Three Ukrainian IT service companies — Sigma Software, Ideasoft and Datrics — have teamed to launch a venture fund to back Ukrainian founders from pre-seed to Series A. The three partners plan to invest “up to $1.5 million,” Sigma Software’s press service told Ukraine Digital News, expecting the fund to reach $15 million with additional LPs.
“Established by IT experts for IT geeks,” SID Venture Partners is managed by nine representatives of the Ukrainian IT industry. It will invest tickets starting from $5,000, aiming to build a portfolio of some 50 companies over five years.
Three startups already received investments: V-Art, a platform for displaying, selling and collecting digital art; Awesomic.io, a platform for finding designers with a free library of UI animations; and Finmap, a financial accounting web service for small and medium-sized businesses.
The new fund expects to share with startups the international experience which its founders, as service companies, have accumulated for nearly two decades. “Through this fund, we are starting to invest what we gained in the IT business: international expertise, business experience and of course money, “said Dmitry Vartanian, co-founder of Sigma Software and Clean.io, in an exchange with Ukraine Digital News.
Sigma Software boasts a wide range of customers, including Volvo, IKEA, Deutsche Bank, SCANIA, AT&T, Astra Zeneca and many others: “these are potential promising contacts for the young startups we’ll support.”
Sigma’s in-house incubator, Sigma Software Labs, will also involved: “This incubator strengthens our product ecosystem with new fresh ideas, attracting startups to collaborate with us more closely.”
Opening doors to small investors
The fund will seek to attract additional IT experts as LPs, bringing even small amounts, to support the portfolio companies.
According to the fund, small LPs have almost no opportunities to invest in a fund today because of “quite complicated accreditation procedures.” Addressing this issue, SID Venture Partners plans to open such opportunities in the first half of 2022, with LP tickets as small as $5,000.”
According to Olga Afanasyeva of local venture association UVCA, this new fund could be “one of those closing the funding gap” in Ukraine.
“This gap concentrates on the seed and pre-seed stages, as the majority of VC investors in Eastern Europe prefer good traction and thus later stages to invest into startups,” she said in an exchange with Ukraine Digital News.