Sramana Mitra: What is the geographical boundary? When you say Central European investments, how far do you go? What are the four regions? Obviously you have Prague and surroundings. But what else?
Ondrej Bartos: So when we talk about Central Europe, it’s basically the region between Germany and, sort of, Ukraine with those two excluded. So it’s countries like Czech Republic, Slovakia, Hungary, Romania, Bulgaria, Croatia, and Slovenia. This is the space that we operate in.
Sramana Mitra: The 42 that you’ve done so far, what is the bulk? Is it 50% Prague? 70% Prague? What’s the distribution?
Ondrej Bartos: We consider the Czech Republic and Slovakia, which actually used to be one country not that long ago, our home market. About 40% of our investments have been originated in those two countries and the rest is the rest of the region.
Sramana Mitra: Are there any other hotspots in those other places besides Czech Republic and Slovakia?
Ondrej Bartos: Yes, we’ve done a number of investments in Poland, which is the largest market in our region. Also, Poland has been pretty active and vibrant as a market. We’re big fans of Romania. As you might or might not know, our current most successful startup is the Romanian company called UIPath, which happens to be the first unicorn born out of Romania.
We’ve done two more investments in Romania. In general, that’s the place where we see a lot of action, activity, and hunger. What’s important to say is that we only look at startups with global ambitions. We aren’t excited about copycats or too niche places. We only invest into the ones that can make it big eventually.
Sramana Mitra: Just some context for the audience. There have been a couple of very successful consumer anti-virus companies out of Prague. AVG and Avast eventually merged and today is a larger company. That’s probably the first major success story out of that region. Then we’ll double click down to UIPatt. I want one question before we do that. What do you like to invest in? Is it B2B and B2C? What’s your preference?
Ondrej Bartos: We’re not specialized being in a region like Central Europe. We don’t have the luxury of our peers in the Bay Area. How we position ourselves is, we look at anything in technology, either production technology products or using technologies in a significant way. So, we can do either B2B or B2C.
If you ask me three years back whether we would do anything in hardware, I would’ve probably told you no. But tada! We’ve made two hardware investments as well. What we really care for is the big ambition. I can tell you that most of our investments are B2B. Our most typical investment or portfolio company is an enterprise software.
It’s not because we prefer those kind of companies, but it’s just because it’s a lot more probable or likely that an enterprise software company succeeds coming out of Central Europe than a consumer company. I don’t think a Facebook could’ve been born in Hungary.
Sramana Mitra: Well not in 2004. Skype was born in Estonia.
Ondrej Bartos: Yes, Skype was born in Estonia. I still believe that the founders of Skype had devious exposure and access to the Silicon Valley.