The SpeedUp team has created a new S20 fund and launched investments

The founders of a new VC fund called S20 didn’t publicly announce its formation for almost a year. When they finally did, it turned out they had made ten investments and another five planned for this year.

Behind S20 are Marcin Fejfer and Kuba Dudek, known in the venture capital community, as well as Bartłomiej Gola and Tomasz Czapliński. The first two play first fiddle in the new fund. Bartłomiej Gola is still focused on SpeedUp Innovation and SpeedUp Energy Innovation, while Tomasz Czapliński is in charge of SpeedUp Bridge Alfa.

- The initiative to establish a new fund dates back to 2019, when Bartek Gola invited Marcin and me to join the group of partners. We had previously served as investment managers. This invitation initiated changes in the structure of SpeedUp. A new partnership was established at that time, and the transaction itself resembled a model MBO [management buyout - ed.] – says Kuba Dudek, president of S20 Management.

Currently, there are three VC funds operating within the SpeedUp group: SpeedUp Innovation, established as part of the National Capital Fund (KFK), SpeedUp Bridge Alfa implemented with the National Centre for Research and Development (NCBR), and SpeedUp Energy Innovation, whose partners are PGE and the Polish Development Fund (PFR).

The first two funds have already completed their investment phase and are currently waiting for exits. The SpeedUp Energy Innovation fund still has money to spend, but is currently focused solely on follow-on investments, i.e. on further financing of companies already in the portfolio.

Unlike previous funds created by SpeedUp, in which the investors were public institutions and a large corporation, S20 was created solely with the involvement of private capital.

After gaining experience in creating funds based on public money, the partners decided to build a new investment structure fully financed by private investors.

– Thanks to this, we can act more flexibly, faster and more freely when investing abroad – emphasizes Marcin Fejfer.

As part of the adopted strategy, S20 focuses on companies from Central and Eastern Europe and Poland's close neighbours in the west, such as Germany and Austria.

- We also pay special attention to entrepreneurs from Ukraine, who are increasingly establishing and developing their companies outside the country's borders - in Poland, Estonia or the United States. For us, not only the location of the business is important, but also belonging to the broadly understood diaspora of the region - adds Marcin Fejfer.

- We focus on the pre-seed and seed stage [seed capital – ed.], where the founders play the biggest role. For this reason, we attach great importance to the possibility of checking teams through our extensive network of contacts and recommendations – emphasizes Kuba Dudek.

To date, S20 has invested in 10 companies: AI search engine management platform Peec AI, IT company Defguard, medical nutrition platform Healthnix, language learning platform BeeSpeaker, energy management system Boldr, veterinary clinic integrator Pupilmed, pet owner-caregiver portal Petsy, math assessment assistant Smartschool, water-saving cosmetics company Ari Care, and another as-yet-undisclosed company.

In many cases, S20 does not act as a lead fund but rather participates in transactions as a co-investor. The size of a single S20 investment ranges from EUR 100k to EUR 500k, with the most common being EUR 100k-200k for the first engagement.

The fund tries not to participate in initial rounds above EUR 2 million. An example is Peec AI, in which S20 invested in a pre-seed round of just over EUR 1.5 million. The company recently raised new capital in a seed round, which means that it has already raised EUR 7 million in total financing.

- In smaller rounds, based mainly on capital from business angels, we are able to play a more organizing role. We can take 30-50 percent of the round. We are currently in talks with one of the companies in this context - says Kuba Dudek.

The fund was established a year ago for a 10-year term. Its founders assume that they will invest in 30 companies within three years of launch. They still have two years to complete a maximum of 20 investments, and this year they will conclude about five or six transactions.

The process of raising capital in S20 is still ongoing.

- We have an appointment with investors for the so-called final close by the end of this year. At the same time, we have adopted a fund size limit of EUR 15 million. This is a conscious decision and a formal arrangement with our investors. Such a limit forces us to focus on investment results, not on benefits resulting from the management fee [fund management fee - ed.] – says Marcin Fejfer.

The fund's investors are mostly Polish entrepreneurs, although a few business angels from outside Poland have also invested capital. Some of them already have experience in investing in start-ups, others are just entering this area. This group consists of a dozen or so people. They do not include funds of funds, large institutions or organized structures managing the assets of multi-generational families.

member of the board of PFR Ventures

The emergence of new VC funds in Poland, which are based solely on private capital, can be interpreted as a maturing market. It is good that we have managers who are able to convince new investors (LPs) to allocate funds to innovative companies.

This situation is also beneficial for the companies themselves - they can count on greater availability of diversified capital. An example is the recently announced seed round of Defguard, where the investors are a fund we have funded from the FENG budget - Hard2beat, a fund we have funded from the PFR budget - Smok Ventures, a fund based on private money - S20 and business angels.