When Orbit Capital was born in 2019, the very notion of Venture Debt practically does not exist in central and eastern European countries. The scaleups of the region, even in strong growth, remain too young or too atypical to meet the criteria of banks. As for the venture capital funds, they concentrate their investments on majority tickets or on Western hubs. Between the two, a void that Radovan Nesrsta, founder of Orbit Capital, will methodically fill.
“” Our company has introduced the Venture Debt, an unprecedented mode of financing in our region, which is aimed at both young and rapidly growing businesses, as well as to companies already established but also excluded from traditional banking credit He explains. The model is to lend between 3 and 10 million euros to tech startups close to profitability, without forcing them to sell more capital.
“” This funding is up to four times cheaper for them and their investors than if they were still diluting their shares “Specifies Nesrsta. For investors, the first fund, launched in 2019, kept its promises: around fifteen funded companies, a target return of 15 %, and a risk contained thanks to a selection of companies already generating income.
The first Venture Debt infrastructure in the east
With the first fence of 70 million euros for its second Growth Debt II fundOrbit Capital takes a new CAP. The final objective is set at 100 million euros. The institutional ecosystem follows: the European Investment Fund (EIF)the bank Česká spořitelna and the pension fund Renta (Partners group) are all committed. Individuals can also access the fund via the asset manager Advisor.
In the portfolios of the previous fund, there are several regional nuggets: Rohlík (Czech online supermarket), Twisto (Fintech application), Threadmark (cybersecurity), Cloud (Call centers increased by AI) and Boataround (Slovak boats’ Slovak Platform).
This strategy attracts institutions in search of impact. For Marjut FalkstedtDirector General of EIF, “this investment will provide essential funding for innovative SMEs and companies, while strengthening the economic competitiveness of the region”.
A tool for a second economic transformation
Orbit positioning is not only of finance. It is part of a wider dynamic of sovereignty and industrial upmarket in the region. Jan Segerdirector of financing at česká spořitelna, the formula as follows: “We contribute to the second economic transformation of the country, by supporting companies with high potential which do not yet fulfill the conventional conditions of credit but carry innovative models”.
With this new fund, Orbit Capital wishes to support between 15 and 20 new companies in the expansion phase. The emphasis is placed on companies that have already validated their product, established a customer base, and displaying recurring income. The goal: to help them finance their growth, their internationalization or their technological investments, without systematically going through a dilutive B series.
“During the first five years, we built a Venture Debt infrastructure from nothing. Today, we have the confidence of the founders and investors to accelerate, ”says Lukáš Macko.
In addition to the debt vehicle, Orbit also manages the fund Growth Equity Iwhose portfolio counts two unicorns European.
