Flashpoint VC targets $150m for second direct secondaries fund

Flashpoint RI Secondary Fund II will focus on companies in Europe and Israel with annual recurring revenue of $30m to $150m, says general partner Michael Szalontay.

Tech-focused venture capital manager Flashpoint VC has has partnered with investment banker Roman Ivaniuk, founder of Ukraine-based BrightOne Capital, on a new direct secondaries fund targeting $150 million.

Flashpoint, based in London, backs Europe- and Israel-originated companies that are seeking to grow in the US and Western Europe. It currently manages five funds, including three VC funds, a growth debt fund and a direct secondaries fund.

Its first secondaries fund, Flashpoint Secondary Fund I, launched in 2020 and closed on $48 million. It was anchored by the Scheinberg family office. Including GP commitment and a co-invest pocket, Fund I has a total investment size of $114 million, general partner Michael Szalontay told affiliate title Secondaries Investor.

Fund I has six investments in its portfolio: operational data solution K2View, e-commerce-focused technology platform Printify, global language learning marketplace Preply, corporate spend solution Mesh Payments, beauty-focused marketplace Booksy and property technology platform Landtech, according to a statement.

Flashpoint began investing in direct secondaries via its first flagship VC vehicles, Szalontay said. The firm tracks more than 15,000 companies via its database, which helps the firm monitor the development of companies and source dealflow across its funds. The dedicated secondaries vehicle targets companies that are series C or beyond while its VC vehicles target Series A investments, Szalontay added.

Ivaniuk has more than 12 years’ experience in investment banking, the statement said. He was a founder and a former managing partner of pan-European venture fund GR Capital before setting up BrightOne. His investments include insurance technology platform WeFox, and food delivery websites Glovo and Deliveroo, the statement said.

Flashpoint has both a strong VC track record and a base of Central Eastern European (CEE) investments, while Ivaniuk has helped to globalize his growth portfolio in the CEE region, he said in a statement, adding he and the firm have a “cool overlap and unique strategy.”

The new fund, Flashpoint RI Secondary Fund II, will focus on slightly larger companies with annual recurring revenue of $30 million to $150 million, Szalontay said. Its predecessor targeted companies with an ARR of between $10 million to $50 million.

The fund will mainly back immigrant founders from CEE and Israel that are aiming to build US and global businesses, Szalontay said, adding all of its exits have come from the US.

“From a revenue perspective, 55 percent of current revenues of portfolio companies [from] FSF I come from the US. Most economies in our region are quite small, so the best companies attack the global market and the US [on] day one,” Szalontay said.

Flashpoint will reserve 40 to 50 percent of the capital it raises for Fund II to invest in what he described as follow-on investment – making a second, third or fourth investment in a portfolio company.

“Follow-ons are a significant part of our strategy, so we would be looking to support the best companies over the life of the fund with several transactions,” he explained.