Earlybird, the Berlin-based VC, turned a spotlight on Central and Eastern Europe earlier this year when it announced the launch of a new $130 million fund dedicated to tech startups specifically from the region — an area full of talent but often lacking the instant magnetism that areas like Silicon Valley, New York or London afford entrepreneurs in need of financial backing. Today it’s announcing the first three investments made out of that fund: video app Flipps, job site Tjobs and real estate portal Metrekare.
“These are high technology ventures, with brilliant entrepreneurs,” Earlybird partner Cem Sertoglu says. “The region has a very strong legacy of science and technology education, with strong entrepreneurial drive. Until recently, the biggest impediment to creating world-class tech companies in Turkey & CEE was the lack of an ecosystem, and local, committed Venture Capital. We are here to solve that last piece of this puzzle.”
The three speak to the geographic spread of the new fund: Flipps was founded by engineers in Bulgaria but is now based in Silicon Valley; Tjobs is from Romania; and Metrekare is Turkish.
Flipps was actually confirmed at the end of April, is for $2.4 million and also had participation from the likes of Tim Draper and Hasan Alanoba. Tjobs and Metrekare, meanwhile, are each “seven figure sums,” says Sertoglu. They are not being disclosed any more specifically, in keeping with a practice we see among a lot of VCs out of Europe (to our frustration).
Apart from the fact that it’s great to see startups getting more support across Europe, there are some other interesting takeaways from this news.
The first points to the mix of companies, not just in terms of geographies but in terms of what they are doing. Metrekare is known as the “Zillow of Turkey”, which in one sense seems to imply yet another e-commerce clone from the developing world.
But that would be a misleading and short-changing estimation, says Sertoglu. “We focus more on creative solutions to large problems, rather than whether a company has been inspired by another,” he told me when I brought up the subject of me-too startups. “I don’t think it would be fair to call Facebook a ‘MySpace clone.’” He says Metrekare is “going after a big problem in Turkey: home seekers do not have adequate tools at their disposal when in the market.”
Metrekare, pursuing an opportunity in a market that hasn’t really been touched by other big players, is applying a data-driven approach to housing search and sales in a country that has had its housing market ups and downs. That has possibly kept others away and could end up working to its advantage (remember that Google really came into its own during a dot-com “bust”).
Meanwhile, Tjobs is tackling an equally challenging issue in the current European economy: rather than being just another jobs listings site, it’s focused on blue-collar workers, and the movement of them from one part of Europe to another. Specifically, the company, in Sertoglu’s words, is “focused on a recent development: enabling highly skilled workers take advantage of liberalized labor mobility laws in the EU, while bringing Western European employers high-productivity labor solutions using the Internet.”
Flipps, meanwhile, taps into another interesting and very unrelated trend: a renewed focus on the media industry among tech companies. The other week, when I was interviewing DFJ partner Barry Schuler about a new $470 million fund, he noted to me that one particular focus for the VC would be media startups — “areas that have not been all that interesting to the venture world because of the multiples,” in his words, “but we think there are exciting plays there, interesting things coming out of media.”
“We are in the middle of very sacred format that is now changing,” he continued. “It’s not just TV shows and movies. The very way that we consume information is changing. It’s not even close to having been invented yet. The last 10 years of the Internet have been based on the Google model of commoditized content. Now we are emerging from that with new ideas about branding and what it means to create high quality content.”
In Flipps’ case, the company has come up with a simple way of linking all the connected devices in your home, so that when you are watching video on your handset, you can select an option to start streaming it directly to your connected TV, whose IP address would have been captured by the Flipps app on your handset.
Flipps, whose reach can currently expand up to 250 million connected TVs in use today, is compatible with some 5,000 manufacturer models. It says it has already picked up 10 million users to date.
These three were chosen from a pool of about 2,000 startups vetted by Earlybird, the VC says.