Sylwester Janik, MCI Management @ TMT.Ventures'09 Warsaw

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Sylwester Janik, MCI Management presentation from TMT.Ventures'09 Warsaw (http://tmtevents.eu by New Europe Events)

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Sylwester Janik, MCI Management @ TMT.Ventures'09 Warsaw

  1. 1. Venture Capital in CEE – challenges and drivers Sylwester Janik MCI Management
  2. 2. <ul><li>MCI Management </li></ul>
  3. 3. Who we are <ul><li>MCI Management SA is one of the most established and experienced private equity management firms in CEE, focused on venture and growth capital . </li></ul><ul><li>Founded in 1999; listed on the Warsaw Stock Exchange </li></ul><ul><li>since February 2001 with institutional and private investors . </li></ul><ul><li>Over PLN 300 million (~€ 90 million) * of total assets under management . </li></ul><ul><li>Four funds under management: </li></ul><ul><ul><li>TechVentures 1.0 - e arly stage and growth technology f und (VC) </li></ul></ul><ul><ul><li>Eur oVentures 1.0 - mid-market buyout fund (PE) </li></ul></ul><ul><ul><li>HelixVentures Partners 1.0 - seed & start-up technology fund (VC) </li></ul></ul><ul><ul><li>B ioVentures 1. 0 - early stage health care & biotech nology fund (VC) </li></ul></ul>* Book value of assets as of 31st Dec 2008
  4. 4. MCI’s presence in the CEE <ul><li>MCI is active across the main countries of the CEE region: Poland, the Czech Republic, Slovakia, Bulgaria and Romania . </li></ul><ul><li>8 Partners with diverse background and experience , supported by team of e xperienced investment professionals </li></ul><ul><li>Sector specialization - areas of particular interest are : </li></ul><ul><li>- Internet </li></ul><ul><li>- Software </li></ul><ul><li>- Telecom munication, </li></ul><ul><li>- Wireless & mobile, </li></ul><ul><li>- HealthCare & Biotechnology , </li></ul><ul><li>- Retail & Distribution, </li></ul><ul><li>- Cleantech (practice in development. </li></ul>
  5. 5. Diversified portfolio
  6. 6. <ul><li>VC & the CEE market opportunity </li></ul>
  7. 7. by Sequoia Capital
  8. 9. VC & the CEE market opportunity <ul><li>Fast-growing economy </li></ul><ul><li>The stability of the political, legal & regulatory environment </li></ul><ul><li>Attractive investment opportunities - success stories ( Skype, Grisoft (AVG), Bioton, etc;) </li></ul><ul><li>Well-developed exit environment </li></ul>
  9. 10. <ul><li>On average, the CEE countries grow at least 2x f aster than USA, Japan and developed countries of the European Union </li></ul><ul><li>Source: International Monetary Fund, The World Bank, Eurostat, The Economist Intelligence Unit, Goldman Sachs, Morgan Stanley </li></ul><ul><li>Political and legal stability of the region (EU regulations) gives PE/VC funds an advantage to invest in emerging market growth at a risk , that is comparable to that of Western Europe </li></ul>VC & the CEE market opportunity 2007 2008 est. 200 9 F 2007 2008 est. 2009 F (IMF) 2009 F (banks)   USA 2,0% 1,3 % -0,5% GDP Growth 6,0 % 4, 4 % 3,6% -1,9% Czech Rep. Japan 2, 4 % 0,4 % -0,4% 6,2 % 8,5 % 4,7% 1,7% Romania China 11, 9 % 9 , 8 % 6,7% 6, 6 % 5, 4 % 3,8% 0,0% Poland UK 3, 0 % 0 , 7 % -1,0% 6 , 2 % 6,5 % 4,5% 0,0% Bulgaria Canada 2, 7 % 2, 7 % -1,2% 10, 4 % 7, 0 % 4,9% 1,5% Slovakia Euro Area 2,6% 1,2% 0,1% 7, 6 % 6 , 4 % 2,5% -2,0% Ukraine 4,5% 3,4% 2,7% -1,5% Turkey
  10. 11. VC & the CEE market opportunity <ul><li>Substantial growth opportunities for PE/VC funds in relation to developed countries of the European Union </li></ul><ul><li>An emerging generation of well-educated and highly motivated entrepreneurs able to build companies successfully competing in a global marketplace </li></ul><ul><li>Majority of the region’s investment activity and new investment opportunities concentrated in Poland, the Czech Republic , Romania and Bulgaria </li></ul>PE /VC investments as % of GDP in 20 07 Source: EVCA / PEREP %
  11. 12. VC & the CEE market opportunity <ul><li>Viable exit routes for PE/VC funds due to meaningful M&A activity and developed stock exchanges </li></ul><ul><li>Venture backed companies are exited mainly by trade sale, but number of IPOs is growing dynamically </li></ul>Source: EVCA
  12. 13. Geographic interest of LPs worldwide Source: LP Allocation to Private Equity 2008, Almeida Capital survey (130 LPs)
  13. 14. <ul><li>VC in the CEE region – </li></ul><ul><li>challenges & drivers </li></ul>
  14. 15. <ul><li>EU accession </li></ul><ul><ul><li>Political as well as economic risks are much lower than they used to be and also much lower than in other emerging markets </li></ul></ul><ul><li>Improvement of ICT infrastructure across CEE </li></ul><ul><ul><li>Significatnt improvement over last 5 years (+); differences between countries and regions are still huge (-) </li></ul></ul><ul><li>„ Come back” of many Eastern Europeans to their home countries </li></ul><ul><ul><li>M anagement experience , personal networks , motivation, knowledge, start-up capital (sometimes) </li></ul></ul><ul><li>The attitude towards starting an own business </li></ul><ul><ul><li>B etween what it is in the US A and Western Europe ; the region still lacks the critical mass of people who want to start out on their own </li></ul></ul>Drivers
  15. 16. <ul><li>A n excellent academic track record and a reputation for outstanding scientific research </li></ul><ul><ul><li>S till a long way to go to leverage and unlock a commercial potential of universities, incubators and technology parks . </li></ul></ul><ul><li>T he massive capital inflow into the private equity asset class during the credit boom years </li></ul><ul><ul><li>I nvestors look outside their traditional territories </li></ul></ul><ul><ul><li>search for returns and investment opportunities at the smaller end of the investment spectrum following the credit crunch </li></ul></ul>Drivers
  16. 17. <ul><li>Entrepreneurial environment needs to improve </li></ul><ul><ul><li>I nvestments in infrastructure are needed to form stronger basis for future growth </li></ul></ul><ul><li>Wider adoption of incentives for venture capital investors </li></ul><ul><ul><li>government-sponsored programmes , tax breaks, Development of venture capital-friendly environment & infrastructure </li></ul></ul><ul><li>Language and cultural issues </li></ul><ul><li>Cost advantage of the CEE region is disappering </li></ul><ul><li>Limited number of s erial entrepreneurs </li></ul><ul><li>Equity gap - seed / early stage investments </li></ul>Challenges
  17. 20. www.mci.eu [email_address]

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