• American-Polish ffVC’s new Red & White fund is a joint venture with Japanese JBIC IG Partners
• The fund’s goal is to bridge the startup/VC ecosystems of CEE and Japan
• Promising local startups get a fast track to the Japanese market
• JBIC IG Partners allocates two employees to ffVC in Warsaw to facilitate to collaboration

This June, American-Polish venture fund ffVC announced its second CEE-focused fund, Red & White. It amounts to EUR 60M and aims at supporting enterprise software, industrial tech, and sustainability startups in their Late Seed/Series A rounds. The fund is ffVC’s joint venture with JBIC IG Partners.

Founded in New York in 2008, ffVC has by now invested in over 90 companies (including 30 exits) with a total enterprise value of USD 15B, the most famous portfolio startups being Cornerstone OnDemand and Socure. In 2020, ffVC became the first American VC to open an office in Europe (outside London) as the Warsaw office was opened and the first CEE-focused fund was launched. Its portfolio includes such recognized names as ReSpo.Vision (highlighted in one of ITKeyMedia’s podcasts), Trusted Twin (highlighted in another ITKeyMedia podcast) , and almost 20 more startups from CEE and DACH.

Due Diligence for International Ambitions

The fund boasts that its portfolio companies are five times more likely to raise a Series B than the average venture-funded startup, and 10% of these startups achieve a USD 100M revenue run rate. This, of course, is largely due to ffVC’s comprehensive and rigorous due diligence process.

‘It includes a detailed evaluation of a company’s market strategy, competitive landscape and the founding team, and any other relevant information. We also conduct in-depth conversations with key stakeholders, including customers and partners. This process helps us gain an intimate understanding of the business before investing to ensure we make sound decisions,’ ffVC’s partner Mariusz Adamski explains.

Further on, the fund is convinced that the founders are ultimately in the best position to understand their markets and make informed decisions. However, partners welcome any and all constructive dialogue backed by data that can help make informed decisions.

‘They touch base with us relatively often, but when it comes to decision making and strategy creation and execution, they rely on the founders, while trying to help where they can. I respect their judgment and value their links within the US market which have been helpful more than once already. To sum up, our experience is very positive,’ ReSpo.Vision’s co-founder and CEO Pawel Osterreicher tells ITKeyMedia.

Built to Build Bridges

For Trusted Twin’s co-founder and CEO Jan Wyrwiński, ffVC’s uniqueness stems from having offices on two continents in close collaboration. ‘We already took part in two excellent events in NYC that they organized. I think that is their huge value add,’ Mr Wyrwiński shares.

Mr Adamski tells ITKeyMedia that the VC came to Warsaw with the specific intention of supporting startups looking to expand internationally. They can benefit from the access to ffVC’s global networks, resources, and expertise.

He believes that international expansion and winning commercial traction beyond the European markets is a core challenge from CEE startups. To tackle it, they must start by defining a long-term vision for global expansion and setting goals to reach that vision.

‘This requires deep research into the markets in which they want to expand, understanding the local customs, regulations and competition, as well as identifying potential partners who can help them achieve these goals. We also offer mentorship and support to build the teams and capabilities necessary for success in these markets. Ultimately, we try to seek out founders who are driven to expand globally and are working on a solution that is 10x better than the existing standard,’ Mr Adamski explains.

Thus, ffVC’s presence in the region provides local startups with the opportunity to access international markets faster than via traditional channels. ffVC sets the goal of using its experience, resources, and global relationships to create unique opportunities for entrepreneurs in the region.

Red X White

Continuing ffVC’s tradition of color-coding its funds, the new fund is called Red & White to reflect the colors of both Polish and Japanese flags and signify the bridge between the markets. As part of the new joint venture, JBIC IG Partners’ Masayuki Ohta and Taro Hizume are appointed as ffVC’s new partners and relocate to Warsaw.

‘The Central European region is home to a thriving startup scene, with countries such as Germany, Poland, Austria, Czech Republic, Slovakia, Romania, and Hungary leading the way. These countries have strong economic ties that provide an ideal environment for innovation and entrepreneurship. The region offers a wide range of opportunities that can be rolled out internationally,’ Mr Hizume tells ITKeyMedia.

Mr Ohta adds that it is ffVC’s presence on the ground on both sides of the Atlantic and track record of building bridges that make it the standout choice of partner to build this new connection between CEE and Japan.

The cooperation between the startup ecosystems of CEE and Japan isn’t unheard of (for example, Marubeni Corp.’s investment in the Estonian Skeleton Technologies), but remains exotic. Looking at ffVC’s experience in building bridges over oceans, the new Red & White fund comes right on time to fix this issue and contribute greatly to the CEE startups’ access to global capital and markets.