Aug 16, 2023

Presto News | H1 2023

VC news and updates on the CEE+ startup market and all things Presto

Pavel Bykov, co-founder and CEO of IP Fabric, in his natural habitat. After raising the largest Series B round recorded in Czechia in 2023 so far, Pavel and his team have a good reason to smile.

Dear partners & friends of Presto,

Welcome to our first newsletter 👋🏼‌‌
This edition covers the first half of 2023, going forward we’ll be sending quarterly updates.

We’d love to hear your feedback, so don't hesitate to let us know what you enjoy (or not so much) and what you’d like to see more of (or less of).

Time is money, so feel free to jump to the sections that interest you the most:‌‌
1. Highlights ‌‌
2. New Presto investments ‌‌
3. Portfolio fundraising | Selected companies‌‌
4. Market insights ‌‌
5. Brainfood ‌‌
6. #MeetPresto‌‌
7. Department of memes

⭐ Highlights

In H1 2023, Presto Ventures invested almost €5M into 8 companies from 4 different countries 🎉 Check the list below for details.

Since the end of Q1, market activity has increased notably, and we're proud to have played a role in this positive development. Our Fund 1 companies secured two of the largest Q2 funding rounds in the Czech Republic and Slovakia – IP Fabric raising $25M and Woltair €20M – with more sizeable rounds underway.

IP Fabric, the Czech-based market leader in automated network assurance, helping organizations manage private network infrastructures, raised $25M Series B funding led by One Peak with the participation of Presto Ventures and Senovo.

Woltair, the Czech-based climate tech platform that connects consumers seeking sustainable energy solutions with installation and maintenance technicians, raised €20M Series B funding led by Fifth Wall and Westly Group.

GoRamp, a Lithuanian transportation management software company that helps shippers source, plan, and monitor freight logistics in real time, raised $3M in Late-Seed funding led by Lead Ventures with the participation of existing backers, including Presto.

Finmap, an Ukrainian cash flow management platform for business owners to keep track their company's and personal finances, raised €1M funding led by SMOK Ventures, despite the wartime challenges and one of the founders serving on the battlefield.

🔔 New Presto investments

It's no secret Presto is a staunch supporter of the CEE region – little did we know our geo focus will literally start manifesting itself in our portfolio alphabet:

💸 Portfolio fundraising | Selected companies

Adam | €100k monthly revenue | Managed marketplace | Super-app for craftsman services
Klipy | Pre-revenue | Social network & database | GIFs and Clips monetization platform
Partory | €40k monthly revenue | B2B PaaS | Cloud manufacturing platform with a Flixbus model
Finmap | €80k MRR | B2B SaaS | Cash flow management tool for modern business

➡️ Up to 20 of our portfolio companies are currently fundraising or about to start. To learn more, please visit the Presto showroom.

💡 Market insights

‌‌Global market news

Unicorn births trended up in Q2’23. After hitting a 6-year low in Q1'23, 18 new unicorns emerged in the second quarter globally. The US accounted for half of the crop with 9 unicorns, followed by Asia with 5.
The ecosystem is witnessing a surge in companies founded by experienced operators, with 37% of new founders being serial entrepreneurs, which represents a significant increase over the past few years.
In the last days of Q2'23 we saw quite a bit of movement on the M&A scene. Large billion dollar deals (USD $7.78B in total) could be the beginning of something more sustained than a one-day burst of activity, as companies without other options start looking for buyers.

B2B SaaS environment

Retention has emerged as a crucial driver of growth within the sector. Companies that have successfully retained their customers in this tough climate have experienced growth rates at least 1.8x faster than their peers.
The proportion of ARR gained from expansion has increased from 28% in 2020 to 32% now. In comparison, the proportion of ARR gained from new business has fallen from 62% to 58%.
The funding landscape remains muted and valuation multiples have stayed low, now hovering between 5 and 10 year averages, clearly displaying 2021 as the outlier year. In the public markets, median enterprise value to revenue multiples for the largest SaaS companies have come down to 5x, well below the longterm pre-pandemic average of 8x.

For a deep-dive on these market highlights 👆🏼 follow these resources 👇🏼

VC finds its footing as headwinds weaken | PitchBook‌‌
The report provides insights into the global VC industry trends, highlighting continued growth in dealmaking activity and the increasing importance of deep tech in Europe.
First Look 2023 | State of European Tech‌‌
This report provides insights into the growth and trends of the European tech industry, highlighting the significant growth of generative AI companies and progress in early-stage funding.
State of SaaS Trends | Productiv‌‌
The last report discusses the growth of the SaaS industry, highlighting the increasing adoption of SaaS solutions by organizations, the rapid growth of SaaS companies in terms of market cap, and the projected market size of the global SaaS industry.

🧠 Brainfood

‌‌In-house thoughts worth sharing 🙌🏼

The East Hustles While the West Vacations: Investors Are Taking Notice | Presto Ventures ‌‌
Decades of relative underinvestment in the CEE region have forged some very resourceful and hardworking entrepreneurs. Our managing partner Premysl explains how this environment creates investment opportunities with great potential at reasonable valuations.
How to get rich with startups? The statistics speak for themselves | Presto Ventures‌‌
Our partner Premysl Rubes explains why early-stage investing requires the optimal mix of longterm statistics, portfolio diversification, timing, and – last but not least – the right team of founders.

Other VCs thoughts to feed your mind 📚

How to Do Great Work | Paul Graham
‌‌In this article, Paul Graham argues the key to doing great work is to find and focus on a specific problem that you're passionate about, and to work hard and smart to solve it.
Why AI will save the world? | Andreessen Horowitz‌‌
Marc Andreessen believes AI will make the world a better place, arguing that in every aspect of human activity, the ability to understand, synthesize, and generate knowledge results in better outcomes.
Consumption vs. subscription business models during downturns | Next Big Teng‌‌
The article discusses the shift in economic models for software businesses, focusing on their advantages and trade-offs related to end-customer demand dynamics, predictability of consumption patterns, and valuation implications.

👋🏼 #MeetPresto

🤓 Department of memes

Have a laugh on us.

‌‌That's it from Presto. ‌‌
Stay tuned for the next issue ✌🏼

PS: Credit where credit's due. We'd like to thank our friends at KAYA VC for the newsletter inspiration.