You only have a minute? Here are 3 takeaways from this article:
• Czech impact VC Tilia has launched its second €32 million fund with the aim of supporting ESG-focused CEE companies.
• The second fund is financed by the European Investment Fund (EIF) through the InvestEU program, as well as by the Česká spořitelna bank.
• Czech business leaders who backed the fund include RSJ’s Libor Winkler, LINET’s Zbyněk Frolik, Credo’s Ondrej BartošJan Bárta from Pale Fire Capital, Tomáš Vala from Siko and Václav Kurel from Benefit Plus, among others.
Founded in 2018, inaugural fund Tilia Impact Ventures has already made investments that tackled issues ranging from tackling food waste, such as Hungarian startup Munch, Czech B2B waste marketplace Cyrkl or Polish micro-school platform The Village.
The team behind Tilia II brings together seasoned experts from diverse backgrounds, including venture capital, investment funds, foundations, social entrepreneurship and technology entrepreneurship.
“Systemic change is the key concept for us. We invest in technologies and business models that can transform entire industries and systems, rather than only bring temporary benefits. We market our verticals as PEOPLE & PLANET. The planet part is climate, but the people part is broader than just EdTech, and we also look at healthcare and social inclusion,” Andrew Gray, general partner at Tilia, told The Recursive.
Focus areas encompass climate and sustainability, where they work on decarbonizing energy networks, advancing electric transportation, sustainable food production, nature conservation, industrial sustainability and Pioneering innovative solutions for carbon reduction and circularity.
Additionally, Tilia will seek to promote education and training through EdTech initiatives, addressing employability challenges and bridging skills gaps. Another area of focus is social inclusion and civic empowerment, as well as creating employment opportunities for marginalized communities while advancing transparency and civic engagement.
“Our region has long been known for its technical talent. But more recently, we’re seeing a wave of entrepreneurs working to solve some of the most pressing environmental and social challenges of our time. We are pleased to be able to offer patient capital, guidance and a network to propel these founders on their journey toward global change,” General Partner Petr Vitek said in a statement.
50 percent for the Czech Republic, 50 percent for the entire CEE region
According to Gray, 50 percent of the fund will be invested in the Czech Republic, while the other half will be focused on the broader CEE region, including the Balkans.
“The priority countries are Slovakia, Poland, Hungary, Romania, Austria, but also the Balkans and the Baltic countries, opportunistically. Bulgaria, for example, seems to be a country that we are building great relationships with and seeing great deals coming from,” Gray told The Recursive.
While the initial fund served as a test to determine the viability of impact investments capable of generating both financial benefits and meaningful societal change, Tilia II will now have all the resources necessary to support exciting new solutions from the region.
“The first fund was primarily focused on local, but we only started to expand when the fund ended. The fund’s initial investments were more like concessional capital – mezzanine loans on concessional terms that were not intended to generate large returns,” Gray points out.
Regarding Tilia’s expectations, Gray notes that aside from the fact that over the past 18 months there has been a slowdown in the startup funding landscape, there is still a silver lining for future investments.
“I am somewhat grateful that we have moved away from the unbearable chaos of 2021 thanks to the market reset. This means we can take more time to get to know the founders and bring valuations back to more sustainable levels. However, climate technology in particular is exploding in Europe. There is a lot of capital, public support and, most importantly, talent coming into this field. Gray concludes.
