Slovakia has talent, ideas and ambition, yet it is still waiting for its first technological unicorn. The third edition of the INVESTOR & STARTUP MEETUP event, organised by HAVEL & PARTNERS and ONE FAMILY OFFICE, took place in Bratislava’s Rivers Club. It brought together leaders from the Czech and Slovak startup scenes to demonstrate to startups the changes necessary for global success.
“Czech and Slovak startups have talent and ideas, but without global ambition and capital, they will not succeed in the global venture capital market,” said Jaroslav Baier, Venture Capital Partner at HAVEL & PARTNERS and Associated Partner at ONE FAMILY OFFICE. According to him, Slovakia should take inspiration from the Israeli model. “There, technology is a strategic pillar of the entire economy. Startups account for 20 percent of GDP, more than half of exports, and employ hundreds of thousands of people. Most importantly, no one there can settle for local success, because the country is even smaller than the Czech Republic. From day one, they aim for the US market.”
An example of how a Slovak startup can succeed on the global market is Photoneo, which was recently acquired by the US-based company Zebra Technologies. “Our seed investment was two million euros. The MVP from 2016 is our best-selling product to date,” said Ivana Žižková, the CFO, who led the comprehensive sales process.
Photoneo has created a unique technology – a robotic eye connected to artificial intelligence. “Imagine the scope of automation when your eyes are closed, you have to direct your hand, and then consider the possibilities when you open your eyes,” explained Žižková, outlining the principle behind their innovative solution.
Participants of the meetup agreed that Slovak startups need more than just money – they need “smart money”. “The combination of finance, intellect and built relationships can be as synergistically effective as finance alone,” emphasised Baier.
Michal Vanovčan from Seed Starter of Slovenská Sporiteľna mentioned another important aspect: “We are looking for companies that have the potential to grow and help keep talented people in Slovakia. But most of the projects are still at too early a stage. That’s why we support events like the INVESTOR & STARTUP MEETUP – they bring people, capital and ideas together, creating a stronger innovation ecosystem.” Seed Starter is a venture capital fund of Slovenská Sporiteľna that supports startups in their early stages. Among other things, it enables startups to run pilot projects with the bank, allowing them to test their solutions in a real-world environment, receive feedback, and accelerate their growth.
Jaroslav Lupták from Neulogy Ventures has a different perspective: “We want to bring higher added value to the founders, which is why we must specialise as a fund. The Slovak market is too small for that. Innovation knows no borders and even the best Slovak founders often do business in the US, London, and other places abroad.”
At the meetup, Zuzana Doležalová from the Vienna Business Agency presented an interesting alternative for Slovak startups. “We want Vienna to be much closer to Bratislava. Every year we receive forty million euros directly from the City of Vienna, which we invest in various projects. This is an opportunity for Slovak startup founders too,” said Z. Doležalová. “If you want to expand to Vienna, we will connect you with investors, tell you where the networking events are,” she said, explaining the opportunities for Slovak founders.
The added value of venture capital lies in the speed with which it can create huge added value – a world champion in a certain field – from nothing in a very short time. The highest valuations and most breakthrough companies are created in the US, offering venture capitalists unrivalled access to capital, talent and market potential. Europe, on the other hand, lags far behind, which is alarming.
“That’s why we are primarily directing our investments to the US. Together with our partners at ONE FAMILY OFFICE, we now have access to US global venture capital funds on a restricted access basis, which are otherwise not available. This is essentially the best-performing asset class in the world,” explained Baier.
What are the main obstacles to developing the Slovak startup ecosystem from the point of view of the meetup participants? “Slovakia is becoming very unattractive for founders in terms of the tax and regulatory environment,” pointed out Lupták, partner at Neulogy Ventures.
From her position as a successful CFO, Ivana Žižková added: “I would welcome a functioning ESOP structure. Not things like a transaction tax. The legal system in our country is so complicated that it’s impossible for foreigners to understand.”
Despite the challenges, there is also reason for optimism in the Slovak market. “We are entering an era of first exits. The investment cycle is coming to an end and successful companies will create more founders and investors,” Lupták noted.
Juraj Jusko from SLOVAK INVESTMENT HOLDING (SIH) stressed the importance of the state investment fund in implementing financial instruments from EU funds. SIH primarily supports Slovak businesses through financial intermediaries, but also has an internal capacity for direct investments.
Drawing on his experience with startups, Štefan Petergáč, a technology veteran and founder of DATALAN, offered advice to investors: “You need startup owners who give 300 percent. It’s a huge amount of work; there has to be extreme commitment. That’s very important. And then there have to be people who understand each other, because if they don’t, no business will be successful.”
“Let’s not be afraid of new adventures, whether it’s on the waves of the Danube, in venture capital, or anywhere else. Slovakia has all the prerequisites to see its first unicorn. It just needs the right combination of talent, capital and the courage to think globally from day one,” concluded Jaroslav Baier.
Jaroslav Baier, HAVEL & PARTNERS and ONE FAMILY OFFICE
From left: Jaroslav Lupták, partner Neulogy Ventures, Investment manager SIH, Michal Vanovčan, SLSP Seedstarter
From left: Juraj Porubský, editor-in-chief of MIT Sloan Management Review CZ a SK a Štefan Petergáč, co-owner SYNTECA
Ivana Žižková, CFO Brightpick
