According to partner Panospapadopoulos, Marathon Venture Capital, a venture company in Athens that is proud to be a “first day partner of Greek technology partners,” has closed its latest fund for 75 million euros with a capital commitment.
The vehicle will increase the company’s total assets to 175 million euros. This is a meaningful amount for a 8-year-old seed stage investor in Greece, and is a significant exit reflection. Among them was the marathon portfolio company Augmenta sold to CNH last year. CNH is a manufacturer of agricultural machinery and construction equipment in a cash transaction valued Augmenta at $110 million. The Marathon also sold stocks in a secondary transaction to investment company Carlisle on Hack the Box, a cybersecurity upskills and talent assessment platform.
We chatted with Papadopoulos ahead of our in-person sit-in as part of TechCrunch’s first StrictlyVc night in Athens on Thursday, May 8th. What we want to know, and what the central question is on Thursday night, why Greece, and why now?
Greece has historically seen less venture investment than other European countries. What has changed in the local area that allowed you to raise 75 million euros when global fundraising became more challenging?
First of all, Marathon I is the world’s top percentile performer (realized returns). For example, we have built a portfolio that captures the current era, with AI-assisted scientific research, robotics, or defense becoming the norm.
What is your company’s paper, and how does this latest fund paper differ when you consider the extended timeline you see at exits around the world?
We support founders who are doing something hard in important markets. It can be challenging because unique knowledge such as a research doctorate or high institution is required, and an understanding of power grid management like a regulated or often overlooked industry. And we will continue to double our growing, rapidly growing community.
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Greece startups have traditionally faced challenges expanding beyond the domestic market. How do you assess the potential of your company’s international growth in an environment where capital efficiency is more important than rapid expansion?
I beg to differ. Greek startups have leveraged local talent to serve global customers and markets from day one. Throughout our portfolio, there is virtually no revenue from the domestic market. But they serve as the best part of the Fortune 500.
At the same time, capital efficiency and team grit are second natures for our community.
There are fewer IPOs globally, and the holding period of venture companies has been extended. How did this affect the conversations you have with your limited partner about your expected timeline and returns?
No big cone is needed for fund economics to work. We invest early, maintain a substantial equity position and keep our funds small. These offer a variety of meaningful returns, including secondary and strategic M&As, well before the IPO. In 2021, we did a second-year where most markets promised endless retention times. In our culture, cash is king. It seems that many others have forgotten that.
Many European VCs emphasize deep technology and AI. Do marathons take a similar approach, or do you think the opportunities unique to Greek ecosystems differ?
Of course, we all do, but the definition of deep technology is growing and means different things for different people. We don’t focus on any particular sector itself. Instead, it focuses on people who change sectors. We were probably the first generalist VCs to invest in defense before the Ukrainian War.
Greece’s founders historically have fewer funds than their counterparts in Berlin, Paris or Stockholm. Are you looking at ratings of Greek startups that reflect this discount?
In our experience, this is not about geography or price. We support the founders of nonconsensual opportunities that most VCs ignore. We move fast with confidence and don’t ask who else is investing. These may sound like table stakes. They aren’t yet.
Given the challenging global exit environment, how do you advise portfolio companies on strategic alternatives such as secondary sales and acquisitions?
We work with portfolio companies to work towards a living default scenario. Starting from there, all the options are in the table. Founders really want to run the company for the long term. We believe that secondary sales actually helps with that, and for the most part we support such a scenario.
The EU emphasizes supporting startups through a variety of funding mechanisms. How important is undiluted capital from these sources to portfolio companies compared to five years ago?
Such initiatives are welcomed. However, portfolio founders are advised not to waste time on activities outside the market.
How has the improvement in the macroeconomic situation in Greece impacted both your funding process and the quality of the startups you are looking at?
When you’re not making press headlines, it’s always good, but what we’re doing is less relevant to local macros. In terms of talent, I think it really is based on naive empiricism that if there is a correlation it is the opposite. Adversity is the mother of all inventions.
Many American VCs are being pulled back from European investments. Has this increased local funding opportunities like marathons, or has it made syndicated trading more challenging?
It’s definitely a different market, but it also creates increased opportunities for European investors. I don’t think the capital flood in 2021 has really changed opportunities for European companies. We must always rely on ourselves and be consistent with our founders in the long run.