10 Poland-based investors discuss trends, opportunities and the road ahead

The first survey in a two-part series about the nation's startup ecosystem

Poland is becoming an important European tech ecosystem after experiencing record levels of investment and growth in recent years.

It’s the largest economy in Central and Eastern Europe (CEE), is known for its technical talent and has now nurtured a number of large startups that have raised multiple rounds of funding. In 2019, investment in Poland’s startups — with Warsaw being the biggest startup hub in the country — grew eight times year-on-year to reach €294 million. This was more than the combined amounts of the nine years prior. While investment has slowed due to the pandemic, it has not stopped. And of course, COVID-19 has only accelerated the pace of digital adoption inside the country itself.

A July 2020 report by Dealroom found over 2,400 Polish early- and later-stage startups, 97 venture capital funds and cataloged over 1,600 funding rounds in 2019. The country has over 401,000 engineers (twice that of Romania at 139,000). It also had twice the number of venture capital rounds in the region (823 compared to Estonia’s 477).

Polish startups are on a funding roll, as the average cheque size for pre-Seed-stage investments has almost tripled since 2013. At the same time, it’s attracting foreign investors. Codility and Nomagic were two startup investments that stood out this year so far. Nomagic, a smart “pick and place” robotic solution, attracted investment from the U.K.’s Hoxton Ventures and Khosla Ventures in the U.S.

Key, later-stage startups include Booksy, Brainly and Docplanner, while significant recent exits include Fibaro, PizzaPortal and Frisco. Poland has a sophisticated banking system, meaning there is an increasing number of fintech startups in the space.

Meanwhile, the startup ecosystem has, in recent years, been spreading outward from the capital, Warsaw, to Kraków, Łódź, Wrocław and Gdansk.

The country has also developed into a leading video game exporter. CD Projekt’s Witcher series was a big hit, based as it was on a series of best-selling Polish books, which were also the basis for a Netflix show.

According to data from PwC, Poland’s video game and esports market was worth $664 million in 2019 — up from $400 million in 2014 — and is predicted to climb to nearly $850 million over the next four years.

We asked 10 investors, principally based in Warsaw, to give us their take on where things are right now.

Bryony Cooper, managing partner, Arkley Brinc VC

What trends are you most excited about investing in, generally?
Deep tech topics including food and agritech, industrial IoT, media tech, cybersecurity and energy tech.

What’s your latest, most exciting investment?
We just closed a follow-on round in CyberHeaven sp. Z o.o., bringing the total investment to 4 million PLN ($1 million). Together with their partner company UseCrypt, they’re setting a new standard in data security with a complete ecosystem of tools to ensure the highest possible level of encryption. Trusted by major corporations, military and government organisations, they are soon to announce a partnership with a major TV network.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
I had a funny conversation with a friend the other day; we wondered how come cats and dogs can get a simple, six-month treatment to protect against ticks and fleas, but no such solution exists for humans?!
Many food and bio tech startups we see are in early/MVP stage; we’d like to see more in pilot stage, trialling/testing with customers.

What are you looking for in your next investment, in general?
We’re looking for experienced founders who have demonstrated their ability to execute and succeed in business, with beneficial strategic partnerships/network in place and a viable exit strategy. We’re particularly interested in deep tech startups with a physical/hardware aspect, at pilot stage.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
I’ve seen so many B2C home food growing/urban farming startups (hydroponics) — a nice idea, but I don’t believe it will take off. I’m also weary of consumer electronics and wearables that don’t deliver real value and are rather a gimmick.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
We focus heavily on Poland (our local ecosystem), especially because our fund was created with the PFR Starter FIZ program from PFR Ventures (the Polish Development Fund). However we can invest into startups from any European country, and we review applications Europe-wide.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Of course COVID-19 has altered the answer to this question. Regardless of region, industries that are not affected by (or are benefiting from) the pandemic are best-positioned to thrive. That includes health and medtech, certain mobility sectors, remote work tools! As for Poland, there’s a strong resource pool for software and hardware capabilities at very competitive rates, so a wide range of industries can thrive here.

How should investors in other cities think about the overall investment climate and opportunities in your city?
In Warsaw and Poland, many new VC funds have been set up over the last 1-2 years, so there’s a lot of competition to find great startups. We differentiate ourselves by focusing on deep tech and hardware-related sectors (many others only invest into software/SaaS). Many Polish VCs are optimistic, but are focusing only on the current situation of companies — not thinking long term (i.e., exit strategy). I would definitely say the startup ecosystem in Poland is growing and should be considered as “one to watch” by global investors.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
Yes, I do believe it is becoming less important to be located in a major city. More and more companies are making remote work possible, with more tools available for remote work and communication. Therefore location is no longer paramount to successful networking and meetings. The world is going virtual.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
Many industries that require manufacturing of hardware or physical products have been affected by factory closures, putting time delays on production. Also, B2B food tech companies have struggled with the downturn in restaurant business, with supply chains and distribution channels affected. They have to rethink their business models. Whereas ordering take-out food and any on-demand/home delivery services are on the rise, opening up new opportunities (though this trend began years ago).

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
The main concerns are about delays in production, or that B2B customers are less open to making new investments/purchases at the moment with so much economic uncertainty. Some of our portfolio companies (such as Cyberheaven, mentioned above) are going full speed ahead. The global discussions on data privacy raised by health-tracking apps have opened up many opportunities for them, as more corporations and individuals are prioritising protecting personal data.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
We see some acceleration, some slowing down but no stopping!

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
Seeing our team consistently keep up momentum and adapt so quickly to remote work has given me hope. Also seeing our portfolio companies assess and adapt to “the new normal” with total confidence in achieving their goals.

Any other thoughts you want to share with TechCrunch readers?
Startups should not lose faith due to COVID-19. Consumers and businesses still have needs to be fulfilled. Opportunities may change, but there are still plenty out there. And let’s not forget the importance of fighting climate change and the UN Sustainable Development goals! We’re happy with how our Q4 pipeline is looking :)

Anna Wnuk-Błażejczyk, investor relations manager, Experior.vc

What trends are you most excited about investing in, generally?
Data-driven software with strong AI/ML capabilities (using this to lower CAC too), a strong patented IP, no tangible assets present (e.g., no hardware). Generally, digitalization of the old fashion/retailing business.

What’s your latest, most exciting investment?
RevDeBug, since it is an efficient and widely sought-after enterprise software tool saving developers and businesses time and money, with an IP patent in the USA. It is an enterprise software, thus fitting ideally with our investment strategy, and it is great to see such solutions nowadays, since they seem more COVID-proof.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
In general, anything and everything that substitutes humans in operations. Medtech is beginning to emerge at the forefront of the battle against COVID-19,  but we would like to see more solutions and innovative startups in the sector. There is a lack of specialists, training takes too long, thus disruption in the sector is inevitable. On top of that, devtech/enterprise software, similarly due to a lack of specialists in the area, but we would like to see more quality code being produced that tackles automatic marketing and automatic call centres, amongst other things, as focus areas. Generally, automation of processes.

What are you looking for in your next investment, in general?
A data-driven (having proprietary data) company with revenues +$50,000 MRR, somewhere in the deep tech space, ideally with an AI/ML component and utilizing their proprietary data to grow. With regards to geography, anywhere in Europe, preferably with a lead investor already on board. A strong, patented IP, with no tangible assets (e.g., no hardware). A digitalization of the old fashion/retail business model.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
Anything in the fintech space, along with that in the space of GIS (geographic information systems), as well as “predictive analytics for business,” which became an overutilized buzzword in its own right. Also, anything in the marketing space. all of the above mentioned have seen a great leap in development over the past years, and many solutions being marketed now seem to be minuscule improvements or knockoffs of other, well-functioning companies already.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
We are focusing on investments in the R&D space. We invest in highly experienced teams, where the company has a working, marketable product, with an MRR of +$50,000. We are geographically agnostic. However, we focus on startups from CEE (or pan-European).

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Those positioned to thrive are those in software, therefore those relating to gaming and enterprise software solutions. This is due to the fact that Poland has the largest pool of developers in the CEE region, with great experience and competitive prices for their services. We are excited to see Vinted and Brainly as marketplaces explode, as well as the medtech sector.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Definitely a word to be used here is that of “growing potential” — the CEE region is growing more than 2x as fast as Western Europe with regards to capital invested. Poland has a pool of highly motivated founders and great developers, which boosts the region’s attractiveness as a whole.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
We predict that cross-country borders will cease to matter as much. There is already a whole lot of cross-regional deals taking place. COVID shows that deals can be struck online, without physical appearances and meetings, thus making the future of cross-border deals more probable and more efficient.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
In general, marketplaces are seen to be hurting, along with enterprise software, as a result of the general economic slowdown. Opportunities that startups might make the most of (if they’re quick and responsive!) is to search for grants (many are available in the EU), as well as take this time to consider optimizing costs, creating a leaner, more sustainable business model, rendering the startups themselves as more efficient and focused on organic growth.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
COVID-19 definitely broadened our geographic horizon in our investment strategy. However, apart from that not much has changed, since the companies we target, with MRR above a certain point, are already pre-disposed to fare better during the crisis than other, earlier stage startups or marketplaces that are having difficulties as a result of the pandemic. Apart from this, extending the sales process, higher CAC, the inability or reluctance to pay from clients, and illiquidity, makes this a worrisome time for all nonetheless.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
May was a good month for many of the startups in our investment portfolio, thus seeing a glimpse of hope and return to normality. Clients have also begun paying our startups after a brief reluctance to, as they themselves had to regain a balance and revenue streams following on from the pandemic. Companies are slowly beginning to cope with the pandemic as the new normal, people are returning to the offices, all which points to the wheel beginning to spin again.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
There have been a couple of defining moments that have regained our confidence in the market on the whole: Companies had enough runway to last the first months that were hit hard by the pandemic. Investors, despite the crisis and lockdown, were eager to finalize rounds. The panic surrounding the pandemic begun to subside after 1-2 months, and has now been eradicated as people are returning to the new normal. People have begun returning to the office; churn was relatively low (despite predictions otherwise).

Any other thoughts you want to share with TechCrunch readers?
Every crisis teaches us something. This one was no different. This one definitely taught us that: “Cash is king”; have other business models ready to add on top of the main one (such as in Tourmedica, one of our portfolio companies, that has added other business models on top of their overarching, existing one).

Rafał Roszak, investment director, YouNick Mint

What trends are you most excited about investing in, generally?
Health care, industry 4.0, RPA.

What’s your latest, most exciting investment?
2040.io, HEART SENSE, AI Busters.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
There are not enough startups with real tech background advantage (and knowledge about the specificity of the sector) in real estate business.

What are you looking for in your next investment, in general?
Responsible people focused on achieving the goals we agree on.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
Smart homes solutions or else: B2C hardware in general.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
99%.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
To thrive: cosmetics, pharma, advanced IT services (RPA solutions), e-commerce. Not to thrive: events solutions, short-time consulting solutions, lifestyle goods, HoReCa, gig economy.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Lots of seed and pre-seed investment opportunities across Poland not only in Warsaw (capital city). Strong networks in particularly business sectors with people open to pass the energy and projects. Lots of investing teams with PFR fund-of-funds (one of the biggest in CEE) backing, including first-time teams. Clear need in terms of second round investors.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
I’m not afraid of it. At this point, apart from the slowdown in the procedure of contracts with corporate clients, we have not noticed the effects of the pandemic affecting startups in our portfolio.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
As for our investment focus (RPA, Industry 4.0 and pharma) is business as usual.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
The impact of COVID-19 is likely to be felt in the second half of the year, when we’ll be looking for second rounds for our portfolio startups and co-investors for new pipeline.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
I was afraid that our new fund would not start or delay its start, but — despite the need to change procedures in times of a pandemic — the investor did not withdraw.

Any other thoughts you want to share with TechCrunch readers?
“The people that are trying to make the world worse never take a day off, why should I. Light up the darkness”  Bob Marley ;)

Michal Mroczkowski, partner, Market One Capital

What trends are you most excited about investing in, generally?
At Market One Capital we invest in European marketplaces/SaaS-enabled marketplaces/SaaS/network effects platforms at seed and Series A stage.

What’s your latest, most exciting investment?
Genially.

What are you looking for in your next investment, in general?
Team with industry expertise, strategic thinking and agile iteration, unique market understanding, great initial traction.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
HR, e-scooters operators, fintech, gaming, food delivery, loyalty apps.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
Less than 50%. We invest all over Europe. Got around 40% of the portfolio based in Poland.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Well-positioned: marketplaces, deep tech, fintech. Endangered: SaaS (not excellent sales teams, local businesses). Great companies in the region: Packhelp, Symmetrical, Docplanner, Brainly, Grammarly, Vinted. Speaking more broadly I’m excited with virtual goods/services network effects platforms (for instance HackerOne) and online infrastructure platforms.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Heating up. More and more investors from more developed hubs like London, Berlin or SF. VCs invested in PL: Khosla, Hoxton, Accel, Point Nine, etc.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
No.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
Proptech, travel. For proptech, it could be the case to revamp infrastructure -> buying completely digitally, e-notary, etc.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
Biggest worry: runway. Biggest advice: extend runway and focus on product.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
Didn’t have a moment of doubt or less hope.

Marcus Erken, partner, Sunfish Partners

What trends are you most excited about investing in, generally?
Deep tech; startups building unique data sets.

What’s your latest, most exciting investment?
Aether Biomedical.

What are you looking for in your next investment, in general?
Founder market fit.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
B2C (hence, our focus on B2B).

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
100%.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Deep tech, B2B. Companies: Molecule.one and Aether Biomedical. Founders: Piotr Byrski and Dhruv Agrawal.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Overall, the ecosystem is still in its infancy. This has both pros and cons. Pros: Tremendous growth potential. Many more promising startups than promising early-stage investors. Cons: Startup infrastructure still needs to be built.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
Generally, there is a lot of migration from Ukrainian founders to Poland (in particular, to Cracow).

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
Luckily, we are only invested in digital health, biotech and internet infrastructure. All of which are doing fine right now.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
[COVID] has not affected our strategies. No pattern of worries. Every founder reacts differently to the current situation and hence requires personalized advice.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Significantly more customer interest from big pharma for one company.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
COVID-19 is tough. Still, it is a much-needed dress rehearsal for the world. With all its learnings, the world stands a much better chance at a more dangerous pandemic, which we will likely face in the years to come.

Borys Musielak, partner, SMOK Ventures

What trends are you most excited about investing in, generally?
Gaming and digital startups.

What’s your latest, most exciting investment?
InSTREAMLY — a global marketplace connecting Twitch streamers with advertisers.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
Apps and platforms that help people live healthy for themselves and the planet.

What are you looking for in your next investment, in general?
Experienced founders who dream big and deliver.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
Telemedicine, car sharing, e-scooters.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
More than 50%.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Sectors: Esports, gaming, AI-based products.
Startups: SunRoof, Omnipack, Superbright, Syntoil.
Founders: Lech Kaniuk, Tomasz Kasperski, Wojtek Podgorski, Martyna Sztaba.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Warsaw has been the number one city in growth of seed VC funding over the last five years in Europe. They are excited about what comes of this — a lot of series A deals coming soon with top European VCs involved.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
Growth of Wroclaw and Cracow due to the fact those cities have the most engineering talent currently working for boring software houses. The losers will be old Europe — France, U.K., Benelux.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
We focus on gaming and digital, so almost unaffected by COVID or even dare to say benefitted from it.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
Only Smart Hotel has been affected but as the hotels go back to business now and need social distancing-friendly tech I’m not worried about them either.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Esports definitely — has been hitting historic numbers.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
Professionally it’s been the best year of my life, but as for 2020 in general there is not much hope I’m afraid the way we’re going about the world.

Mathias Åsberg, partner, Nextgrid

What trends are you most excited about investing in, generally?
Our full focus is artificial intelligence, Especially deep learning and reinforcement learning.

What’s your latest, most exciting investment?
Syndic.ai.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
AI overall overlooked.

What are you looking for in your next investment, in general?
Innovation based on modern AI technologies.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
50/50.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
The artificial intelligence business [and] Poland are in a great position to produce deep tech/AI-based businesses.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Deep tech/AI.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
Nothing has changed for us. We attract business worldwide.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
Advice: Don’t stop moving forward.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
Continued breakthroughs in AI technology. We believe it’s very important to accelerate the phase of innovation in times like this. There are big problems to solve.

Kuba Dudek, SpeedUp Venture Capital Group

What trends are you most excited about investing in, generally?
Energy storage, electromobility, industry 4.0, AdCOmputing.

What’s your latest, most exciting investment?
DevSkiller.

What are some overlooked opportunities right now?
Marketplaces B2B (especially in field of industry).

What are you looking for in your next investment, in general?
Energy, health tech, medtech, electromobility.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
Carsharing (everything with “sharing”), marketplaces B2C.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
50% (investments in Poland — 70%).

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Infermedica, Worksmile, Nomagic, VersaBox, PhotoAiD, StethoMe.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Our startup ecosystem is growing. We have great support from government (PFR — public money), we have great engineers in Poland and low costs of production.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
I think most of the new startups are going to be found in big cities like Warsaw, Poznan, Krakow, Gdansk, Wroclaw and Lodz.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
Solutions from retail sector and electromobility and sharing stuffs (e.g., cars, bikes, etc.). Opportunities: e-commerce, health tech, communications solutions, manufacturing, edutech.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
Take your chance during the pandemic. Think about clients and their needs.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Looking for new specialist to join the company. New opportunities and bigger online market.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
We’re more than happy that none of our portfolio companies suffered because of COVID-19 and also that all of our investment processes were continued without any obstacles.

Marcin Laczynski, partner, Next Road Ventures

What trends are you most excited about investing in, generally?
We are a generalist, nevertheless we are most excited about digital disruption.

What are some overlooked opportunities right now?
I wish to see startups offering more disruption either in terms of technology or business models. Compared to Western European countries or the U.S., the Polish ecosystem still has some catching up to do.

What are you looking for in your next investment, in general?
Team, innovation that solves an existing customer pain, market size, right timing.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
All kinds of B2B solutions without a distinctive and defensible level of innovation — e.g., CRMs, HR cafeterias, etc.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
70% in Poland, 30% CEE.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Blockchain, data security, IoT.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Warsaw has the largest regional startup ecosystem in Poland so the investment climate and opportunities are very well-perceived by investors from other parts of Poland and an increasing number of European investors.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
Yes I do.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
Tourism, travel, business travel, temporary rentals, offices and hotels will suffer the most (not mentioning traditional retail). Apart from the obvious opportunities that facilitated remote work, e-commerce and social distancing, we see significant opportunities in last mile deliveries, data security, medtech.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
Facing the risks of the second wave of lockdowns, uncertain macro situation, prolonged investment processes, etc. we put loads of attention into company’s cashflows, burn rates, founders’ abilities to adjust to the rapidly changing environment. Our advice is: Optimise your costs, manage your cash flow carefully, cherish your existing customers, stay in close contact with the market and adjust your sales strategy accordingly.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
Against all odds people rapidly adjust to the new normal.

Michał Rokosz, partner, Inovo Venture Partners

What trends are you most excited about investing in, generally?
Overall, we’re a sector-agnostic fund, though some fascinating trends we’ve recently looked at are biotech (AI for chemical synthesis planning), construction tech (software for analyzing drone-captured data), or cloud infrastructure (infra-as-code management platform).

What’s your latest, most exciting investment?
We’ve been fortunate enough to co-lead (along w/ Hoxton Ventures) a pre-seed round of Spacelift. Run by a great duo of Marcin (ex-FB, ex-Google, ex-Deliveroo) and Paweł (ex-Rocket, successfully exited last company), the company builds a specialized, Terraform-compatible continuous integration and deployment (CI/CD) platform for infra-as-code.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
Till today, many industries haven’t moved to the 21st century. Automotive, real estate or B2B marketplaces are still operating either as if there was no digitization or based on first digital models. The constant development of AI and NLP allows for many more potential use-cases these days across all industries. We wish to see more startups leveraging current technical capabilities in those fields. As startups grow into globally successful companies, they create both second-time founders and senior operators willing to build their own “next big thing.” We’re eager to see more and more experienced entrepreneurs emerge as the whole ecosystem keeps growing — the more people see billion-dollar businesses firsthand, the more quality founders, and more quality funding available there will be. It’s already happening.

What are you looking for in your next investment, in general?
Courageous founders building exceptional tech or product that delivers clear value for its users, on a market that is big enough to reach $100 million+ of sales. The higher value, measured by clients’ excitement and economic benefits he gets, the better.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
Many areas seem to already be too tight for new entrants to succeed, yet we constantly see newcomers taking certain industries by storm via tweaking their product or go-to-market just enough to attract new client groups or steal the existing ones. Though we’re not a consumer-oriented fund, social media always seems improbable to build the next big thing, as you need millions of users to gain traction, then many more to keep growing exponentially. Now looking back to 2017-2018, who would have thought TikTok to reach its scale?

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
Our focus is Poland and the entire Central and Eastern Europe region. Currently, the split in our portfolio is five deals (~60%) in Poland and three in other CEE countries (~40%), and it will probably remain somewhere around that. We can also invest outside of the region. However, most of the focus remains here.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Some of the most successful Polish startups are DocPlanner, Booksy, Brainly and Allegro (though it didn’t follow the typical “VC way”), which heavily rely on network effects and work in B2C or B2B2C models. We have yet to excel in enterprise startups. Fortunately, companies like Infermedica or Nomagic are paving the way and winning hearts of both international corporations and investors.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Poland (and Warsaw as its hub), is arguably the fastest-growing ecosystem in Europe.. Moreover, Central and Eastern Europe (which itself is also the fastest-growing among all regions) has more developers than the entire U.S., while presenting cost advantage and comparable (or sometimes better) quality. People here are helpful and friendly, making the ecosystem open to all new participants. In a nutshell, Warsaw as a hub for CEE is similar to Berlin a couple years back — relatively cheap opportunities and massive growth ahead — be sure not to miss it!

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
I wouldn’t expect the pandemic to have a strong, direct impact on startups moving outside of major cities. Most hubs will still remain unchanged as HQs, though remote positions should continue to gain popularity.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
While multiple fields have been affected, industries like travel or events took the biggest hits and still have a long way ahead before full recovery. On the plus side, such areas will be the ones undergoing the most radical shifts, thus creating enormous opportunities. Closest example? Hopin raising a $40 million Series A after it grew in revenue from $0 to $1 million+ ARR in three weeks.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
We have not applied any specific changes to our investment focus — once we made sure all our portfolio companies are assisted, not much has changed except for taking online meetings instead of personal ones. Having said that, we’ve participated in five new rounds since March, supporting Polish and international founders on their quest. As for the advice — the situation now seems relatively stable, but founders should stay alert and make decisions having in mind both short-term and long-term perspectives that may go either way.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
We basically see two scenarios happening among our portfolio: (i) Companies that benefited from COVID trends are still doing well. (ii) Companies that got hit by COVID are recovering. Some have even beaten their pre-pandemic results, while having tighter budgets/less cash burn.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
Switching from office-only (outside of occasional WFH days) to remote-only was way smoother than we expected. Moreover, in the current fund, we’ve done more investments during COVID (sometimes without ever meeting the founders) than before it. This shows that businesses can grow and leverage external funding even during the toughest time.

Any other thoughts you want to share with TechCrunch readers?
Crisis is when great businesses are built. As a founder you can not let this one go to waste.