Leading Israeli fund Management Company Giza Venture Capital has partnered with the majority American owned Ukrainian investment bank, Empire State Capital Partners (ESCP) to initiate under a JV basis, The Ukraine Venture Capital Fund. The new fund follows the ongoing success of Giza Polish Ventures which was established in 2012 and will further cement Giza's pre-eminent position as a major force in the VC segment in Eastern Europe.
Working with Ukrainian partners, ESCP and Giza will raise an initial $50mn from seed investors to take advantage of the cornucopia of VC opportunities in the Ukrainian IT, internet and technology space.
The fund will invest in early stage Ukrainian companies developing technology and systems that have a global market leveraging the internet as the main sales and marketing channel. All target companies will have to demonstrate substantial growth potential in their respective fields. The investment sweet spot is in the $0.5mn - $1mn range with an expected 10X return over a 5 year term.
The minimum investor commitment is $5mn which will give exposure to a diversified portfolio of more than 50 companies. The Ukrainian IT sector is the most dynamic sector of the Ukrainian economy. Between 2003 and 2015 it grew from a mere $110mn to $2bn in size. Taking an average of analyst forecasts it will grow by more than 600% by 2020 and to a size of $50bn by 2025 representing enormous compound growth rates. It is this huge growth that ESCP and Giza have joined forces to offer investors a vehicle to profit from.
Success stories of Ukrainian IT companies:
- In 2015 Snapchat has acquired Looksery for ~ $ 150 mn.;
- In 2012 by Google bought Viewdle for ~ $ 45 mn.;
- In 2013 GlobalLogic was acquired by Apax Partners for $ 420 mn. - the biggest liquidity event for the Ukrainian IT sector to date.
Empire State Capital Partners – is a full service investment company with Western roots headquartered in Ukraine with the main focus on equity and credit capital markets operations as well as advisory.
Since 1992, Giza Venture Capital has formed five venture capital funds and invested approximately $600mn. It has achieved 40 successful exits. The first exit from the 5th Giza's fund resulted in 14x return on invested capital. Giza's strong performance places the group in global top 2% among 130 VC funds reviewed by CalPERS (CalPERS Private Equity Program report).
The partners have formed the strong Management Team with extensive international experience in IT, venture capital and investments enable to source transactions at attractive rates of return.
Founder & Managing Partner
EMPIRE STATE CAPITAL PARTNERS
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