VC investments in Poland 2007–2023 (mln EUR)*the average annual exchange rates from the National Bank of Poland were used for currency conversions.Source: own elaboration based on Invest Europe for 2007–2018, PFR Ventures for 2019–2023.
Figure 2.
Comparison of the origin of investors in VC markets in the US, Israel, Poland, Czech Republic, and Hungary between 2010 and 2022Source: own elaboration based on data from Dealroom (2024)
Figure 3.
Comparison of VC investment per capita in the USA, Israel, and Poland between 2007 and 2023 (USD)Source: own elaboration based on data for VC investments for USA & Israel form Dealroom, for Poland form PFR Ventures & Invest Europe; and population data from World Bank
Comparison of major events in the evolutionary phases of the USA, Israel, and Poland VC industries
Phase
USA
ISRAEL
POLAND
Background Conditions
1930–1945
World War Two and & technological race (Cold War)
Public R&D capital going to the military and high technology sector
No VC organisations present
1970–1989
Six-Day War and France issuing embargo on Israel
Public R&D capital going to the military sector and high technology US corporations entering Israel
BIRD program promoting R&D links with the USA
Appearance of first formal VC companies
1989–2004
Collapse of the communist system and subsequent systemic transformation and privatisation of enterprises
Need for influx of capital in high technology sector to to reduce the technology gap.
Very fast appearance of formal VC/PE found operating in an aid capacity as well as privately.
Pre-Emergence
1945–1957
Creation of professionally managed VC organisations linked to wealthy families
First formal VC organisation (ARD)
continued large investments in R&D
Initiatives made by universities to connect companies with talented students
1989–1992
Continuation of technological revolution
Strong immigration of qualified personnel
More VC organisations enter Israel
Government support programs for the VC market: Technology Incubator, Magnet, Inbal
2004–2017
Accession of Poland to the European Union
Appearance of capital from EU structural funds.
Government support programs for the VC market: PARP, KFK, NCBR
Emergence
1958–1972
First LP VC organisation (DGA)
Government SBIC program
Rise of integrated circuits computer technology
Establishment of NASDAQ and listing of Intel
Continued large investments in R&D
1993–2000
Government support programme Yozma aimed at the creation of a competitive VC industry through public-private partnerships.
Israeli startups can IPO on NASDAQ
Rise of software and communication technologies
Substantial increase in the number of active VC funds in the country
2017-
Launch of Government organisation PFR Ventures to support the development of the local VC market and innovation ecosystem
Substantial increase in the number of active VC funds in the country
Crisis
1972–1980
ERISA regulations reducing inflows in the VC sector due to stringent regulations on pension fund managers
Very little VC capital raised
2001–2003
Collapse of stock market bubble
Significant reduction in capital raised
World capital market crisis and high technology crisis
Reductions in R&D grants support
Liquidity problems of VC funds due to the lack of capital
Overshooting of VC investments in the Emergence phase
Consolidation
1980-
Relaxation of ERISA regulations
Pension funds and other institutions have become dominant investors in VC.
Successful IPOs of technological companies (e.g., Apple)
Growth of VC clusters like Silicon Valley
Reorientation of the R&D sector from military to civilian applications.
2004-
Increase in capital raised by VC funds
Increase in IPOs and other forms of startup exits
Israeli VC managers successful abroad
Comparison of PFR Ventures (Poland) and Yozma (Israel) programs
PFR Ventures (Poland) First edition POIR*
YOZMA (Israel)
Objective
Support the development of the local Venture Capital and Private Equity market and the innovation ecosystem.
Creation of a competitive domestic VC industry.
Investment Structure
The organisation operates in a fund of funds (FOF) format. Each sub-fund has a specific investment profile. PFR Ventures' maximum contribution to the capitalisation of individual funds ranges from 60% to 80%, depending on the program profile.
The programme, promoted by the OCS, was structured as a fund of funds, making equity investments in hybrid funds without intervening in their operations. The government contributed USD 8 million to each of the ten funds, making up 40% of the total capital raised.
Investment capital
PFR Ventures invested PLN 1.1 billion in VC funds between 2017 and 2023. Meanwhile, the total investment capital, together with private funds, amounted to PLN 1.6 billion (~ USD 400 million).
Total investment capital of USD 250 million (including government funding of USD 100 million)
Investment Focus
Each sub-fund has a specific Investment Focus:
PFR Starter FIZ - investing in companies at the earliest stage of development (incubation, early-stage).
PFR Biznest FIZ - investing in companies at the early stage of development (seed, pre-seed) together with private investors with appropriate capital and experience (Business Angels).
PFR Open Innovation FIZ - investing in technology projects with an R&D component that creates technologies based on the open innovation formula.
PFR KOFFI FIZ - investing in companies at a later stage of development (post-seed rounds).
PFR NCBR CVC FIZ AN - investments focused on a model of generating new ideas, researching, and creating new ventures within existing corporations.
Early-stage investments in high tech startup companies
Form of VC organisations
Depending on the program, VC organisations operate in a standard VC fund, CVC, or co-investment model.
Independent Limited Partnership VC Companies
Requirements for Fund managers
Each candidate fund had to meet the experience and competence requirements of the management team. In addition, individual sub-funds had management team contribution requirements that ranged from 1% to 20% of the fund's total capitalisation.
Each VC fund had to have a competent management team, a reputable foreign VC firm, and a domestic financial institution, which helped foster collective learning and leverage international expertise.
Incentives for investors
Risk diversification through joint investment in a public-private model. In addition, in most programmes there was a follow-on investment option for successful ventures.
Within a 5-year window, investors could buy the government's share at cost, providing strong incentives for professional VC teams.
Impact
Over the period 2017–2023, PFR Ventures invested in more than 380 companies through partnerships with 32 VC funds with funds from POIR. As the investment horizon depending on the programme is 5–12 years most of the investments are still in the development stage, only in the following years with more exits will it be possible to assess success better.
The Yozma fund created a critical mass of VC investment, with most Yozma funds ranking among Israel's top 20 VCs. It spurred high private VC performance, led to follow-up funds and strong capital growth, and served as a model for many other VC companies in Israel.
