Warsaw-based SMOK has closed its $25m second fund for CEE startups

SMOK Ventures, a VC fund based in Warsaw, Poland, raised its second fund at $25M. They intend to invest in up to 35 startups from the CEE region and diaspora.

The latest close was finalized by the 23rd of January, as PFR Ventures, a Polish finance institution dedicated to fund investments, joined as a key limited partner. SMOK Fund II has already invested in 12 startups from different countries in the CEE, such as Poland, Ukraine, Czech Republic, Croatia, Bulgaria, Latvia, Serbia, and Bosnia. As a main goal in 2024, the investors point out they aim to secure at least 10 new projects. Poland would remain their primary market.

SMOK Ventures’ investment thesis includes supporting founders, who originate from Central and Eastern Europe and could be based anywhere in the world. The fund usually leads at pre-seed, following or co-leading at seed with tickets, starting from $100K to more than $1M. In terms of sectors, the preferred ones are software products focusing on software development tools, game development, and artificial intelligence. 

“We started deploying capital from the beginning of 2023, which means we are already working with teams. Over the past year, almost 300 Ukrainian teams entered our pipeline. In total, during 2023, we reviewed over 1,200 startups from the CЕЕ and have already made three investments in Ukrainian Finmap, Workee, Masthead Data” says Oleksander Yatsenko, Principal at SMOK Ventures.

Some of the highlights from their portfolio include 57hours, a Croatian marketplace for tourists seeking non-standard trips, and Gotiva, a Polish-Bosnian graphic developer startup. The latter secured €1.11M in a seed round earlier this month. An insight from their portfolio is that every third startup is led by a woman. That includes Paulina Wardega, co-founder and CEO of Heroify, a skill-testing platform for marketing and sales jobs, and Aga Maciejowska, co-founder and CEO of Plan Be Eco, carbon footprint reporting software. Moreover, 12.5% of the startups had a founding team consisting entirely of women during SMOK’s investments.

The first close of Fund II was in 2022 and remained unannounced. It included more than 60 private LPs with the majority being entrepreneurs from CEE and diaspora, such as founders of three unicorns and a former regional head of Google. 

PFR Ventures, part of the Polish Development Fund, fully owned by the Government of Poland, finances both emerging and experienced VC fund managers. The institution continued supporting SMOK II, having previously invested in SMOK I. The startups from the first fund’s portfolio are already generating over €31M revenue annually and employing more than 650 people, according to their data.

SMOK is part of a global network of funds with over $400M under management. The fund is co-managed by Paul Bragiel, also in charge of Golden Gate Ventures in Southeast Asia, Bragiel Brothers, based in North America, and more. The other two partners are Diana Koziarska, previously CEO at ReaktorX, a start-up accelerator for founders, and Borys Musielak, a tech entrepreneur. 

A woman leads every third SMOK startup, and 12.5 percent of the startups had a founding team consisting entirely of women during SMOK’s investments.

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