Investment success stories

Since May 2008, Development Fund together with its daughter company SmartCap have made 18 investments into Estonian quick-growth companies with an innovative business model. The fund invests into companies that comply with the VC profile, which is why many companies of the traditional economy or companies serving the local market have not met the investment strategy criteria. Such investments have a high-risk level, so it is normal that some of the investment projects are unsuccessful, while others will have to cover the losses incurred by the unsuccessful projects.

Examples of successful investments, where Development Fund has already exited partially or completely, include:

The first investment of Development Fund – developer of self-service package terminals SmartPost has earned back part of the investment, as the SmartPost trade mark was bought in 2010 by the Finnish logistics company Itella Logistics, which began a successful pilot project in Estonia with 36 terminals. At the same time, the fund has not yet exited this investment entirely, as the company continued developing technology and moving to international markets under the name Cleveron following the sales.

The US stock exchange company Xilinx Inc bought our portfolio company, the modem technology manufacturer Modesat Communications. The deal was concluded in September 2012 and the exit was a success for Development Fund, with the investment earned back manifold.

As the fund invests in the early seed and start stage, the investment period is often longer than 5 years. The lifetime of VC funds is usually at least 10 years, which means that in the case of investments with a better growth and higher potential, the exiting may take place only 7-9 years after the initial investment.  If an investment is unsuccessful, this can usually be seen more quickly than a success.

The growth of the value of VC investments can also be evaluated on the basis of how much additional capital has been raised. The Development Fund portfolio contains the best startups in Estonia that have been able to raise the most capital from international investors:

Since 2010, the leading UK and US VC investors Martrix Partners, Atlas Venture, Charles River Ventures and others have invested a total of 11 million EUR in GrabCAD, the social network for CAD engineers.

Shareholders of the provider of the virtual fitting room for online shops, Fits.me, include, besides the Development Fund and Estonian private investors, the UK VC fund Entrepreneurs Fund and one of the leading Nordic venture investors Conor VC Partners, which has invested a total of 7.5 million EUR.

The developer of eye movement and emotion measuring technologies, Realeyes, has raised almost 3 million EUR from the Entrepreneurs’ Fund and several other investors, which has allowed them to continue the development of the solution that is based on a simple webcam, as well as move further into international markets.