Emerging as an Eastern powerhouse

#News(Startup) [ via IoTGroup ]

Earlybird Digital East Fund — a fund associated with Germany’s Earlybird VC but operating separately — has launched a €200 million ($242 million) successor fund.

As of Q4 2020, the fund’s metrics are: Investment Multiple: 24.9x Gross IRR: 104.4% Net IRR: 84.1% So in VC terms, they have done pretty well.

The fund’s focus will remain the same as before: a seed and Series-A fund focusing on what’s known as “Emerging Europe”; in other words countries stretching from the Baltics to Central and Eastern Europe and Turkey. Dan Lupu a Romanian investor who had covered the region for Intel Capital joined them and together they raised the Earlybird Digital East Fund I ($150 million) in 2014 focusing on CEE and Turkey. Thereafter between 2014 and 2019 the fund invested in UiPath Hazelcast and Obilet.

Digital East Fund was an investor in all of them. I interviewed Sertoglu to unpack the story of Earlybird Digital East Fund. He told me DEF has achieved a 17x investment multiple on a $150 million fund. He thinks “this might be the biggest European VC fund performance in history and it’s not coming from Berlin it’s not coming from London but it’s coming from Eastern Europe. We have been told by some of our LPs that they think we’re the top 2014 vintage VC fund in the world nobody’s seen stronger numbers than this.” DEF’s emergence from Turkey together with its relationship with a fund in Berlin was not the most obvious path for the VC fund.

“One thing we realized early on was that we could invest with our own capital and syndicating to our friends but for follow-on funding we’d always have to go global. So that’s when the first fund idea came out ” said Sertoglu. But we became the largest fund in the region and decided to focus on this Series A gap where we felt that there was this big opportunity because of the way we think Series A is still very much a local play.” I think very few funds around the world can say that they see the majority if not all of the opportunities that fall into their mandate ” he said. Sertoglu concluded: “So we now have fresh capital coming on the heels of a very successful first

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