Metavallon VC, a Greek seed and pre-seed investment firm with €32 million under management, announced today that it will join the Draper Venture Network’s DVN Beta program, focused on seed-stage funds.
Tim Draper, the founder of the venture network, said in an email “[t]here is a lot of great entrepreneurial and engineering talent in Greece, and we look forward to being able to support it with our global network and ecosystem.” Alexandra Choli, a founding partner of Metavallon VC, called the new partnership a “significant collaboration” and said she plans to make investments alongside other Draper Network funds.
According to a statement provided by the Draper Venture Network, Metavallon VC’s portfolio companies “become prime deal flow” for larger, later-stage funds in the network. The network’s funds are encouraged to invest in future funding rounds of each other’s portfolio companies. And the network’s corporate partners are able to offer a “soft landing” by way of acquisitions.
In exchange for access and services, the Draper Venture Network will receive some carried interest and receive dues from its member funds.
Insights Into The Greek Startup Ecosystem
Choli shared a number of interesting facts about Greece’s startup ecosystem with Crunchbase News.
Choli said that Greece’s startup ecosystem has expanded significantly in the past three years. She says that throughout the country, over thirty startup incubation initiatives have sprung up. Over sixty startups received funding, over €50 million total. And during this time there have been ten venture-backed exits in the €5-€50 million range, according to Choli. Keep in mind that this is in a country with a fairly new startup ecosystem and a population just a bit larger than New Jersey’s.
Choli said that there are currently four and soon to be six seed-stage investment firms in Greece. There are three active growth-stage funds as well. All of these funds have the European Investment Fund as their anchor LP. The EIF is also a limited partner in Metavallon VC.
She also highlighted an “excellent” pipeline of talent at Greek universities, which she says are “becoming more product and commercially focused.” 29 percent of Greek graduates hold degrees in STEM fields, and 16 percent studied business.
This being said, there are some significant headwinds for Greek entrepreneurs. Only 36 percent of startups have received external capital, according to Choli. And a majority – 58 percent – of the entities that invest in Greek startups are from outside the country. Choli told Crunchbase News that there is a “critical funding gap in the pre-seed and seed stages.”
Choli cited other challenging circumstances. She sees a disconnect from the international market experienced by both Greek investors and entrepreneurs. The small size of the Greek market forces entrepreneurs to validate their business models internationally, which due to the “disconnect” she cited can be difficult. In addition, there are cultural barriers, which places emphasis on employment security and promotes a fear of failure.
From Social Impact Organization To Venture Investor
Years before Metavallon became venture investors, they were a social impact organization. According to a historical narrative posted to its website, Metavallon.org was started in 2011—during the thick of the Greek Debt Crisis—to build a group that supported and promoted technology entrepreneurship in Greece, in part to stem the tide of young educated Greeks leaving the country. Choli said that human capital is Greece’s major export, worth €13 billion per year.
In 2014, Metavallon.org launched Greece’s first accelerator program, and in the same year it partnered with the EU-led Future Internet Business program to lead that program’s efforts in Greece. Through its own investment vehicles, and through partners, Metavallon.org invested in seven pre-seed startups.
In 2017, Metavalon.org’s partners launched Metavallon VC, which raised part of its €32 million from the EU-funded European Investment Fund. Its fund has so far focused mostly on seed-stage deals with companies working in a very wide range of fields, including microelectronics, aviation, AI, IoT, cleantech, and blockchain. At seed stage, the fund invests up to €400,000 per company in exchange for around 20 percent of the company’s stock
Metavalon VC is launching its first pre-seed accelerator program, which will invest up to €200,000 in each startup, and up to €2.5 million in follow-on funding per company.
Disclosure: during the summer of 2015, the reporter was an unpaid intern at a now-defunct investment group in the Draper Venture Network.
Illustration: Li-Anne Dias