In 2014, Alexey Girin launched Starta Fund I with two hypotheses:
- that there is an overlooked opportunity to build an institutional grade seed-stage fund with a focus on Eastern European tech startups;
- our geographic backgrounds can help us spot and invest in great companies very early on in their lifecycle.
Since then, Fund I has gone on to invest in 13 companies. The Fund has seen one partial exit (Navigine) and one full exit via our Accelerator vehicle (Friendly Data), the portfolio companies have gone on to raise $55 million in follow on financing and the Fund has shown a TVPI of 3x in just 5 years. Clearly, the model is working.
With the launch of Fund II, it is clear to us that seed deals, especially geographically diverse ones, are there for the taking. While the companies we source are very varied in terms of industry, they do have the following similarities:
- Most are European without a US footprint
- Most have a local product that has shown proof of concept in their local market
- Most have REVENUES and TRACTION
- Most don’t have access to capital markets akin to North American founders
This is the backbone of Fund I and this continues to be our mandate in sourcing and investing in top notch tech companies for Fund II.
Fundraising update:
We are very grateful to have the support of some outstanding LP’s for our second fund. Our LPs include high quality family offices, a fund of funds and an esteemed group of individuals. Thank you all for your support.
Our target raise for Fund II is $50M. Having hit our first close in Оctober 2019, we are currently closing on additional capital from two more family offices. We hope to hit our target goal by the end of Q2 2020. Fundraising has taken up a good portion of our time but because we are a team of five, we have not missed out on our deal sourcing.
Portfolio Companies:
Since our launch of Fund II, we have invested in four companies:
- Archeads — Archeads is a prop-tech startup that allows landlords and brokers to digitize their floor plans using machine learning technology to create layouts without the involvement of architects. The company is currently launching pilot projects with its first customers in the US and is accepting waitlist applications.
- StringersHub — StringersHub is a media platform that connects professional videographers and eyewitnesses with media producers and editors who need and use video content. On the platform, media companies can issue video shoot requests or find ready-to-use footage in the gallery. StringersHub has signed some of the biggest US media networks (such as CNN, the Associated Press, and others) as clients with exclusive content production rights.
- Agrihemp — the Pennsylvania based company is the largest grower and processor of hemp-based CBD products in the state of Pennsylvania. They launched their operations in May and are currently harvesting their biomass. Their focus is on commercial GMP grade wholesale CBD products. The team has deep experience in growing, cultivating and most importantly pharmaceutical grade processing standards which differentiates them significantly in this space.
- Cognitive Talent Solutions — a leading provider of Organizational Network Analysis and Restructuring, focusing on HR and M&A verticals. CTS closed 3 major deals with multinational conglomerates including Securitas Direct, exceeding $200k in revenues for 2019. Their target revenue projection for 2020 is over $5M, collaborating with some of the world’s largest consulting companies in Asia and the US.
Accelerator update:
We are in the final two-week sprint of our Batch 8 program. We have six excellent startups ranging from a platform for creatives in music and film to an enterprise solution for developing employee skills. Several of these companies are already showing great promise with sales in the US, the UK, India and annual revenues over $500k.
The 8th cohort includes the following startups:
1) Stereotheque (Colombia) is a cloud-based platform for analytics and networking that helps individuals and companies acquire and convert their skills into jobs and collaborations in the field of music, media and entertainment.
2) OpenBusiness (Belarus) is a fintech startup for analyzing competitive metrics based on consumer behavior. The platform assesses risks and makes analytical calculations for retailers, insurance, leasing and medical companies.
3) Parsers (Belarus) conducts the extraction and visualization of data from the Internet for business development, without the need to write code and configure the process.
4) Sproutlogix (USA) uses AI to identify and develop the skills of employees in accordance with a company’s goals. Current customers include Credit Suisse.
5) ShowmeVR (Russia) is a SAAS platform that helps users make presentations, conduct conferences and present products in virtual reality without having any specific technical knowledge in programming, design and 3-D modeling.
6) Sonr (Moldova) is the world’s smallest underwater communicator that helps swimmers hear their trainer’s voice in real time, helping to improve results and communication.
Team update:
We believe we have built the premier team in the global seed-stage ecosystem. Besides founding partner, Alexey Girin, the team consists of:
- Serge Milman — Managing Partner, Serge joined the team full time in Sept 2017. His background is originally in public markets asset management where Serge went on to launch both a proprietary trading firm and a long/short TMT fund. Serge has been personally and professionally venture investing for over ten years.
- Ben Reiter — Principal, Ben is an experienced corporate professional with a multi-disciplinary background. He spent the first part of his career as an accounting analyst at a large media company, earning responsibility for analysis of over $100 million in annual receivables. Prior to joining Starta Ventures, he pursued his passion for nutrition by engaging in advanced studies in that field. Ben has an MBA in Management with a concentration in Human Resources and an MS in Nutritional Sciences.
- Anastasia Lykova — Head of Accelerator, Anastasia started her career as a communications specialist in Moscow. After several years she moved to NYC, where her love for innovation and tech led her to work for several startups, creating marketing strategies and assessing and advancing business development opportunities. At Starta Ventures Anastasia assumed the role of Director of Сommunications leveraging her strengths and background in PR and marketing, eventually advancing to Head of Accelerator Program.
- Sergey Vasilev — Partner, Sergey started his technical career in IT & telecommunications and then transitioned to the VC field working as a consultant with business angel networks and early-stage funding platforms in Moscow. Sergey maintains Starta’s startup funnels and executes technical due diligence for further investment purposes.
Additional team members:
- Aaron Chen — Associate analyst
- Ivan Terekchin — Startup scout
- Denis Tylibtsev — Corporate administration
November/December Pipeline:
- STEM-based retail chain focused on experiential activities. Concept proven in Europe. North American launch slated for Q2 2020.
- One of Russia’s top E-sports holdings that includes: 1) Three E-sports clubs under direct management & seven franchise clubs; 2) E-sports marketing agency; 3) E-sports teams with a focus on Dota, CounterStrike, Halo and more. 2019 revenues exceed $6.5M USD.
- Asian CBD grower and cultivator — one of just seven licensees in all of China.
Note
Starta Capital Hybrid Fund II has two pools in one fund.
Flagship pool — $50M fund — Zero % management fee VC fund with LP capital managed by GP.
Co-investment pool — Deal by deal vehicle allowing investors to cherry pick individual investments.
Please contact Serge or Alexey if you have any questions or would like more info.
