CVCA & Deloitte Activity Report 2021

Deloitte, in cooperation with CVCA, prepared a report in which part was devoted to the Slovak PE&VC market. Interesting data and a recovery in activity signify the recovery of the PE&VC market in Slovakia.

Highlights from the report:

The pandemic effect was the acceleration of tech, with companies undertaking digital enhancement at an increased pace. Demand for businesses supporting this may have helped boost venture capital to record levels in 2021.  

The healthy deal activity was accompanied by a buoyant exit market, and 2021 saw the highest level of divestment capital since 2016. It is a refreshing sign of private equity’s patience, with 2020 giving way to defensive portfolio management and cash preservation before eventually pivoting back to growth. Equally encouraging is the absence of write-offs in 2021.

The Slovak private equity and venture capital market have seen the value of investments nearly double year-on-year. The market has been growing in terms of capital deployed fairly steadily over the last decade except for two years. In fact, if we remove 2020 from the dataset – an outlier of a year for most markets – we see that Slovak deal activity has grown in terms of volume and value since 2017. Prospects for continued growth are strong, with investors sitting on ample dry powder ready to be deployed. This level of investable money combined with a relatively dwindling number of investable opportunities has led to a competitive market for the best businesses, which impacts valuations.

The majority of 2021 investments in Slovakia were venture capital deals, and mostly in the ICT space, similar to the Czech investment scene. The largest deal was the investment of IPM Group and Venture to Future Fund into Photoneo (EUR 19.4m), a manufacturer of industrial cameras12. Enterprise Investors also backed Slovak financial services intermediary FinGO, investing over €19m to help the business expand in Slovakia and the Czech Republic. A highly active investor is Bratislava-based Sandberg Capital, which backed Titans Freelancers as well as three businesses in the Czech Republic in 2021 (Daktela, Mainstream Technologies, D3Soft).

The full report you can find in the attachment