UNIQA Ventures, the venture capital arm of Vienna-based insurance group UNIQA, recently doubled its investment volume for Series A investments in Central and Eastern Europe (CEE) to €150M.
According to Andreas Nemeth, CEO of UNIQA Ventures, CEE is not only an increasingly interesting region from an economic perspective but it’s already pretty active in respect to startup investments. As of 2021, there have been 34 unicorn companies created in this emerging part of Europe. These include names like UiPath, Skype, Rohlik, and Bolt
Bold investments in the future of finance, insurance, and healthcare have already turned into part of the brand of UNIQA Ventures – proven by the early investments in the Austrian crypto unicorn Bitpanda and the Czech BNPL provider, Twisto Payments (recently sold for $116M).
With the new capital, UNIQA Ventures will be looking to find the next unicorn in CEE, given that the region has seen significant growth in startup investments over the past few years.
UNIQA Ventures: The secret behind corporate venture capital success
For 5 years, UNIQA Ventures has been backing young startups in the early growth phase with scaleup capital. With investments of over €65M across 30+ companies, 5 exits, and 1 unicorn, the success rate of UNIQA Ventures has been excellent so far.
Nemeth also reports returns north of 20% p.a., an important result for the corporate VC fund.
What is behind the track record of UNIQA Ventures?
Well, one reason appears to be the setup as an independent VC with a small but powerful team that can quickly close startup investments based on clear criteria. This structure has given UNIQA Ventures the opportunity to operate fast with great flexibility while still having access to the network and know-how of one of the biggest financial services groups in CEE.
The reasoning behind UNIQA Ventures’ focus on CEE is as follows. First, it’s a very attractive location for the group from a purely economic perspective – UNIQA is serving close to 15 million customers across the region.
There are also more and more advantages for startups, for example, well-educated tech-talent, entrepreneurial spirits among the population are growing, and there’s an overall friendly attitude to doing business.
According to UNIQA Ventures, valuations are also much better compared to Western Europe.
In addition, the market is becoming more integrated. Nemeth doesn’t see a big difference between Eastern Europe and let’s say Germany or Austria anymore. And, the relatively small local markets in most countries in CEE (except for Poland and Romania) motivate founders to think internationally from day one.
The founding team is of utmost importance
Startups in the Series A stage are the sweet spot for UNIQA Ventures. Nemeth explains that the team is looking for companies with a product-market fit and annual recurring revenue (ARR) of at least €1M. Yet, one of the other big factors is the growth rate, especially on a monthly basis.
Of course, at the end of the day, the founding team is the main decision point – with some extra attention on their ability to execute. So, it’s important they complement each other and are able to work well together towards the common goal.
The last aspect is the business model as UNIQA Ventures is looking to make the majority of its investments in industries in which the company has expertise.
That’s the reason Fintech, Insurtech, Digital Health, and Mobility are the focus sectors – the main LP UNIQA Insurance Group is on the search out on new business opportunities and new tech trends in their very first days. So, it’s about innovative and almost always digital business models.
Exits are the big goal
If things go according to plan, the ultimate goal is startup exits. UNIQA Ventures sees itself as a temporary partner and supporter in the most critical growth phase. And, the clear goal of bringing financial returns to UNIQA.
One excellent example is Twisto, a company that became the leading BNPL provider in CEE. UNIQA Ventures backed the company for the first time in 2017 and then joined for two more funding rounds before exiting to Zip Money earlier in 2021.
That said, the right fast-growth startups have to be discovered first. Now, UNIQA Ventures has €150M to invest, double its original investment mandate (the first 75 million will be exhausted by the end of 2021.
About half of the new capital will be invested in CEE startups, with the other half going to tech companies in Western Europe and half in Central and Eastern Europe.
“Starting with investments in startups 5 years ago was a courageous decision. Today, we are already reaping the rewards and look forward to accompanying and supporting many startups in CEE and throughout Europe in their scaleup journey over the next 5 years as well,” states Nemeth.