SMOK Ventures wants to bridge the gap between SV and Poland

The firm raised $12m for its debut fund to provide seed capital to Polish companies. It maintains it's the first seed fund in Poland that has contacts at Silicon Valley firms.

Warsaw skyline behind the bridge, Poland

While most people probably don’t think of Poland as a venture capital powerhouse, there is more innovation there than meets the eye, and Warsaw-based SMOK Ventures is working to fix that.

Borys Musielak, a founder at SMOK, thinks the firm is entering the market at the perfect time to be able to lead the seed-stage ecosystem in Poland and help cement the foundation for the growing venture market.

Borys Musielak, SMOK Ventures

Musielak is a former entrepreneur and the founder of the first private accelerator program in Poland. The idea for the firm came when he was looking for a way to help the companies he was working with take the next step and he knew the struggle to find funding firsthand.

“Ten years ago, I started doing my first company in Poland and fundraising was a nightmare because that was basically talking to rich financial guys who had no idea about technology,” he says.

Musielak reached out to Silicon Valley brothers Paul and Dan Bragiel with his idea to potentially build this solution together. Musielak thought they could be a good fit because the pair were early investors in such companies as Uber and Zappos. And Paul Bragiel had raised other seed funds in small but growing venture markets of Singapore and Africa.

“I managed to convince [Paul] to do Poland because it is one of those countries where there is not enough investment versus how many bright people and engineers are setting up new companies,” Musielak says. “It seems like this economy is going to bloom, especially in start-ups.”

SMOK’s $12 million first fund closed in 2019 from 25 investors, which mainly consisted of small angel investors and the Polish Development Fund. The firm is targeting investments of $100,000 to $1 million into gaming, fintech, marketing tech and AI companies in Poland and hopefully expanding to Central/Eastern Europe in the future.

“We want to start with Poland and grow to become the leading seed fund in the region,” Musielak says. “It feels like there is still space. We feel this is the right time to still be able to grab the leader seat and make money.”

Becoming a ‘go-to fund’

The fund hopes to invest the first vehicle over the next two to three years. Musielak says that the majority of potential opportunities have come through the firm’s existing network and the fund has made two investments so far.

The fund participated in a $520,000 pre-seed round into SmartHotel in December. The Warsaw-based company looks to provide a better customer service software between hotels and Airbnb homes and their guests. The firm also invested in Exit Plan Games, a gaming studio in Poland.

“After a half year of working, we already became a go-to fund, one of the most recommended funds in seed in the country,” Musielak says. “That says some stuff about the previous ecosystem as well, but it puts us in a good position.”

Musielak says he is hoping that SMOK will be able to offer so much more than just seed capital. He hopes it will be able to help bridge the gap between Silicon Valley and venture markets like Poland.

He adds that having those connections will give founders a network they can reach to when they are looking to grow by expanding to a different geography or raising a larger funding round.

“We want to be the first seed fund in Poland that actually has those contacts [with SV firms],” Musielak says.

“That’s the biggest component, and there is also the mentality component. [Entrepreneurs] start believing that they can do something more than just be the leader in their local country.”