OTB Ventures’ Adam Niewinski: 2023 set to be a good vintage year for VC investing

StartupReporter caught up with OTB Ventures Co-Founder Adam Niewinski at the recent Slush 2022 conference in Helsinki.

Adam talked about the launch of OTB’s new 150 million euro fund, the firm’s investment approach, and why 2023 could be a vintage year for investing, despite the downturn.

Oleksandr Komarevych (StartupReporter.eu): – Adam, tell us a bit about yourself. What is your role in the company, and what is OTB Ventures about?

Adam Niewinski: – I am the co-founder and general partner at OTB Ventures; OTB stands for ‘outside of the box’ – this is the way we think about game-changing ideas in the tech ecosystem. We’ve been investing since 2017, so we have over five years of experience investing in deep tech as a fund and much more individually.

I’ve set up OTB Ventures with my friend Marcin Hejka who previously spent 18 years at Intel Capital, where he served as VP, a Global Investment Committee member and Managing Director responsible for EMEA and India.

My background is more entrepreneurial as well as investing and banking. First, I started at Boston Consulting Group and then in 2000, I started my first business, a fintech internet startup called Expander (acquired by GE Capital). Then I began to invest and co-founded Platinum Bank (investors include Goldman Sachs, Warburg Pincus).

At that moment I discovered that I enjoy being an investor and a board member, sharing the experience and working quite frequently with really great minds – smarter people than I am, but with whom I can share my experience.

One thing I learned is that I tend to invest in companies and work with founders who have powerful visions and opinions, and they can quickly change them. What I care about is seeing someone who is willing and able to listen. I expect that each founder has solid opinions, and, constantly listening to all people, can draw their own conclusions and change their perspective or opinion. This is the right approach.

When I joined UniCredit, I started there by supervising their investment banking activities in the CEE region and I ended up being a Deputy CEO of their Polish subsidiary Bank Pekao (WSE: PEO), which was one of the largest banks in CEE.

In 2017 they offered me the CEO’s role, but at that time, I was already getting ready to launch OTB Ventures with Gregory and Marcin, so I said, “no, sorry, guys, I want to proceed with a launch of OTB Ventures”.

OK: – How do you support founders? How do you work with founders?

Adam: – Having been a founder previously, I believe I understand how founders would like to work with their board members and investors. For me, the best comparison is, say, taking a long trip from Warsaw to Lisbon in a car.

The founder or founding team takes the driving seat, taking control of the steering wheel, acceleration, brakes, and changing gears, and I am sitting next to them, probably paying for fuel and trying to spend a nice time together.

I understand we can make it together, or if we crash – we crash together. So my role is not to disturb too much but try to be helpful in a smart way.

It’s a long journey; sometimes, it is 8-10 years together. For some, it might be, hopefully a great lifetime experience. Trust and good communication are crucial in such a situation.

It is easier for me to do it thanks to my previous experience as a founder.

OK: – I liked your comparison with driving a car. You mentioned founders receive lots of bits of advice from many people. What is the best way to cope with an advice situation?

Adam: – It is important to understand founders’ backgrounds and the context of their experiences.

Because we are investors, it does not mean we are smarter. Hopefully, entrepreneurs we invest in are smarter, and that’s why they build those big companies, unicorns and huge success stories.

The value of investors, apart from the money, is experience and network.

OK: – Tell us more about the companies you invested in.

Adam: – We have two different focuses – regional (Central and Eastern Europe) and sectorial (AI automation, SpaceTech, FinTech, Infrastructure, Cybersecurity).

We are among the top three European investors for SpaceTech. Our already announced investments in SpaceTech are:

• Hydrosat is a data analytics company that uses thermal infrared imagery to provide unprecedented insights for commercial and government customers. The company’s high-capacity thermal imagery affords a unique perspective on our planet, and Hydrosat’s advanced analytics convey precise crop yield forecasts and improved irrigation tools to financial and agribusiness customers around the globe.
• ICEYE is building a satellite-based service to provide the world with access to near-real-time imagery from space. Their synthetic aperture radar (SAR) instrument can capture images through clouds, darkness and other obscuring elements, making it more reliable for operational use than optical camera systems.
• SpaceKnow – A platform that empowers decision-makers with the analysis of satellite images. SpaceKnow uses commercial imagery from satellite operators to provide targeted industrial and geographic intelligence.

OK: – What is your average check? What a startup can expect when they knock on your door?

Adam: – We love series A. We can do a late seed and series B, but series A is our sweet pot.

Typically, we invest between 1 and 7 million euros and take 10-15% equity as leading or co-leading investor. So, we would never invest for 3-4%. So, either you believe you are in or not.

OK: – We are at the moment at Slush, the second day of the conference. What is your expectation after Slush for you and your fund?

Adam: – Next year is going to be very challenging. I’ve been in the business of technology and startups for quite some time. I lived through the market crashes of 2001, 2008/9, and these were difficult times and experiences.

We live in a cyclical world, which is good as nature is cyclical. We can not constantly be in prosperity and growth. There needs to be a bit of a slowdown, a cleansing experience. We are going to have one in 2023. Hopefully, it will not be extended for too long. We are far from the bottom, which could be mid 2023.

It is important for everyone: startups, investors, tech ecosystem.

We will keep investing, not sitting and watching on the sidelines. It is difficult to predict the future, so no one can say next year will be horrible, but it looks like it’s gonna be pretty tough.

Probably 2023 will be difficult, but the best investment opportunities are typically in the downturn. The best vintages for VC are during weak years. You can spot good companies with reasonable valuations. If you can only pick and choose the right ones, it could prove to be a real winner.

We believe it is going to be a good year for investing.