July 11 2014

GetJar Founder Forms VC Fund for European Startups, Starts in Lithuania



The founder of GetJar Inc., an app store that was acquired earlier this year, has created a new fund to back 20 Eastern European startups a year, Venture Capital Dispatch has learned. GetJar founder-turned-investor Ilja Laurs aims to bankroll 20 Lithuanian startups in 2014

The move comes as funding for European early-stage tech startups appears to be strengthening. Along with Google Ventures recently launching a new $100 million fund to bankroll startups in the region, the number and total amount raised by early-stage European funds hit a high during the second quarter of this year. In the first half of 2014, 24 early-stage venture funds closed for a combined $1.56 billion, which is an increase from the 18 funds that closed in the first half of 2013 for a combined $1.08 billion, according to VentureSource, which is owned by Dow Jones & Co., publisher of VentureWire.

These new sources, combined with early employees from companies including Supercell Oy, King Digital Entertainment Ltd.KING +7.27% and Spotify Ltd. who are now acting as angel investors, indicate longtime cash-starved startups in Europe may be finally get fed.

GetJar founder Ilja Laurs, who launched Nextury Ventures late last year, said he would immediately focus on startups in his native Lithuania.

“I believe in the country. It’s tragic how many talented people are leaving,” Mr. Laurs said, referring to the population that now hovers around 3 million, a level not seen since the early 1960s. “It (starting Nextury Ventures) is emotional for me.”

Mr. Laurs said along with patriotic reasons, he believes Lithuania is well positioned to be “the Hong Kong of Eastern Europe.” It provides a small test group which means marketplaces can reach critical mass easily and provide an inexpensive way to evaluate ideas. High consumer Internet speeds, a dense concentration of tech talent and an understanding that companies must go global to be successful are also in the country’s favor.

Mr. Laurs said in attending hackathons and other events in the country he has met “thousands” of top-notch developers and engineers. In forming Nextury, he aims to provide seed capital to clusters or three or four young engineers and pair them with a seasoned tech vet to build a company.

Nextury, which is co-run by Mindaugas Glodas, who previously led Microsoft Corp.’s efforts in Eastern Europe for nine years, has invested in five Lithuania startups out of a targeted 20 so far this year.

Only three startups have been made public: mobile data provider Cheap Data Communications, sharing marketplace Dalinuosi and 3-D printing app store Toyz Marketplace.

Those sectors, along with anticipatory-computing and human-resources technology, reflect what Mr. Laurs says will be target investment themes.

In 2015, Nextury Ventures plans to invest in another 20 startups and expand the focus to include Ukraine, Bellarus and Russia. Check sizes will be small by U.S. standards, rarely exceeding $250,000 per startup to build and test a concept.

“Everything costs a fraction of what Silicon Valley costs. Here startups can’t spend more than $250,000,” Mr. Laurs said.

Along with the cash, Nextury will spend significant time helping companies with product, branding, user interface and recruiting. Investments will come from Mr. Laurs’ personal funds. There is no set fund size.

As for how much overlap there will between his firm and efforts by other European funds emerging in the area, Mr. Laurs said he didn’t believe there would be much.

“I don’t think they put Lithuania on their radar. Not because there’s no potential, but because typically investors are quite conservative. They are either local or global,” he said.

Sungy Mobile Ltd. bought GetJar earlier this year for roughly $35 million.

Source: wsj.com

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