Greek Tech Investment: Seed-Stage Firm Raises €75M

Marathon Venture Capital Closes €75 Million Fund

Marathon Venture Capital, a venture firm based in Athens, has successfully finalized its latest fund with €75 million in capital commitments. This information was shared by partner Panos Papadopoulos.

This new vehicle elevates the firm’s total assets under management to €175 million. This represents a significant achievement for an 8-year-old, seed-stage investor operating within Greece.

Recent Exits and Market Position

Marathon’s success is also underscored by several notable exits. Notably, the sale of portfolio company Augmenta to CNH, a leading manufacturer of farm machinery and construction equipment, was completed in a cash transaction valuing Augmenta at $110 million.

Furthermore, Marathon realized value through a secondary transaction, selling a portion of its shares in Hack the Box, a cybersecurity platform focused on skills development and talent assessment, to Carlyle, a global investment firm.

Insights from Panos Papadopoulos

These insights were gathered during a conversation with Papadopoulos prior to TechCrunch’s StrictlyVC evening in Athens on May 8th. The event also featured a discussion with Greece’s prime minister, Kyriakos Mitsotakis.

The core question explored – and the focus of Thursday’s event – centers on the current appeal of Greece as an investment destination.

Addressing the Investment Landscape

Historically, Greece has attracted less venture capital compared to other European nations. What factors have shifted locally to facilitate the raising of a €75 million fund amidst a challenging global fundraising climate?

Marathon I has demonstrated top-tier performance globally in terms of realized returns. The firm proactively built a portfolio that anticipated current trends, including AI-assisted scientific research, robotics, and defense technologies.

Fund Thesis and Exit Timelines

What is the core investment thesis guiding your firm, and how does the strategy of this newest fund adapt to the extended exit timelines observed in the current global market?

We prioritize backing founders tackling complex challenges within significant markets. This often involves specialized knowledge, such as a research doctorate, or deep understanding of regulated or underserved industries like power grid management. We remain committed to expanding our rapidly growing community, fostering experience, expertise, and ambition.

International Growth and Capital Efficiency

Greek startups have often encountered difficulties scaling beyond the domestic market. How do you assess a company’s potential for international expansion, particularly in an environment where capital efficiency is paramount?

We believe Greek startups effectively utilize local talent to serve prominent global customers and markets from their inception. Revenue from the domestic market constitutes a negligible portion of our portfolio companies’ overall income. They primarily serve major Fortune 500 corporations.

Moreover, capital efficiency and the resilience of our teams are inherent strengths within our community.

Navigating the Exit Environment

With fewer IPOs and longer holding periods for venture-backed companies, how did these factors influence discussions with your limited partners regarding anticipated timelines and returns?

Our fund economics do not rely on the emergence of decacorns. We invest early, maintain substantial equity stakes, and manage fund sizes conservatively. This approach allows for diverse opportunities for significant returns, including secondary sales and strategic mergers & acquisitions, even before an IPO. We actively pursued secondary sales as early as 2021.

In our view, maintaining strong cash reserves is crucial, a principle that appears to have been overlooked by some.

Deep Tech, AI, and the Greek Ecosystem

Many European VCs are focusing on deep tech and AI. Is Marathon adopting a similar strategy, or do you identify unique opportunities within the Greek ecosystem?

While the focus on deep tech is widespread, its definition varies considerably. We are concentrating on supporting individuals who are fundamentally transforming their respective sectors. We were among the first generalist VCs to invest in the defense sector prior to the conflict in Ukraine.

Valuations and Investment Opportunities

Greek founders have historically received less funding compared to their counterparts in Berlin, Paris, or Stockholm. Are valuations for Greek startups reflecting this disparity, and does this present opportunities for improved returns?

Our experience suggests this is not primarily a matter of geography or pricing. We focus on backing founders pursuing unconventional opportunities that are often overlooked by other VCs. We act decisively and with conviction, without seeking co-investors.

Strategic Alternatives and Portfolio Support

Given the challenging global exit landscape, what guidance are you providing to your portfolio companies regarding strategic options such as secondary sales or acqui-hires?

We collaborate with our portfolio companies to establish “default alive” scenarios. From this foundation, we explore all available options. Founders generally express a desire to build their companies for the long term, and we often support secondary sales as a means to achieve this.

The Role of EU Funding

The EU is actively promoting startup support through various funding initiatives. How important is non-dilutive capital from these sources to your portfolio companies compared to five years ago?

We welcome these initiatives. However, we advise our portfolio founders to prioritize activities directly related to market engagement.

Macroeconomic Factors and Talent Acquisition

How has Greece’s improved macroeconomic situation impacted both your fundraising efforts and the caliber of startups you are evaluating?

While stability is beneficial, our work is less directly influenced by local macroeconomic conditions. Regarding talent, we observe an inverse correlation – adversity often fosters innovation.

American VC Activity and Local Opportunities

With many American VCs reducing their investments in Europe, has this created more opportunities for local funds like Marathon, or has it complicated deal syndication?

The market dynamics have shifted, creating increased opportunities for European investors. The surge of capital in 2021 did not fundamentally alter the landscape for European companies. We must remain self-reliant and aligned with founders for the long term.