1Mby1M Virtual Accelerator Investor Forum: With Milos Sochor of Y Soft Ventures (Part 5)

Sramana Mitra: For just your niche, you’re seeing a couple of hundred ventures from that hinterland. It’s actually very encouraging that that much entrepreneurial activity is happening in that region. That means that other sectors are getting into entrepreneurship as well. Conceivably, there are around 500 to 1,000 startups in action in that geography.

Milos Sochor: Absolutely. That would be a correct assumption. Entrepreneurship and startups have really taken off. I spent some time in the United States and I came back right when the crisis hit in 2009. I worked at an incubator that I had built into the largest incubator in the Czech Republic. When I compare what was happening in 2009, the type of deals and the way that people were presenting them, it was laughable.

The whole Silicon Valley way of raising money came and a lot of know-h0w was transferred. More Western Europe and US VCs visited and they started doing different startup accelerators and shows. Winning a noticeable startup show was one of the ways that some of the early successes in the region came on the map.

One of the ways was going to Paris and London and winning a startup show. It was one of the fastest ways to do that other than building slowly. When I compare that to what’s happening these days, there is much improvement. Entrepreneurs are better at presenting themselves and preparing pitch decks that are usable.

Sramana Mitra: Which funds are active in your region?

Milos Sochor: The largest Czech-based fund is Credo Ventures. There will be four of five venture capital funds that are similar to Y Soft where companies create their own venture capital fund. They usually do what I said in the beginning. They look for technologies that they later acquire. They use only their money. They don’t open it up. The largest local one is Credo Ventures.

Sramana Mitra: Do you see money coming in from other parts of Europe. Folks like Earlybird, for example, that’s an Istanbul-based company, are they active in your region?

Milos Sochor: They are, but it’s very seldom. We are being discovered at the moment. In the last three weeks, there has been one acquisition that was 14 months old that got acquired for one billion crones. That’s around $50 million. We were used to acquisitions that are half of that or even lower. Recently, we have had larger exits for the area. It’s something that we have not seen before.

There are other companies that are reaching very interesting valuations. That’s the main point where we are getting more and more discovered by the US VCs and western VCs. I see people from the region working for funds like Sequoia and others that usually make some sort of a connection to the home country and at least show up in a few startup shows. It will really take off with these exits that we see.

Sramana Mitra: Very interesting. There have been a couple of very interesting security companies from Prague. Has that spawned a lot of derivative security companies in that region?

Milos Sochor: The statistics that I have from two to three years ago was that companies out of our region control a little over half of the anti-virus consumer market in the world. It would be mainly to AVG and Avast. This part of the world is just very good at cyber-security and anti-virus. We hope that our company GreyCortex will play a big role in this space.

One thing that I forgot to mention, the strategy that we used is similar to Y Soft. Y Soft sold its technology to global giants. We like to find, for each of our companies, the giant in their industry. We like to jump on their shoulders and enjoy the ride. With every company that we have in the portfolio, we look for the giant. These companies that we have just talked about, they are good companies because they are also moving into commercial from consumer. They are noticing companies like GreyCortex because they provide the correct solution for their commercial clients.

Sramana Mitra: It has been a pleasure listening to you. I’m thrilled to hear how much activity is happening in the Czech Republic. Congratulations.

This segment is part 5 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Milos Sochor of Y Soft Ventures
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