Catalyst launches new fund to invest more than EUR 40m in breakthrough technology companies

Mihai Cristea 02/12/2020 | 16:37

Catalyst Romania, backed by 3TS Capital Partners, is deploying a second venture capital fund targeting TMT companies, following an initial closing with institutional and private investors. Catalyst Romania Fund II, with a target fund size of EUR 40-50m, has been established as a result of being selected through European Investment Fund’s (EIF) call for expression of interest to invest capital from JEREMIE Romania Reflows and the EU’s InnovFin Programme. In parallel, Catalyst has secured significant financial support from a plethora of notable private investors.

 

Catalyst Romania Fund II is the first ever 2nd-generation early stage venture capital fund in Romania. It follows Catalyst Romania Fund I, operated by 3TS’ local management team and financed through the JEREMIE Romania initiative. The first fund invested more than EUR 12m in 10 well-known Romanian tech companies in recent years, including Elefant.ro, Vola.ro, Vector Watch, AvocatNet.ro, SmartBill, GreenHorse Games and Omniconvert. Catalyst Romania Fund II will continue focusing on tech companies that have already launched products into their target markets and have experienced management teams. During the initial investment period, the fund plans to provide between EUR 1m and 3m to 16 Romanian companies to support their growth objectives and international expansion plans. Catalyst also brings indispensable company scaling know-how, resources, business partners and co-investors from across Europe, North America and Asia. Catalyst Romania II will pursue investment opportunities in other Eastern European countries and elsewhere, as long as companies have business substance in Romania, through operations, development teams or sales.

„We are deploying a new VC fund at the right moment in time for the Romanian tech ecosystem. The industry is facing a new level of adoption fueled by Covid-19. Despite the human, social and economic turmoil, the pandemic pushes us to advance to a safer, more flexible and digital world on a faster pace than usual. We are ready to provide much needed financial resources as well as our vast expertise in supporting the growth of software, internet and other TMT businesses in Romania and abroad”, stated Marius Ghenea, Managing Partner Catalyst Romania.

EUR 15m has been committed to Catalyst Romania II from JEREMIE Reflows and EIF’s InnovFin Equity Programme. The rest of the fund’s capital is secured through the participation of more than 30 private investors – seasoned local entrepreneurs and senior executives from various industries, including a number of portfolio companies’ founders from Catalyst’s first fund.

“We know the Catalyst Romania Team personally for quite some time and we have been impressed by their existing portfolio and their positive involvement in the local entrepreneurial ecosystem throughout the years. It is great to see their achievement of being the first team who manages to raise a second Venture Capital Fund in our country, and we are happy to be part of it!” said Adrian Mihai, Managing Partner FAN Courier.

JEREMIE Romania is a set of financial instruments initially supported from Romania’s structural funds during the programming period 2007-2013. Following the end of the programming period, EIF continues to act for and on behalf of the Government of Romania to manage the resources returned from the initial implementation under a new agreement signed in September 2020.

“The JEREMIE initiative enters a new phase. While reusing financial resources that return from previous instruments implemented in Romania, it continues to help forge an ecosystem of equity investments, pooling both public, institutional and private investors. It is JEREMIE’s best asset, apart from directing financing and investments into Romanian SMEs, in helping companies grow, develop and create jobs. I wish the experienced Catalyst Romania team the very best”, added Pablo Millan, Head of Unit, Mandate Management – Equity with the EIF.

Catalyst Romania has a proven track record of investing and growing technology businesses.  The infusion of growth capital, business expansion best-practices, strategic guidance and access to new networks provided by the Catalyst team has helped drive an average compounded annual revenue growth rate of 40% across current portfolio companies. Catalyst Romania Fund I has carried out two exits through transactions with strategic acquirers, while three other companies are currently in exit processes. Over the next years, the first fund will completely divest its portfolio through transactions with strategic or financial investors, or through listings on stock exchanges in the region including the Bucharest Stock Exchange.

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