SMOK Ventures in 2024: New Fund, 10 Investments, and Focus on CEE Diaspora
2024 was a pivotal year for SMOK. We announced our second fund focused on Eastern European startups launching in the US. We invested in ten new companies across five countries, increased our ticket size and set our future focus on CEE diaspora founders. Welcome to SMOK’s 2024 recap!
Doubling Down: A New $25M Fund for CEE and Diaspora Founders
At the beginning of 2024, we closed our second fund, securing a little over 25 million USD to invest in startups at the earliest stages of their development. This is more than twice the size of our first fund and 10 times more when considering the private capital contribution to the fund. We can proudly claim having over 70 private investors among our limited partners, mostly entrepreneurs from Poland, Eastern Europe, and the diaspora. We are now a truly entrepreneurs for entrepreneurs kind of fund!
10 Startups, 5 Countries: Our 2024 Investments
We invested in 10 new companies this past year, including 6 from Poland 🇵🇱 and one each from Ukraine 🇺🇦, Bulgaria 🇧🇬, Serbia 🇷🇸, and Latvia 🇱🇻. Among the already announced investments are:
- Gotiva — a Polish/Bosnian game studio led by Sebastian Szczygieł, previously co-founder at a billion dollar studio Huuuge Games,
- Juo — a subscription toolkit for modern ecommerce led by an experienced team out of Wrocław, Poland,
- Proteine Resources — insect-based beef replacement for pets, an autonomous factory food tech startup run by Bart Roszkowski, previously co-founder at Alokai, our fund 1 portfolio startup.
We’re also thrilled about the follow-on rounds raised by startups from our first fund, like Authologic’s impressive $8M Series A led by Open Ocean. Our early backing helped fuel their journey to become leaders in identity verification technology. New rounds have also been secured by MX Labs (led by Tilia) and Return Entertainment (by Samsung), among others.
SMOK is taking over CEE by storm!
The biggest surprise for me this year has been how quickly we’ve managed to break through and gain recognition among the top founders across the Central and Eastern European region. So far, we’ve invested in entrepreneurs of ten nationalities, including from Poland 🇵🇱, Ukraine 🇺🇦, Belarus⚪ 🔴⚪, Latvia 🇱🇻, Czechia 🇨🇿, Croatia 🇭🇷, Bulgaria 🇧🇬, Serbia 🇷🇸, and Bosnia 🇧🇦.
Nearly 60% of the startups we’ve backed with our current fund are headquartered in Delaware 🇺🇸, while just over a quarter are based in Poland. However, all of these US-based startups are led by founders originating from the CEE region and most employ software engineering and operations teams in their home countries.
Ticket sizes and valuations are increasing in the CEE
Our average ticket size is also gradually increasing. Most of our investments go to experienced entrepreneurs, often those who have already had a successful exit and are now building their next ventures. Valuations for these kinds of businesses, even at the very early stages, have risen significantly in recent years.
Back in 2020 pre-seed rounds typically came with valuations of 1–2 million USD in the region. Now, for serial entrepreneurs from CEE, most rounds are valued at around 5 million USD or more. This means we often need to invest 500k USD per startup to secure the 10% stake we aim for at pre-seed.
It’s even pricier in the diaspora, but we’re often willing to accept that given the higher chances of success for companies whose founders are already based in the U.S., operating in the largest market, and selling their products there from day one.
Our Biggest Misses
Two of such founders that we should have backed, but we did not were Laurențiu-Victor Bălașa of Bible Chat and Filip Kozera of Wordware.
Laurentiu came to us with his previous product, a reading companion app called Underline (which later rebranded to Basmo and eventually to Bible Chat). Both myself and my partner Diana were convinced Laurentiu had all it takes to become a top entrepreneur — the ambition, the attention to detail, the way he thought about the product and how he listened to his customers. However, we both did not believe the world needs another reading companion app and decided to pass only to see him pivot to Bible Chat that is currently the fastest growing consumer startup out of the CEE region making over 15M USD in subscriptions a year.
I met Filip via intro from our venture partner Dan Bragiel when he was still working on his previous startup, Techstars-backed Kristalic. I loved Filip as a person, but I did not believe the product made sense. Filip soon left the company and founded a new one called HeyDaily. We met in Warsaw and discussed the idea back in 2021. I hated the concept. It was basically an Onlyfans for non-porn influencers (which unfortunately ended up being used mostly by astrologists, forecasters and similar people). I passed again. Filip later pivoted his project to what is now Wordware, and raised the largest ever seed round after graduating from Y Combinator. Did I know Filip had what it takes to become a great entrepreneur? Sure I did. Have I invested? No, I did not.
In both cases we haven’t invested because wehated the original idea and wedid not take into account that amazing entrepreneurs like Laurentiu and Filip will either figure it out or pivot to something that makes more sense as a business. Next time an amazing entrepreneur comes to me with a stupid idea, I wire no matter how much I hate the business. Take my word for it! :)
Our Investment Thesis Remains: Betting on Exceptional Founders
The rise of AI is set to transform how startups are built and disrupt industries on a massive scale. Do we have a crystal ball to predict which industries will be disrupted first—or how startups will fundamentally change? Not at all. But one thing we’re certain of is this: exceptional founders will always find ways to build exceptional companies, regardless of the landscape.
In 2024 we backed companies in various industries: logistics, cybersecurity, gamedev, food tech, e-commerce, software engineering, collaboration, education and energy.
In 2025 we won’t be tying our investments to any specific industry theme, either.
While our expertise means you’ll continue to see plenty of software engineering tools and game development companies in our deal flow, our primary focus remains unchanged. We’re here to back the most extraordinary founders from the CEE region. They know better what to build. We’re only here to make it a little bit easier with a quick wire and a timely intro.
Looking Ahead: A Stronger Focus on CEE Diaspora in 2025
In 2025 and beyond we plan to focus even more on investing in the Polish 🇵🇱, Ukrainian 🇺🇦, and broader Eastern European diaspora in the United States and the United Kingdom.
After two years of investing in entrepreneurs building their businesses in the US market while maintaining back offices in CEE, we’ve seen this setup offer a significant competitive advantage compared to founders building and selling locally.
We want to convince CEE diaspora founders working abroad that having SMOK as an early investor in their startup — alongside local angels and funds — can be a big win for both sides.
To achieve this, we’re increasing our activity in key hubs like London 🇬🇧 (where we recently hired Sonia Piórek as a venture scout), the Bay Area🌉 (where our venture partner Dan Bragiel operates), and New York🗽 (where we don’t have a representative yet but are open to exploring such collaborations).
Are you a CEE diaspora founder raising your first round of funding?
- We’re approachable (see below).
- We act very fast (I committed during initial meetings multiple times).
- We commit early (often alongside your first angels).
- We have presence on both US and CEE markets.
…which (hopefuly) makes us a great fit for diaspora founders looking for initial funding.
Are you a CEE diaspora founder raising your first round? Let’s talk! With a strong presence in both the US and CEE, and a track record of quick decisions, we’re the partner to kickstart your journey. Email me your deck at borys@smok.vc.
