Amid Greek tech boom, a prominent seed-stage firm locks down €75 million

Marathon Venture Partners, a enterprise agency in Athens that prides itself on being “day one companions to Greek tech companions,” simply closed its latest fund with €75 million in capital commitments, in line with associate Panos Papadopoulos.

The automobile brings the agency’s complete property beneath administration to €175 million — a significant quantity for an eight-year-old, seed-stage investor in Greece and a mirrored image, too, of some sizable exits. Amongst them was the sale final yr of Marathon’s portfolio firm Augmenta to CNH, a maker of farm equipment and development gear in a cash deal that valued Augmenta at $110 million. Marathon additionally bought a few of its shares in Hack the Field, a cybersecurity upskilling and expertise evaluation platform, to the funding agency Carlyle in a secondary transaction.

We chatted with Papadopoulos forward of an in-person sit-down with him as a part of TechCrunch’s first StrictlyVC night in Athens on Thursday, Might 8, an evening that may even embody a deep dive with Greece’s prime minister, Kyriakos Mitsotakis. What we needed to know — and what the central questions will probably be Thursday evening — is: why Greece, and why now?

Greece has traditionally seen much less enterprise funding than different European nations. What, if something, has modified regionally that enabled you to boost a €75 million fund when international fundraising has develop into tougher?

For starters, Marathon I is a high percentile performer globally in [realized returns]; we constructed a portfolio that captured the present zeitgeist effectively earlier than, for instance, AI-assisted scientific analysis, robotics or protection grew to become the norm.

What’s your agency’s thesis and the way does this latest fund’s thesis differ given the prolonged timeline we’re seeing for exits globally?

We’re backing founders who do one thing exhausting in essential markets. It may be exhausting as a result of it requires distinctive data, like a analysis PhD, or excessive company, which means understanding of a regulated or neglected business like energy grid administration. And we’re going to proceed doubling down on our fast-growing neighborhood, which has been accumulating expertise and experience, together with ambition.

Greek startups have historically confronted challenges scaling past the home market. How are you evaluating an organization’s worldwide development potential on this setting the place capital effectivity issues greater than speedy growth?

I encourage to vary. Greek startups leverage native expertise to serve main international clients and markets from day one. Throughout our portfolio there’s just about no income coming from the home market. However they’re serving the very best a part of Fortune 500.

On the similar time, capital effectivity and staff grit are second nature to our neighborhood.

We’re seeing fewer IPOs globally and prolonged holding durations for venture-backed corporations. How did this have an effect on your conversations together with your restricted companions about anticipated timelines and returns?

We don’t want decacorns for our fund economics to work. We make investments early on, keep substantial fairness positions, and preserve our fund sizes small. These present for numerous alternatives for significant returns, together with secondaries and strategic M&A, effectively earlier than an IPO. We did secondaries again in 2021 when a lot of the market was promising infinite holding instances. In our tradition, money is king. It appears that evidently many others forgot it.

Many European VCs are emphasizing deep tech and AI. Is Marathon taking an identical method, or do you see totally different alternatives particular to the Greek ecosystem?

After all all of us are, however the definition of deep tech is stretched and means many various issues to totally different individuals. We aren’t specializing in any particular sector per se – as an alternative, we’re specializing in individuals altering their sectors. We had been maybe the primary generalist VC to put money into protection earlier than the Ukraine conflict.

Greek founders have traditionally acquired much less funding than counterparts in Berlin, Paris, or Stockholm. Are you seeing valuations for Greek startups that replicate this low cost, and does this create alternatives for higher returns?

In our expertise, this isn’t about geography or worth. We’re backing founders in non-consensus alternatives that the majority VCs would ignore. We transfer quick with conviction and we don’t ask who else is investing. These may sound like desk stakes; they nonetheless are usually not.

Given the difficult international exit setting, how are you advising your portfolio corporations about strategic alternate options like secondary gross sales or acqui-hires?

We work with our portfolio corporations towards default alive situations. Ranging from there, all choices are on the desk. We see founders really wish to run their corporations for the long run. We consider a secondary sale can truly assist in direction of that, and most frequently we’re supportive of such situations.

The EU has emphasised supporting startups via numerous funding mechanisms. How essential is non-dilutive capital from these sources to your portfolio corporations in comparison with 5 years in the past?

We welcome any such initiative. We advise, nonetheless, our portfolio founders to not waste time on non-market associated actions.

How has Greece’s improved macroeconomic state of affairs affected each your fundraising course of and the standard of startups you’re seeing?

It’s all the time good if you end up not making the press headlines, however what we do is much less related to native macro. On the subject of the expertise entrance, I might say really based mostly on naive empiricism that, if there’s any correlation, that’s inverse. Adversity is the mom of all invention.

Many American VCs have pulled again from European investments. Has this created extra alternatives for native funds like Marathon, or has it made syndicating offers tougher?

It’s positively a distinct market but additionally creates elevated alternative for European traders. I don’t suppose the flood of capital in 2021 really modified the chance for European corporations. We should all the time rely on ourselves and be aligned with founders for the long run.