You spin CEE right round baby, right round

Good morning there,

While tech hubs in western Europe have recently been oiling the tech transfer wheels in an attempt to get more science into startup land, in swathes of central and eastern Europe those wheels have been left rusty for a while.

That was until last month, when Poland saw the launch of the Warsaw University of Technology Investment Factory — the country’s first-ever VC founded and supported by a technical university. It’s planning a first close of $5m to back academic deeptech founders across Poland with small tickets (it’ll co-invest with the big guns, who can cough up weightier cheques), and, crucially, provide them with technical expertise from the university. My colleagues Zosia Wanat and Tom Nugent dig into that below.

Elsewhere today, Swiss VC Founderful has closed $85m of a $120m fund to back the country’s “overlooked” startups, Berlin’s Factory is set to close its main location and why Davos is dead.

— Kai Nicol-Schwarz, reporter

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You spin CEE right round baby, right round

It’s not that common to launch a VC in an old aula of the Warsaw engineering school, in front of the deputy minister of education — yet, that’s how Warsaw University of Technology Investment Factory (WUT IF) came into being last month. 

The new VC is on a mission to back academic spinouts in Poland with small, targeted tickets (it aims to co-invest with funds with bigger pockets to pad out rounds). It’ll also provide companies with technical expertise from WUT and facilitate access to research teams from the school. The VC has started fundraising and while it hasn’t closed any money yet, it hopes to back its first venture in the next 12 months.

“Many VCs that we talked to have expressed interest in such cooperation,” says Jakub Wojciechowski, one of WUT IF's GPs. “They have the capital and high competencies in investment projects, but they lack the technical part. If we could combine it, it’d be a natural synergy."

“We could be technological support for VCs,” adds Robert Sitnik, another of its GPs. 

WUT IF is a green tick for tech transfer efforts in central and eastern Europe (CEE), which has been slow to the party when it comes to turning deep, scientific research into commercially-viable ventures. 

Other areas of Europe have been hunkering down and getting to work on bettering tech transfer for years. A recent review of how to improve spinout practices in the UK was well received by industry folk, and there is money flowing into commercialisation efforts from investment vehicles like Northern Gritstone in the north of England and Cambridge Innovation Capital in the south, which has been going since 2013 and backs spinouts from the University of Cambridge. There are also spinout-focused VC funds in Greece and Germany that have been active for several years.

The talent is there in countries like Poland for its ecosystem to enjoy similar success. It is flooded with engineers — even if bottlenecks in the country mean most of them found companies outside their home market — and has recently seen an uptick in the number of patents being filed, an indicator of nascent scientific ideas bubbling up to the surface. 

According to data from the European Patent Office, between 2021 and 2022 patent applications in Poland were up 17.8%, from 522 to 615. That trend is also seen elsewhere in the CEE region. There was a 9% increase in the number of patent applications in the Czech Republic over the same time period, and a 6% rise in Slovenia. 

Initiatives like WUT IF are further proof that things are (slowly) moving in the old-fashioned tech transfer scene in Poland, and in the wider region. Last year, the government in the neighbouring Czech Republic created a €55m fund of funds — €15m of which will go towards backing a VC investing in university spinouts in the field of AI.

That said, filling investors’ pockets with money to back spinouts is just one part of the puzzle. There’s been plenty of capital sloshing about Europe in the last few years but, when it comes to deeptech, science-focused investors tell Sifted that there’s a dearth of expertise that truly understands the science and how to make money from it. Early-stage capital for deeptech also doesn’t work unless there’s growth capital down the line (something Europe also lacks).

WUT IF can fill a small hole in the ecosystem, but it’ll need others in CEE to follow. If that happens — and if university bureaucracy also doesn't get it its way — it has an opportunity to be one of many small bridges between academia and business that the region needs.

What do you think? What else does the region need to make tech transfer work? Are there other signs that things are (or aren’t) moving? What about Europe more broadly? Get in touch.

— Zosia Wanat, senior CEE correspondent & Tom Nugent, newsletter editor

🇨🇭 Swiss VC Founderful closes $85m of a new $120m fund focused on the "overlooked" Swiss ecosystem. The Zurich-based firm, which was previously called Wingman Ventures, will back 40 pre-seed startups across Switzerland (eight to 10 deals per year) with cheques of between $1m-1.5m. It hopes to reach the final close of the fund by July, and will reserve 50% for follow-on investments. 

• The idea of focusing exclusively on Switzerland came after cofounder Alex Stöckl sat on the jury of a spinout competition held by university ETH Zurich, having previously spent time working and investing in Berlin. “I realised [Switzerland and Berlin’s ecosystems] were two different worlds — it literally could be different planets,” he tells Sifted. 
• His fellow judges in Switzerland were “a bunch of old dudes grumpily telling founders off for being way too ambitious, [saying] they need to plan more conservatively,” he says — an attitude he felt was incompatible with the “groundbreaking” ideas emerging from academic researchers in the country. 

🏢 Berlin’s Factory is set to close its main location. Since 2018, the startup campus has been home to 4,500 members and 150 startups — but in an email sent to members on Monday, Factory announced that its main location at Görlitzer Park, which takes up 150k sq ft, will be closing its doors after the lease wasn’t renewed. 

• It’s hoping that members will transfer to its other location in Berlin Mitte, which is currently undergoing “major renovations”, Zino Soyka, Factory Berlin's CEO, tells Sifted. The Berlin Mitte site reopened to members earlier this month after a year of closure, and can currently host 200 members; once renovations are done, it’ll be able to hold 500. 
• Factory tells Sifted that no layoffs were made or are planned in light of the move. 

🛫 UK neobank Revolut has announced it is launching phone plans for UK customers travelling overseas. It'll start offering eSIMs — virtual, rather the physical, SIM cards — this week, and the plans will start rolling out in the coming days. 

• Tara Massoudi, general manager of premium products at Revolut, told CNBC that the move is part of its plan to be “the financial superapp”. 
• It also takes advantage of rising data roaming costs rising for Brits abroad, with several mobile carriers reintroducing roaming charges since the UK left the EU.
• The fintech has partnered with UK mobile network operator 1Global to launch its eSIM — a company founded by Hakan Koç, who also founded eSIM company Betterroaming last year.

💀 Davos is dead. We must reinvent it.

⏰ How to time block.

📈 Is Arm really an AI stock? (FT)

🔥 On February 27, we’ll be showcasing five of the leading European early-stage fintech startups currently fundraising at our Pitch event, exclusively for Pro subscribers. RSVP.

💸 On March 13, Amy Lewin will bring together a panel of experts from Octopus Ventures, FaceIt, Latham & Watkins and Bloom to discuss what's in store for M&A activity and how startups can prepare. RSVP.

Amsterdam-based Finom, which is a digital banking platform for SMEs and entrepreneurs, raised €50m in Series B funding. General Catalyst and Northzone co-led the round.

Helsinki-based Bob W, a hospitality platform offering short-stay apartments for travellers and a management platform for property owners, raised €40m in Series B funding. Evli Growth Partners led the round and was joined by investors including Taavet+Sten, Flashpoint and Supercell cofounder Mikko Kodisoja.

Bergamo, Italy-based Daze, which manufactures charging systems for electric vehicles, raised €15m in Series A funding. CDP Venture Capital led the round and was joined by investors including EIC Fund, SIMEST, Founders Future, Prana Ventures, 035 Investimenti.

Madrid-based LUDA Partners, a digital pharmacy network connecting pharmacists across Spain, raised €12m in funding from Moira Capital Partners.

Copenhagen-based Aegir Insights, a data-driven research and analytics company for offshore wind decisions, raised €8.5m in a Series A funding. Seaya Andromeda led the round and was joined by investors including Climentum Capital.

Paris-based Groover, a music platform for independent artists, raised €7.5m in Series A funding from investors including OneRagtime, Trind, Techmind, MozzaAngels, Partech, Bpifrance, Verve Ventures and Frenchfounders.

Berlin-based Pacifico Biolabs, which creates fermentation-based alternatives to meat and fish products, raised $3.3m in pre-seed funding. Simon Capital and FoodLabs led the round and were joined by Exceptional Ventures and Sprout & About Ventures.

If you’d like to submit a deal, get in touch. 

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