Amidst Greece’s Tech Boom, Top Seed-Stage Firm Raises €75 Million

Marathon Venture Partners, a venture capital firm located in Athens and viewed as “day one partners to Greek tech founders,” has successfully secured €75 million in capital commitments for its latest fund, as stated by partner Panos Papadopoulos.

With this new fund, the firm’s total assets under management increase to €175 million, marking a significant achievement for an eight-year-old seed-stage investor in Greece and reflecting notable exits. These include the sale of Marathon’s portfolio company Augmenta to CNH, an agricultural and construction equipment manufacturer, in a cash deal that valued Augmenta at $110 million. Furthermore, Marathon also sold a portion of its shares in Hack the Box, a cybersecurity training and talent assessment platform, to investment firm Carlyle.

We had a conversation with Papadopoulos ahead of an in-person meeting during TechCrunch’s inaugural StrictlyVC evening in Athens on Thursday, May 8, which will feature an insightful discussion with Greece’s Prime Minister, Kyriakos Mitsotakis. Our primary questions are: Why Greece, and why now?

Historically, Greece has attracted less venture investment compared to other European countries. What local changes have enabled you to raise a €75 million fund, particularly at a time when global fundraising is challenging?

To start, Marathon I has excelled globally in terms of [realized returns]; we curated a portfolio that aligned well with emerging trends long before areas like AI-driven scientific research, robotics, or defense gained popularity.

What is your firm’s investment thesis, and how does this latest fund’s approach differ given the extended timelines for exits we are witnessing globally?

We empower founders who are addressing complex challenges in substantial markets. These challenges could stem from specialized expertise, such as a research PhD, or knowledge of a regulated or overlooked sector, like power grid management. We will continue to invest in our rapidly growing community, which is accumulating experience, expertise, and ambition.

Greek startups have often struggled to expand beyond their local market. How do you evaluate a company’s potential for international growth in an environment that prioritizes capital efficiency over rapid expansion?

I have a different perspective. Greek startups leverage local talent to serve top global customers right from the beginning. In our portfolio, nearly all revenue is derived from international markets, catering to notable Fortune 500 companies.

Additionally, capital efficiency and team resilience are ingrained qualities within our community.

With the number of IPOs globally declining and extended holding periods for venture-backed companies, how have your discussions with limited partners been affected concerning timelines and returns?

Decacorns are not essential for our fund’s economics to be viable. We invest early, maintain substantial equity stakes, and manage our fund sizes effectively. This opens up various pathways for significant returns, including secondaries and strategic M&A, well before an IPO. We started engaging in secondary investments back in 2021 while others in the market were proposing indefinite holding periods. In our culture, cash is crucial, a fact that seems to have been overlooked by many.

While many European VCs focus on deep tech and AI, is Marathon pursuing a similar strategy, or are you identifying unique opportunities within the Greek ecosystem?

Indeed, we are, but “deep tech” can have various interpretations. We are not tied to any specific sector; our focus is on individuals revolutionizing their fields. We may have been among the first generalist VCs to invest in defense prior to the Ukraine conflict.

Greek founders have historically received less funding than their counterparts in cities like Berlin, Paris, or Stockholm. Are you noticing valuations of Greek startups that reflect this gap, and does it offer opportunities for better returns?

In our experience, this is not solely about geography or valuation. We are supporting founders engaged in non-consensus opportunities that other VCs often overlook. We act quickly and with confidence, irrespective of who else is investing—these may seem like fundamental principles, yet they remain relatively rare.

Given the challenging global exit environment, how are you advising your portfolio companies on strategic alternatives like secondary sales or acqui-hires?

We work closely with our portfolio companies to pursue “default alive” scenarios. From that baseline, we consider all options. We find that founders genuinely wish to maintain their companies for the long term. We believe that secondary sales can contribute to that goal, and we often facilitate such strategies.

The EU has emphasized support for startups through various funding mechanisms. How important is non-dilutive capital from these sources for your portfolio companies compared to five years ago?

We value any initiatives of this nature but counsel our portfolio founders not to invest excessive time in activities outside the purview of market dynamics.

How has Greece’s enhanced macroeconomic situation affected both your fundraising efforts and the quality of startups you are encountering?

It’s beneficial not to be in the spotlight for negative reasons, but our work is less impacted by local macro conditions. Regarding talent, based on basic observations, if there is any correlation, it appears to be inverse; challenges foster innovation.

With many American VCs stepping back from European investments, has this created more opportunities for local funds like Marathon, or has it complicated syndication efforts?

This scenario has certainly shifted the market dynamics, providing more opportunities for European investors. I do not believe the influx of capital in 2021 significantly altered the landscape for European firms. We need to rely on ourselves and stay aligned with founders for the long haul.