SMOK in 2021. Year in Review

2021 was a pivotal year for SMOK Ventures. 90% of our portfolio founders raised follow-on funding, we invested in 10 new startups, and we’re preparing for CEE expansion in 2022!

SMOK Ventures is bridging Silicon Valley to Central & Eastern Europe

We launched SMOK Ventures in late 2019 to help Polish and CEE-based founders better connect to Silicon Valley and Asia and build global businesses faster than ever. We’re doing this using the international network of contacts of our founding partner, Paul Bragiel and with the help our our local partners: myself and Diana. Here’s an update on how we’ve done so far, after two years of operations.

We invested in 10 new startups in 2021

In 2020 we invested in 12 startups and we kept a similar pace in 2021. Our focus remained the same: pre-seed and seed software and gamedev startups from Emerging Europe run by exceptional teams.

Our new investments in 2021 include:

• MX Labs — Estonia-based, personalized health diagnostics in your pocket, founded by Remi Kościelny (Vivid Games) and Przemek Jaworski (Zmorph). Here’s why we invested in MX Labs,
• Omnipack — full-stack fulfillment for ecommerce, founded by a pack of ex Westwing, McKinsey and iProspect guys. Named the best Polish scale-up of 2021 by The Next Web. Operates in Poland and Germany,
• ProperGate — smart materials delivery for complex construction sites, founded by two brothers Rafał & Robert Grudzień and a serial founder Anna Walkowska,
• Stepapp — Uber for housework with a subscription business model, founded by two 20-year olds from Sweden and Poland, recently featured by Forbes,
• Quantum Flytrap — Polish-Israeli startup providing user interfaces for quantum computing,
• Heroify — codility for marketers by Paulina Wardęga, ReaktorX alumni.
• Plan Be — digital green manager by Aga Maciejowska (exit at Evenea),
• and three more signed, but yet undisclosed investments which you’ll be hearing about soon!

SMOK portfolio startups raised over €37 million!

11 out of our initial 12 investments from 2020 raised follow-on funding in 2021 which results in an unprecedented 91.6% follow-on rate!

Vue Storefront broke the bank by raising 15.5 million less than a year from our pre-seed round on a 11x valuation multiple compared to our initial round.

Other notable rounds closed by our startups this year include Return Entertainment (€5.3M), Sunroof (€5M), Exit Plan Games (€2.5M), Authologic (€1.4M) inSTREAMLY (€1.1M), HiPets (€700k), Smart Hotel (€670k), Rezuro and Gaminate (~300k each).

Vue Storefront shocked the headless commerce world with their huge Series A in 2021

80% of follow-on capital raised from outside of CEE

Only 20% of the follow-on funding of our startups came from angels and VC funds from the CEE region while the other 80%, namely EUR 30M came from Asia, the United States, and Western Europe.

In many cases, investments in our portfolio companies were first investments of those funds in the CEE region, meaning that our founders, with the help of our partners, attracted many new investors from around the globe to the region.

Some of the exciting funds that invested in our portfolio startups include: Creandum (Sweden), Tencent (Hong Kong), colopl (Japan), earlybird (Turkey), Paua Ventures (Germany), Verge Healthtech (Singapore), Xffirmers (US), Supernode Global (UK), Sisu Game Ventures (Finland), RealtyCorp (UK), Peak Capital (Netherlands) or Bitkraft (Germany).

Angels who co-invested with SMOK include world’s most successful founders like James Park (Fitbit), Aaron Patzer (Mint, Carbon Health), Ragnar Sass and Martin Tajur (Pipedrive), Niklas Hed (Rovio), or Michał Kiciński (CD Projekt RED, Mudita).

We’ve always told our founders that SMOK is the last check you’ll ever need from Central and Eastern Europe and now we’re proving this every day with hard funding data.

Y Combinator headquarters in Mountain View

Two of our startups took part in Y Combinator

At SMOK we have a special path for startups willing to go through Y Combinator, led by our venture partner, SF-based Dan Bragiel.

Dan spends time with the founders refining their application, listening to their pitch and providing feedback. The founders are also introduced to dozens of ex YC alumni, both from Poland and the US, who further help out by providing valuable feedback and recommendations on pitching and presenting to YC partners.

Two Polish startups took part in the world’s best acceleration program in the batch of Winter 2021: Vue Storefront and Authologic. Both are in our portfolio, which makes us super proud and proves that our approach works.

Portfolio founder stats

Here are some of the more interesting portfolio stats based on the current portfolio as of December 2021.

• 90% of portfolio startups were founded by serial entrepreneur(s),
• 60% of portfolio startups were founded by founder(s) with previous exit(s),
• 45% of portfolio startups include a female co-founder. One of the teams is all-female (Plan Be).
• Our startups have on average 2.7 co-founders.
• Average age of our founder is 36.2 while the median age is 35.

Yes, 45% of SMOK startups are now female-founded

That’s correct. Almost half of all startups we invested in have at least one female founder, which is 20 percentage points higher than a year ago.

Even though we don’t have any official strategy regarding diversity (i.e. we invest based on merit in the best teams we can find), we believe that the fact that our team is diverse itself (we’re one of the few CEE-based funds with a female founding partner) helps us on evaluating teams with less bias.

We’d love to keep this ratio going forward!

With some of our female founders. I’m definitely having the most fun on this photo.

Dealflow stats

Just to prove to you that we have a CRM system (Streak FTW!) here are some stats from analyzing our pipeline in 2021:

• We’ve seen over 1000 deals. This includes all the projects, including spammy, non-personalized e-mails.
• We’ve analyzed 513 startups. The rest we immediately filtered as out of scope because of geography, stage or industry.
• We met with 127 startups, i.e. either an in-person meeting, or more likely, a zoom call.
• We deeply analyzed 59 of the above. This usually means a few meetings, early DD calls, time spent analyzing the market and the competition.
• 20 made it to the last stage — i.e. a call with either Dan or Paul Bragiel — “BB” aka Bragiel Brothers stage.
• We ended up investing in 10 new deals in 2021.

SMOK.vc pipeline in 2021

Anti-portfolio

The startups we either missed or passed on form our anti-portfolio. The anti-portfolios of most VCs look way more impressive than their actual portfolios and it’s no different at SMOK.

Some of our biggest misses are:

• RAMP Network — we had a chance to invest at ~€6M valuation. The latest 46M round by Balderton valued the company at least at €200M (valuation has not been disclosed).
• Sat Revolution — we considered investing at around ~€10M valuation in early 2021. Virgin Orbit just invested at €132M.
• Other amazing startups we either rejected, missed, or could not invest for other reasons include Pilot, GamerHash, Hiro, RespoVision, Spacelift, Enso, nomagic, merXu, Formation, MyContainer or Mindgram.

We obviously wish all the best to all the above :)

What’s next for SMOK in 2022 and beyond?

We’ve had a great year here at SMOK. We rose to become the first-choice fund among serial entrepreneurs in Poland. Next challenge is to try to repeat this success in the larger CEE region!

In the past few months I talked a lot with entrepreneurs and community leaders from the whole CEE region and I’ve heard common complaints:

• “Local VCs are arrogant and don’t understand founders (they are mostly ex finance guys).”
• “Everyone just waits for traction, no one invests pre-seed / pre-product / pre-revenue.”
• “Investors promise huge value-add, but what that usually means is that they want to get involved in my day-to-day operations which is not what I need from them at all. I want them to help me get customers and raise follow-on funding from outside the CEE. Most provide little or zero help in that regard.”

I believe that we have what it takes to disrupt the local VC industry by providing CEE founders with hassle-free access to capital and helping them raise more funding and grow faster to become global leaders in their respective industries.

In order to achieve the above we’re launching a new, bigger fund in 2022 where we’re hiring 3–5 people at SMOK Ventures in 2022 to help us become the first-choice pre-seed fund in CEE. I’m very very bullish on Ukraine 🇺🇦, Romania 🇷🇴, the Baltics 🇱🇹🇱🇻🇪🇪 in particular, but we’ll be sourcing deals in the whole region, so if you’re based in Moldova or Kosovo or anywhere else in CEE, you’re as welcome to apply.

If your dream is to break into VC, this might be the opportunity of your lifetime. Want the job? Just reach out!

Below are the current vacancies.

• Principal / Associate for Ukraine
• Principal / Associate for Romania
• Investment Analyst (stay tuned, job ad coming soon!)

SMOK Ventures is an American venture capital fund investing between 100k and 1M USD in early stage startups in Poland and CEE. We like gaming and software startups run by serial founders who think global market domination.