There is talent. There is capital. Start in Poland. I AM AN INVESTOR There is talent. There is capital. Start in Poland. 1 Poland – Country overview LOCATION In order to build a modern economy, a comprehensive ecosys- tem of innovations should be created. It would not only enable the transfer, but mainly the development of new technologies, and thus, improved performance. In a long-term perspective, it is work and capital performance that generates welfare and improves the standard of living. The key performance factors are GDP (2016) technological progress, changes in the organisation of work, as well as increased share of tangible and intangible capital in the 469 B$ 12,3 TH$ structure of production factors. GDP total (nominal) GDP per capita Most of Central European economies took advantage of the 1st, 2nd and 3rd industrial revolution only to a limited extent. GDP 3% 40% 64% However, at present they have a great opportunity to use the by sector AGRICULTURE INDUSTRY SERVICES benefit of backwardness and to make a significant step forward, bypassing the risk and taking advantage of development lever- age offered by the 4th industrial revolution. To this end, Cen- tral Europe should dynamically undergo further transformation KLUCZOWE INFORMACJE towards knowledge-based economy to become one of the global innovation centres in the decades to come. This vision ANDRZEJ can only come true by close cooperation of entrepreneurs, the DUDA state, scientists and experts, with the use of investment funds, HEAD OF STATE which form the ecosystem fostering the development of new BEATA technologies and products with global potential. WARSAW 38 million 312 679 km2 SZYDŁO CAPITAL POPULATION AREA HEAD OF GOVERNMENT Innovation ecosystem A knowledge-based economy cannot develop without cut- POLISH ZLOTY WWW.PAIH.GOV.PL ting-edge ventures, i.e. startups. Compared to the forty OFFICIAL LANGUAGE CURRENCY POLISH INVESTMENT & TRADE AGENCY most economically developed countries in the world, the maturity of Polish startup ecosystem is average. Accord- ing to the Deloitte study Diagnosis of startup ecosystem in Source: Eurostat, EIU, World Bank, Oxford Economics, BCG research 2 There is talent. There is capital. Start in Poland. INCREASE IN THE SHARE OF CORPORATE 15% R&D EXPENDITURE IN GDP Poland was rated 25th in the World Bank’s Doing Business 2016 ranking INCREASE IN THE INCOME FROM FOREIGN 15% LICENSES AND PATENTS INCREASE IN THE NUMBER 8% OF PCT APPLICATIONS st Singapore Poland, the potential for startup development in Poland is 1 considerable. It is estimated that by 2023 the added value generated by startups may amount to PLN 2.2 billion, and the number of created jobs may reach 50,000. nd New Zealand According to the European Innovation Scoreboard 2016 2 report, Poland saw an increase in innovativeness. Source: EIS report 2016 Polish economy has been constantly developing, with good rd Denmark economic conditions encouraging investors to finance inno- 3 vations in Poland. Sustainable growth of Polish GDP is without precedent in th Europe: during the 13 years of Poland’s membership in the Poland European Union, Polish economy was developing faster than 25 (45th in 2017, the economy of the EU as a whole. 79thin 2009) According to the latest forecasts of the World Bank, in 2017, as a result of investments and consumption, Polish econom- ic growth accelerated to 3.3% compared to 2.8% in 2016. Switzerland 26 3,3% France 27 2017 2,8% 2016 There is talent. There is capital. Start in Poland. 3 Success of Polish startups Polish startups Undoubtedly, the best evidence that Polish market is a good The number of global achievements of Polish startups is choice for investors are the startups created in Poland. growing. Their presence on the global map of innovative goods and services is becoming more visible every year. ~ 2700 the number of startups in Poland in 2016 2 years average age of a startup in Poland In 2016 the first Polish startup, became one of the “unicorns” 75% of startups 6.7% product operate on the B2B specialisation: A unicorn – a startup with market value > USD 1 billion. market, of which 50% Electronics/Robotics Poland may become a leader in Europe in the area of innovations. sell their goods or Potential success factors include: services to large enterprises 10.1% product specialisation: ~2,700 Big Data active startups in Poland Large academic High level of technical Innate IT Persistence background education gene in pursuing goals 13.8% of startups 25 of startups specialise in corporate with regular income software solutions The facts are undisputed: the potential of the Polish ICT doubled the value of their industry positions it among the top global actors in this sales in the last six months sector and as a clear leader in Europe. 12% increase in the number of startups in 22% of startups 1st in Europe Polish developers ranked 1st in Europe Poland 2015 v. 2016 obtained capital from (3rd in the world) according to HackerRank investment funds 26.7 year average age of a Polish developer (global average: 29.6) 10 accelerators under the Scale Up programme Source: Central Statistical Office of Poland, HackerRank, Stackoverflow 6% of startups finance with the funding their operations with amounting to strategic industry-based PLN 60 million Education and age investors OF POLES AGED 2534 HAS COMPLETED HIGHER EDUCATION 40% Source: Central Statistical Office of Poland 7% of startups use 47% of startups financing from accelerators export their products 18 18 5 11 UNIVERSITIES UNIVERSITIES OF UNIVERSITIES OF MEDICAL UNIVERSITIES IN POLAND TECHNOLOGY IN POLAND ECONOMICS IN POLAND IN POLAND Sources: Polish Startups 2016 report by Startup Poland, Polish Agency for Source: Ministry of Science and Higher Education Enterprise Development. Prepared by: PwC 4 There is talent. There is capital. Start in Poland. Investment venue VC funds, EU grants, business angels are the main sources of financial support to be sought by Polish startups in the nearest One half of startups created in Poland are financed solely from future. their own funds. VENTURE CAPITAL 79% of the capital of Polish startups are own funds; however, 59% a growing number of young innovative companies seek third EU GRANT party financing. Polish startups are opening to investments. 56% 35% BUSINESS ANGEL 79% 18% ACCELERATOR CROWDFUNDING OWN FUNDS 11% 10% NONE LOAN 24% 22% 17% OTHER EU GRANT VENTURE CAPITAL BUSINESS ANGEL 16% Source: Polish Startups 2016 report 7% 6% 6% 2% What is the cradle of Polish startups? ACCELERATOR STRATEGIC NONE LOAN CROWDFUNDING INDUSTRYBASED According to Polish Startups 2016, most young innovative com- INVESTOR panies are created in Warsaw, Krakow, the Tricity and Poznan. It is also the location of the largest startup communities. Their activity Source: Polish Startups 2016 report can be seen e.g. in many industry conferences, regular meetings (meetups), or seminars (organised e.g. by investment funds). The “born global” trend is not only a trigger for constant devel- opment and definition of one’s project at the international level, but it is also forced by the willingness to find a partner who would allow for the planned global expansion by investing their 3% Szczecin 9% Trójmiasto capital. 2% Białystok ¾ startups in Poland considers 9% Poznań obtaining third party capital 2% Łódź 27% Warszawa Source: Startup Poland 7% Wrocław 2% Lublin What are the sources of financing 2% Katowice sought by young innovative companies? 11% Kraków Polish startups understand that financial capital is one of the key development factors. Source: Polish Startups 2016 report There is talent. There is capital. Start in Poland. 5 Private Equity funds Venture Capital (VC) investments are vital for Private Equity funds. In 2015, they accounted for 61% of total transactions. Poland is the most important market for private equity (PE) funds investing in Central and Eastern Europe. The value of such investments grew from EUR 9.1 million in 2012 to EUR 19.6 million in 2015. 31% Source: KPMG report Private Equity Market in Poland 2016 UPOLAND’S SHARE IN CEE POPULATION, 2015 53% PFR Ventures POLAND’S SHARE IN CEE PE The largest platform in Central and Eastern Europe operating INVESTMENTS, 2015 as a fund of funds (FoF). PFR Ventures offers repayable financ- 35% ing through selected financial intermediaries, such as venture POLAND’S SHARE IN CEE GDP, 2015 capital funds or business angels. The company established under the Start in Poland programme Source: KPMG report Private Equity Market in Poland 2016 has an investment budget amounting to almost PLN 3 billion. The aim of its operations is to support innovative companies In 2016, the value of such investments in Poland grew by and enterprises at various stages of development, from the over 20% compared to 2015! pre-seed stage, through seed stage, early stage to growth and expansion stage. Private Equity funds 21% 5% Information technologies, Financial services media and communications 4% 18% Energy Industrial production seed PLN 2.8 billion budget of PFR Ventures 14% 3% Retail trade and Construction consumer goods and real property startup expansion 13% 2% Medicine and pharmacy Transport and freight logistics 9% 1% Corporate services Other services acceleration growth 9% Agriculture and food production 1% Other Source: PFR Ventures Źródło: raport KPMG „Rynek private equity w Polsce 2016” 6 There is talent. There is capital. Start in Poland. STARTER BIZNEST CVC KOFFI OPEN INNOVATION seed, incubation, startup seed, incubation, startup startup, growth, expansion growth, expansion incubation, startup, growth AUM AUM AUM AUM AUM EUR 186m EUR 61m EUR 100m EUR 77m EUR 100m MAX. FUND COMMITMENT* MAX. FUND COMMITMENT* MAX. FUND COMMITMENT* MAX. FUND COMMITMENT* MAX. FUND COMMITMENT* EUR 7-12m EUR 1.2-7m EUR 20-50m EUR 17-30m EUR 20m FoF MAX LAVERAGE* FoF MAX LAVERAGE* FoF MAX LAVERAGE* FoF MAX LAVERAGE* FoF MAX LAVERAGE* 80% 96% 50% 50% 60% SINGLE INV.