Spotlight: Adam Niewiński - Co-founder and Managing Partner @ OTB Ventures
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OTB Ventures is a pan-European VC fund investing in DeepTech startups with a total of over $350 million under management. The fund’s expertise lies in investing in early-growth (late seed, series A), high-pace and post-product startups that develop unique technologies in four verticals: SpaceTech, Enterprise Automation & AI, FinTech Infrastructure, and Cybersecurity.
We are talking with Adam Niewiński, co-founder and Managing Partner of OTB Ventures.
Before founding OTB Ventures and entering the VC sector, you were an entrepreneur, senior executive, and angel investor. How did your journey into investing in the SpaceTech sector begin?
The first time I started thinking about SpaceTech investing was while attending Singularity University 10 years ago. At that time, I met with Moon Express, which was raising funds to build a lunar lander for the XPrize competition. I began analyzing them and their competitors for potential investment as an angel investor. In the end, I decided to pass, believing that Astrobotic was more advanced (though not raising funds at that time). However, this opened up a whole new investment area of NewSpace for me. I also developed a relationship with Chad Anderson and his Space Angels Network and have stayed close to the industry ever since.
In 2017, when we launched OTB Ventures, SpaceKnow and ICEYE were among the first three companies we invested in. Back then, I believe we were among the only 2 or 3 VCs in Europe actively investing in SpaceTech.
Which areas of SpaceTech investments do you currently find especially attractive?
In our first fund, we focused mostly on earth observation, both upstream and downstream. Within this strategy, we invested in ICEYE with SAR observation capabilities, Hydrosat with thermal and infrared, as well as SpaceKnow, which combines various datasets and works as an analytical AI layer for its clients. Over time we continued looking into other areas of SpaceTech and noticed a particular opportunity in the emerging area of “in-orbit” economy.
Additionally, increasing space congestion drives the paradigm shift in how in-space activities are conducted to maintain the safety and health of the space environment. Clearspace, one of our first investments in our second fund, is on a mission to make space more economically viable and sustainable focusing on in-orbit servicing and active debris removal. In-space R&D has also proven viable and necessary by activities on the International Space Station (ISS), but the capacity constraints should drive more free-flier activities, which spurred our investment into Atmos Space Cargo, building innovative space return technologies. Underpinning this new space economy is also an increased need for movement and maneuverability of assets in space, which necessitates better rendezvous, docking, and proximity operations technologies. This insight led us to invest in Kurs Orbital earlier in March this year. Other areas we keep actively looking into are onboard computing and AI capabilities, space cybersecurity, space situational awareness, and many others.
Tell us about the most exciting investments in your portfolio.
Our portfolio includes startups at various stages of growth and spanning different verticals, each with its unique trajectory. ICEYE stands out as one of our first investments back in 2018, and witnessing its remarkable growth since then has been truly exhilarating. Under the exceptional vision of co-founder and CEO Rafał Modrzejewski, ICEYE has continually pushed boundaries, and we eagerly anticipate the next chapters in their product and market development.
Similarly, the progress of Hydrosat has been nothing short of impressive, particularly with the launch of their VanZyl-1 mission in just a few weeks (fingers crossed). Their advancements in thermal imaging technology hold significant promise for addressing critical global challenges related to water stress, agriculture, and climate change. For example, using Hydrosat’s satellite thermal imagery, farmers are enable to effectively read earth temperature to manage their crops better, which is helping to improve global food security.
Another exciting investment we’ve made is in Silent Eight. Observing how their AI-powered platform is reshaping the landscape of financial crime detection, and witnessing its product development and global outreach is fascinating. It represents the convergence of state-of-the-art technology with a socially significant mission.
How do you view the prospects for European tech development globally, given OTB Ventures' investments in DeepTech projects across Europe with global ambitions?
In today's interconnected world, the landscape of technology knows no borders. Startups, particularly those in the DeepTech sector, aspire to scale globally from the beginning. At OTB Ventures, we recognize this fundamental truth and embrace the global nature of technology. While the nationality of our investments may be European, the impact and reach of these startups extend far beyond any single country. Many of these companies operate with teams spread across multiple countries, reflecting the diverse and collaborative nature of modern innovation.
When it comes to the utilization of technology and the client base, the scope is even broader—it's truly global. Our focus is on investing in technologies that have the potential to bring about significant change on a global scale. We firmly believe that Europe possesses an exceptional pool of tech talent, which we view as our greatest natural resource. It's imperative that we recognize and harness this talent to contribute meaningfully to global tech development.In essence, we view ourselves as investors and supporters of European DeepTech startups whose technologies and products are making significant contributions to the global tech ecosystem.
What is your opinion on the governmental and institutional support for the space tech sector? What is working well and what requires complete overhaul?
There seems to be a lot of discussion around SpaceTech as a strategic sector for European countries and institutions, and indeed we’ve seen more and more capital flowing into this area in various forms. Nevertheless, what is still disappointing are the amounts, allocation methods, and fragmentation. Spacetech by its nature is very capital intensive and follows very different development cycles than software for example, thus the need for capital to even create the first version of the product is exceeding that of most software or even industrial hardware products. Additionally, we see an increasing tendency of European institutions and countries to take the role of equity investors, which is not where their true expertise lies.We take the view that well-functioning private markets are the best allocators of capital, and countries and European institutions should ideally play the role of “first clients” for emerging technologies. Last but not least, Europe suffers from institutional fragmentation, with conflicting interests and internal focus. Even institutions that play a strategic, pan-European role, like the European Space Organization (ESA), through geo-return policy, are causing layers of complexity for startups that do not correspond to what their global competitors face.
We'd also love to see Europe catching up with the US in spending in the SpaceTech sector. Even though the European Commission has over the last few years made a significant effort in this respect, there is still a large gap. For instance, the ESA’s budget is approximately one-third of NASA's.
All in all, there are multiple challenges in the European institutional and governmental setup, but we’re optimistic we can all jump those hurdles and together compete on a global stage.
What are some key lessons you've learned from investing in these four verticals that have shaped your approach to future investments?
Our focus on SpaceTech, CyberSecurity, FinTech Infrastructure, and Enterprise AI Automation stems from a strategic alignment with key technological trends that are shaping the future and in line with our experiences. Each of these verticals represents a frontier where groundbreaking advancements are not just possible, but inevitable.
A focused approach has been especially beneficial in the rapidly evolving SpaceTech sector. As the "universum" of space technology grows, our early and continued investment in this area allows us to foresee the direction of its evolution more clearly. We can identify emerging needs and opportunities, which positions us to support the most promising innovations effectively.
From the beginning of OTB Ventures you were focused on DeepTech startups within four verticals. Is there any other sector that you find particularly attractive, but which is not currently within the fund's strategy?
We have always been passionate about DeepTech startups, particularly within our established verticals. However, a sector that I find increasingly attractive is Industrial Automation. The industrial landscape is undergoing a significant transformation, driven by the proliferation of data generated by various sensors and connected devices.
Industrial Automation stands out due to the sheer volume and complexity of data it produces. This sector is ripe for innovation as there is an urgent need for advanced tools and technologies that can reliably process and analyze this data. Efficient data utilization can lead to enhanced operational efficiencies, predictive maintenance, and smarter decision-making processes. By leveraging AI and machine learning algorithms, we can develop solutions that not only handle the massive influx of time-series data but also derive actionable insights from it.
As a fund deeply rooted in DeepTech, we see the cross-pollination of our expertise. While it's not yet within our primary focus, the convergence of our technological strengths and the needs of Industrial Automation makes it an attractive prospect for future exploration.
A few months ago, you announced the closure of Fund 2 with an impressive sum of $185 million. What factors do you believe contributed to successfully closing this fund?
Part of our success in closing oversubscribed Fund 2 can be attributed to our specialization. In such a rapidly changing market, investors appreciate a focused approach. Of course, DeepTech investments come with their unique challenges, but they also present unparalleled opportunities. According to a report by Boston Consulting Group, deep tech as an asset class is attractive relative to other technology investments because premiums are low and valuations are moderate. Many of these technologies have yet to enter the mainstream, and marketplaces have not become crowded with competing funders. The beauty of DeepTech lies in its capacity to address contemporary challenges with innovative solutions. Products from DeepTech startups are not only responses to today's world but also anticipate future needs, providing significant value to investors looking for impactful and forward-thinking opportunities.
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