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Investor of the Day #4. “Investors shouldn’t focus on exit at the moment of investments”: bValue, a leading early-stage VC in Poland

Friday, January 17, 2020

bValue was founded a little bit more than three years ago but now it is a leading early-stage VC in Poland with $25m for investments. Usually, bValue invests in the B2B SaaS companies that provide software based on a subscription fee, have already launched their products on the market and gained their first clients. The average investment cheque is between $250k–1m per company. bValue invests in startups from Central and Eastern Europe and has become one of the most active foreign investors in Ukraine in 2019. Pawel Maj, bValue’s investment director, tells us about the fund’s philosophy for supporting startups and gives three pieces of advice to founders willing to work with bValue.

Startup Jedi

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— What makes bValue different from other Polish VC funds?

— We are vertically agnostic which means that we invest in B2B SaaS startups focused on e-commerce, cybersecurity or whatever. bValue is very open to the great teams doing great products on the scalable markets. Based in Warsaw, we are investing in startups from Central and Eastern Europe. For example, according to UVCA (Ukrainian Venture Capital and Private Equity Association), bValue became one of the most active foreign investors in Ukraine in 2019. We also have investments in German, for example.

How do we differ from other players? We believe in our graduates! We believe that they will gain momentum due to not just the money we have brought to the table. We believe that the value of our experience and knowledge will help startups grow and tackle the issues they might face. More than that, our focus and aim are to choose a small number of startups for our portfolio. This enables us to commit our time and knowledge to help them grow alongside us. We are team of 8, and our past experience is related to venture capital, private equity, as well as financial consulting (including working for Big Four). But we also bring to the table unique knowledge, experience and network of our investors (LPs), since among them we have one of the most successful Polish entrepreneurs.

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— As far as I know, bValue has already invested in 17 companies. Talking about the plans, how much money are you going to invest in?

— Right now, we have 3 funds under management with over $25 m to invest. At the moment, we almost fully invested our second fund, where we still have a few slots available for the investments. Usually, we do between five and ten investments per year. Now, we are about to launch operationally our third fund.


— What is your comfortable share in a startup?

— Historically, we usually obtain between 15 and 20 percent of the business. It’s very personal and depends on the revenues of the given startup, the quality of their team, the size of their market and their revenue growth. We just want to make sure that the startup will be investable, which means that the founders of the given projects will be able to obtain funding from angel groups and VCs during the following series.

Pawel Maj


— One more question about the investment strategy. When and how do you prefer to exit from the company?

— I do believe that we as investors shouldn’t focus on this at the moment of our investment. Rather, we should focus on the operations of the given business, decisions around the product and how we can grow the business during the next couple of years. If you can have such kind of startups, the exit is just a matter of time — it will happen in 3–5 years after the investment. That’s why we don’t focus much on the exit-related questions and don’t have any fears that would limit us (unless given startup operates in a very small niche) — we are open and flexible towards any kind of exits. Moreover, they often depend on the macroeconomic situation rather than the startup itself.

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— Could you tell about the most important bValues exits?

— Keep in mind that we are just a 3 years old fund. Exists usually take place in a longer time. However, today we are ready to speak about 2 deals. The first one was Shoplo — a Polish e-commerce hub that offers powerful tools (online store and customer support). It has been acquired by SumUp, the London-based fintech unicorn that enables small businesses to take card payments via its device and online. We were the Shoplo’s investor for 1,5 years and we have made plus/minus 2x the money. The acquisition of Shoplo was really great news for us and we hope there will be more such deals which are crucial for bValue and the startups’ ecosystem in Poland in general.

The second exit happened in 2018. This was Callpage, founded by three Ukrainian guys, it is an ICT SaaS company that converts website visitors into sales calls. We have invested over $1M in the pre Series-A round. During the Series-A round in 2018, of the total size of $ 4,5M (in this round participated three vcs, including one with roots from Israel), we sold half of our shares. We’ve made a profit during this deal but we can’t disclose it publicly.

Looking at the performance of our current portfolio companies, in general, they are performing according to our expectations, but a few of them had an exceptionally good year. One of them is Tidio, a Polish startup that develops live chat supported by chatbots, which has over 10 thousand of paying customers from all around the world and which has acquired $1 M from the Inovo Venture Partners fund in the fall of 2019 thus reaching a market valuation of $20 M.

Leszek Orlowski


— What are the key things you pay attention to as an investor?

— The team is a crucial component of any startup at any stage. That’s why first of all, we want to make sure that the key members are put in place (at least CEO, CTO, and depending on given startup sometimes CMO) and do work together. We also want to make sure the team is investible and has a lot of energy and enthusiasm to take their idea forward. We pay attention to good communication skills, including the ability to speak English fluently, because they will have to sell their ideas to the financial or strategic investors in the future.


— Does it take long to negotiate the transaction with a startup-nominee”?

— Well, it depends. Let’s look at this from two different perspectives. From the perspective of the investor, it can take two up to three months since the first meeting. From the perspective of the startup, the process may be longer — up to six-nine months (it depends when given startup started fun).

Maciej Balsewicz


— How many teams have you refused to invest in and why?

— We received over 2000 investment proposals per year (inbound and outbound, we also participate in conferences, as well as scout for projects in the whole CEE region; the easiest way to reach us is to send pitch deck to our email address, out of which we deeper analize about 100 of them, and finally invest in 5 to 10.


— Do you get a seat on the board? How much time do you devote to each startup every month? What is the overall philosophy and strategy of bValue for supporting startups?

— As I said briefly in the beginning, we do believe in a hands-on approach (called by some ‘smart money’). We prefer to be engaged personally and give a lot of time to each startup. From the formal point of view, usually, we take one place on the board, but we engage according to the needs on a day-to-day basis or to the problems startup face at the given moment.


— What are the best three pieces of advice you would give to founders willing to work with you?

— The first one is to do your research properly to make sure your startup fits into our profile and scope of interests. The second one — try to include in your pitch the numbers and the information about your financial model. And last but not least, — come to us with vision and strategy on how to accomplish it.


— What are your plans for the upcoming year?

We are just starting a new fund in Poland (that also will focus on investing in startups from the CEE region) and plan to do at least 10 investments in 2020. Right now, we are helping the startups from our portfolio to build a valuable network, scale their operations and acquire the next rounds of financing. We’re pouring all of our energy into helping the companies successfully grow forward exits and our hands-on approach where we operationally engage with our portfolio companies has already proved itself.

17 Jan 2020


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