Tech-focused venture capital manager Flashpoint VC is targeting $150 million for its second direct secondaries strategy.
The firm has entered a joint venture with investment banker Roman Ivaniuk, founder of Ukraine-based BrightOne Capital, for its latest fund.
Flashpoint backs Europe- and Israel-originated companies that are seeking to grow in the US and Western Europe. Its debut Flashpoint Secondary Fund I, which launched in 2020, closed on $48 million. Including GP commitment and a co-invest pocket, the fund has a total investment size of $114 million, general partner Michael Szalontay told Secondaries Investor.
The fund has six investments in its portfolio – operational data solution K2View; e-commerce-focused technology platform Printify; global language learning marketplace Preply; corporate spend solution Mesh Payments; beauty-focused marketplace Booksy; and property technology platform Landtech, according to a statement.
Flashpoint began investing in direct secondaries via its first flagship VC vehicles, Szalontay said. The firm tracks more than 15,000 companies via its database, which helps the firm monitor the development of companies and source dealflow across its funds. The dedicated secondaries vehicle targets companies that are series C or beyond while its VC vehicles target Series A investments, Szalontay added.
Ivaniuk has over 12 years’ experience in investment banking, the statement said. He was a founder and a former managing partner of pan-European venture fund GR Capital before setting up BrightOne. His investments have included insurance technology platform WeFox, and food delivery websites Glovo and Deliveroo, the statement said.
Flashpoint has both a strong VC track record and a base of Central Eastern European investments, while Ivaniuk has helped to globalise his growth portfolio in the CEE region, he said in a statement, adding he and the firm have a “cool overlap and unique strategy”.
Flashpoint RI Secondary Fund II will focus on slightly larger companies with annual recurring revenue of $30 million to $150 million, Szalontay said. Its predecessor targeted companies with an ARR of between $10 million to $50 million.
The fund will mainly back immigrant founders from CEE and Israel that are aiming to build US and global businesses, Szalontay said, adding all of its exits have come from the US.
“From a revenue perspective, 55 percent of current revenues of portfolio companies [from] FSF I come from the US. Most economies in our region are quite small, so the best companies attack the global market and the US [on] day one,” Szalontay said.
Flashpoint will reserve 40 to 50 percent of the capital it raises for Fund II to invest in what he described as follow-on investment – making a second, third or fourth investment in a portfolio company.
“Follow-ons are a significant part of our strategy, so we would be looking to support the best companies over the life of the fund with several transactions,” he explained.