to 2030; and more importantly, do it at a reasonable cost (€30-90/tCO2e vs >€500/tCO2e for DAC and other technological solutions).

    In Europe alone, there’s 160 million hectares of forestland to tackle. Through a variety of products, this could sequester as much as 2 gigatonnes of additional carbon per year.

    What is your target audience / market?

    We are starting out in Northern and Eastern Europe, which have a lot of forest knowledge and forest owners already – but in the medium term, we hope to make our services available to all landowners across Europe. 

    Why are carbon credits such a controversial topic?

    Carbon credits range from highly questionable (e.g. “avoided emissions” through some non-monitored projects that theoretically change behaviour, but cannot be proven) to highly trackable and provable.

    Historically, the market has been a bit of a Wild West – unregulated and lacking in oversight, meaning that a large portion of credits sold had questionable provenance. However, with modern technologies like remote sensing, it’s now possible to bring more transparency to the market, and that’s what we aim to do with Arbonics. 

    Why focus on credits at all? As much as we’d all like to, it’s simply not possible to reduce all emissions to zero overnight – even sustainable technologies like electric cars or solar panels create CO2 throughout the production process. Carbon credits are meant for companies who already have a plan in place to reduce their overall CO2 footprint, but who need help neutralising their unavoidable emissions.

    What can we do to bring more trust and transparency to carbon markets?

    A key principle is to use transparent and trackable data-based estimation and measurement. For example, we assess the suitability of a specific plot of land by looking at 20+ different data sources, all of which are either backed by government or research institutions. 

    What is lined up for Lisett and Arbonics in the next 12 months?

    We’re focused on growing our product and reaching more landowners. In the process, we’ll probably need to double or triple the size of our team, so we’re always looking to talk to interesting people who are enthusiastic about the climatetech and naturetech space – please reach out if that speaks to you!

    What’s the best way for people to stay updated with the latest from you?

    You can follow Arbonics on Linkedin here or sign up for our newsletter on Substack. I am on Twitter, where I share both thoughts about the carbon markets and forestry, as well as the day-to-day experience of building an early-stage startup  & occasional book recommendations. 

  • Interview: Bogdan Iordache of Underline Ventures

    Interview: Bogdan Iordache of Underline Ventures

    Our first Rest of the World interview features Bogdan Iordache, General Partner at Underline Ventures, a new fund that partners with Eastern Europe-based, globally-minded early stage startup founders. As well as being heavily involved in the Romanian investment scene, Bogdan co-founded Conectoo, an enterprise email marketing platform that exited in 2014 to Emag and co-founded How to Web, one of Europe’s largest startup events.

    What brought you first to the startup world?

    After graduating my studies I felt all the job ads I was reading were not for me – so I started my first business endeavour, then the second, not knowing I was doing “startups”.

    And what were you doing previous to Underline Ventures?

    In the past 10 years I have worked mostly in investment – at Springboard, 3TS Capital Partners, MVP Academy and then Gecad Ventures. It has been quite a ride, and I had the chance to meet and sometimes work with some amazing (mostly Romanian) investors.

    At the same time, I have been part of the How to Web team and supported the company’s projects, most notably our annual conference. How to Web has been an incredible space where I had the chance to meet many amazing European funds, great founders, and many operators, and learn so much about building products, teams, and companies.

    How to Web was launched in 2009, and after 13 years is probably still one of Europe’s top 5 startup conferences in terms of size and impact.

    What are you looking for in startups and in founding teams?

    We want to partner at the seed stage with Eastern European founders who want to build global-first companies. This includes startups where just a part of the founding team is Eastern European, and we’re happy to help them develop their Eastern European team.

    As traits, we love founders who are deeply customer-centric and have the leadership skills that allow them to build great teams. We try to deeply understand the product value they are creating, and we’re less inclined to invest in companies that need to localize their products. 

    We are vertical-agnostic, but there are some areas (such as consumer hardware) where we tend to be more cautious.

    Why should startups choose Underline Ventures?

    I’m working every day to give them plenty of reasons 🙂 

    We want to be great partners to the founders we work with, and this means focusing on actual things they need support with so they can achieve their objectives, but also be a good listener whenever they want to discuss a strategic decision they need to make.

    We can help hands-on with things regarding product strategy and go-to-market actions, help with communication and recruitment projects, and connect them with other great investors. We can also leverage our LP network and extended networks to help them connect with clients, experts, or potential employees. 

    The fact that we’ve been in this before startups were called startups really helps.

    How do you assess the startup ecosystem in Romania? We all know about UiPath, but what else is going on? Could you give us an overview?

    Romania has had some great tech companies even before UiPath with RAV Antivirus, Bitdefender, eMAG to name a few. 

    UiPath came out of nowhere and it was definitely a lucky accident, but an accident that has changed the local scene in many ways – there are more investors interested to invest in Romania, more know-how, and much more ambition. 

    In the last few years we’ve seen a steady build-up, with new funds emerging, and new companies growing (FintechOS, DruidAI amongst them), and I’m sure we’ll see some notable successes in the next 5-10 years. I don’t think we’ll see another tech company doing a 50 billion IPO anytime soon, but I’m sure we’ll have more unicorns in the next decade.

    What are the advantages and disadvantages of starting up in Romania?

    It really depends on what you compare it with. As a founder, you generally do not have too much of an alternative because moving into a new country means you have to restart building your network. 

    We have a strong developer base, with probably less than 20% of all developers working in product companies. We also have lower costs than the UK or US, and if you start here you can build a very strong engineering base. 

    However, we don’t have too many experienced product, sales or marketing people. This has improved in the last few years, but there’s definitely room for improvement.

    How would you assess CEE’s evolution when it comes to startups in the last years? And where is it heading?

    There has been a steady development throughout the entire CEE in the last 10 years. If ten years ago we’d looked at the map, we’d hardly count probably 5-6 countries that had tech companies valued at more than $100m. Now, there’s almost no country in Eastern Europe without a company worth hundreds of millions, if not billions. 

    I can only assume that in the next decade the impact of all those networks, smart money, know-how will help create many new successful startups. This trajectory can be negatively impacted only by geopolitical factors, and I hope it won’t be.

    What startups from your portfolio are you most excited about?

    We have not announced our portfolio yet, so I cannot comment on this right now.

    And from your anti-portfolio you wish you had invested in? Did that change your perception about how to evaluate founders or startups?

    It’s too early for an anti-portfolio, we’ve started just 6 months ago. But we’ve been in talks with some promising startups and decided not to invest because we could not get enough conviction on some elements of their business – I’m sure we’ve already been proven wrong.

    What advice would you give to startup founders as Europe braces for important turbulence in the economy?

    What I generally tell founders is that in every crisis the consumer mind moves its focus from expansion to efficiency – from “how can I grow” to “how can I organize better whatever I have right now”. Understand how your clients evaluate your product, and, if the case, see if you can move from the first bucket to the second one. 

    And yes – have enough cash so you can have one year of visibility ahead of you, and, if possible, always have a plan on how to become cash flow positive.

    What’s next for Bogdan and Underline Ventures?

    Next for Bogdan is Underline Ventures – we’ve got a lot of things to do in order to build a great venture company.

    What’s the best way for people to stay updated with the latest from you?

    I tend to use fairly regularly LinkedIn and Twitter, so see you there!

  • Interview: Dmitry Vartanian of SID Venture Partners

    Interview: Dmitry Vartanian of SID Venture Partners

    Dmitry Vartanian is Managing General Partner at SID Venture Partners. He is also co-founder & CFO of Sigma Software and a certified lawyer. At SID, he and his team back Ukrainian founders from pre-seed to Series A. Its deeptech credentials are evident from its DNA – it was formed in 2021 by three Ukrainian IT companies: Sigma Software, Ideasoft and Datrics. We had the pleasure of finding out more about SID from Dmitry, as well as the current picture for startups in Ukraine.

    How did you end up in the startup world?

    During my 20 years in the consulting industry at Sigma Software, we’ve developed many solutions for startups and even proceeded to invest in some of them with our own money. Eventually, that led us to the creation of the investment wing Sigma Software Labs, which also serves as a venture-building platform, backing ideas from the very beginning and empowering founders with extensive operational support.

    But that was just the beginning. After numerous conversations with the founders of Datrics (YC alumni big-data startup) and Ideasoft (a leading blockchain development firm), we realized there’s more we can do for the startup scene in Ukraine. Combining our experience and network, we launched a venture capital firm, SID Venture Partners. Just in time for all the challenges, but with clear understanding that we can withstand them and bring positive changes for the ecosystem.

    And what were you doing previous to SID Venture Partners?

    Prior to launching SID Venture Partners, I co-founded Sigma Software Group — one of the largest service companies in Ukraine, and — a cybersecurity company whose products protect 8+ million websites worldwide.

    But those are only two highlights: during my 17+ years as CFO and certified lawyer, I’ve managed 14 companies in 9 jurisdictions.

    What is Sid looking for in startups in terms of geographies, verticals?

    SID Venture Partners is looking for early-stage startups with Ukrainian founders from around the world. We’re an industry-agnostic fund investing in all kinds of software companies but have amassed profound expertise and a sizeable portfolio presence in fintech and blockchain verticals.

    Our main criteria are simple yet proven — you need to scale fast, have a reasonable burn rate, and prove your idea with data and passion.  

    And in founding teams?

    SID Venture Partners is led by 13 partners who are current C-level executives and founders. This experience helps us to understand market challenges and conditions better, as well as assess teams fairly.

    Besides the relevant experience and vast understanding of chosen market problems, we’re also looking for a positive attitude and ability to solve problems and cooperate.

    Most importantly, we want to work with people that are inspiring and easy-going, as early-stage companies sometimes require a lot of attention and help from investors.

    Why should startups choose SID Venture Partners?

    SID Venture Partners is built around the smart-money principle — in addition to capital, we provide all kinds of assistance and help to our portfolio companies. Those are not empty words. We could help them design, recruit, build complicated systems, and land new clients.

    Simply speaking, startups can count on the whole SID ecosystem rather than just a wire transfer to their account. SID is backed by several founding companies whose resources are at our startup’s disposal.

    For example, Sigma Software has around 2000+ developers, designers, and other professionals in Ukraine, Europe, and US. IdeaSoft specializes in blockchain development, hosting world-class developers in that field. Datrics, a Y Combinator alumni startup, has expertise in machine learning and AI.

    And then there’s NEAR Protocol, one of the most extensive blockchain ecosystems in the world with $250M+ in daily trading volume. 

    How do you assess the startup ecosystem in Ukraine? Recently, news have come out highlighting both the resilience as well as the need for survival funding during the war – how do you assess the situation?

    We could certainly back the claim that the Ukrainian tech ecosystem has shown incredible resilience and courage. We’ve made 10 investments since the start of the full-scale invasion, and we are not slowing down the pace.

    One of our portfolio companies, a design platform Awesomic, was featured in the Y Combinator video named “Scaling a Startup from a Bunker”, which speaks for itself.

    Ukrainian founders did everything possible to secure the safety of their teams without interrupting daily operations and service deliveries. Some even managed to pivot or expand. Our portfolio company Numo pivoted to ADHD treatment during the war, writing a completely new solution from scratch. 

    Another example is Liki24, one of the biggest e-commerce Ukrainian stars, which now operates its pharma-delivery service in four European countries.

    Of course, they’re not only victories. The war collided with bigger macro trends, making access to capital especially challenging for Ukrainian founders. Many of them are in dire need of financial support and access to new markets and clients.

    If you could change one thing about the ecosystem for better, what would it be?

    We’d like to increase the level of cooperation between ecosystem players. Sharing more data, industry-specific information, and best practices would undoubtedly have a positive impact on founders and other stakeholders.

    Where do you see the ecosystem in the next 1 to 5 years, or after the war?

    With more and more victories on the battlefront, investors are more likely to allocate their capital for Ukrainian talent — we’ve seen it from our personal experience and in the news. There’s a new ffVC fund with up to $50M, and Horizon Capital is on track to close its $250M PE vehicle. 

    Those numbers might not be impressive for a bigger startup ecosystem, but they could bring significant changes to the Ukrainian ecosystem. With that amount of dry powder coming, founders will be able to build faster and add a few more unicorns in the coming years.

    After the victory, Ukraine will be in focus due to reconstruction efforts and that’s a tremendous opportunity that will bring positive changes to each sector, including tech. 

    How is Sid facing the challenges of the war, from addressing the personal safety of the team and founders, to coping with the financial implications?

    SID was launched right before the full-scale invasion in December 2021 but showed organizational maturity when the war started. Most of our team is now located in Lisbon, Portugal, and works in remote-first mode.

    We’ve also helped to ensure the safety of our portfolio companies’ team members, providing evacuation transport and other kind of support. Work has not stopped there, as we helped some of our portfolio companies to raise new rounds or find new revenue streams.

    What are the most exciting new startups coming out of Ukraine or founded by Ukrainian founders?

    Well, we are very excited about solutions that have already improved the lives of millions of Ukrainians and are now exported abroad. Ukraine is on track to be more integrated into the global economy than ever before, and digital solutions are a prominent part of it.

    For example, our portfolio company, The Credit Thing, scales next-gen credit products for newcomers in the UK. It’s founded by the founders of monobank, the most successful neobanks in CEE, with more than 5 million clients in Ukraine alone. 

    Then there’s Liki24, which operates pharma delivery and price comparison services in Ukraine. Following the invasion, the company decided to speed up its efforts to conquer European markers — in addition to Romania, Hungary, and Poland, it’s now beating expectations in Italy. 

    Those examples show us a possible future of Ukraine and makes us excited for the next decade.

    What startups from your portfolio are you most excited about?

    We are sure all of our investments will make a big splash, but some take more time and effort to gain that speed and recognition. Therefore, right now, it would be suitable to highlight Awesomic and V-Art.

    Awesomic matches design tasks with professional designers within 24 hours. It covers any type of request on a flat monthly subscription, and the team recently added Webflow to its arsenal. This means you can design, develop and launch your project within days, not months. Utilizing best fit-designers, Awesomic delivered more than 10 000+ projects.

    V-Art is a platform for digital art assets, combining an NFT marketplace and IP rights managing solutions. Recently it made a big announcement, launching V-Art Protocol. It solves a big problem, providing hassle-free licensing of digital products across platforms, and satisfying the needs of creative digital asset creators, IP owners, buyers, and sellers.

    And from your anti-portfolio you wish you had invested in?

    The thing is, we launched in December 2021 and, in less than a year of operations, made 13 investments despite war and a bigger market downturn. To achieve this result, we’ve screened hundreds and pre-screened thousands of startups, scanning all parts of the tech ecosystem in Ukraine and beyond it.

    Our investment thesis, for now, let us safely say that we’ve invested in each startup that checks all the boxes – so we do not have FOMO so far. 

    What advice would you give to startup founders in what seems like more challenging times to lead a startup?

    Margins, growth, and capital efficiency are once more the key virtues of a successful startup, say industry moguls, and we fully support this message.

    The economic instability might last for a while, leading to scarce capital and moderate valuations. But it should not discourage startups from trying.

    What’s next for SID Venture Partners and Dmitry?

    We’re in for a long game. SID Venture Partners is designed to withstand turbulence and challenges, paving the way for new funds. Our portfolio is already performing beyond expectations. In the future, we’d like to support startups in later stages and launch new investment vehicles. 

    What’s the best way for people to stay updated with your latest news?

    The very best way would be to become an LP and receive all the information from our investor-only information channels. We are not only informing our investors about the fund’s performance but let them collaborate with portfolio companies directly. 

    And for everyone else, follow our pages on LinkedIn, Facebook, and Twitter to stay updated.