#Romania #Fund II #Bucharest #Morphosis Capital

Morphosis Capital Launches Fund II

Morphosis Capital Partners BV, a prominent growth capital fund, recently announced the launch of its second investment fund, Morphosis Capital Fund II, with a remarkable commitment of over 100 million euros. This new phase in their investment journey reflects a significant increase in capital commitments compared to their inaugural fund, which was approximately 50 million euros.

The primary objective of Morphosis Capital Fund II is to energize the growth of small and medium enterprises (SMEs) in Romania and surrounding regions. The fund will focus on key sectors including healthcare, business-to-business (B2B) services, consumer products, retail, and niche manufacturing.

Andrei Gemeneanu, Managing Partner at Morphosis Capital, expressed his excitement about this milestone, stating, "Building on the success of our first fund, which enabled us to make six strategic acquisitions in dynamic sectors, the establishment of Fund II is a critical advancement in our growth strategy. The doubling of our fund size allows us to enhance our support for entrepreneurial businesses across Romania and beyond."

With an aim to facilitate 9-10 investments, each ranging from 10 to 15 million euros, Fund II's investment strategy marks a pivotal shift from the previous fund's approach. The initial fund focused on smaller investments within one country, while Fund II embraces a broader regional strategy targeting countries such as Bulgaria, Croatia, Czechia, Poland, Slovakia, and Slovenia. Morphosis Capital plans to acquire majority stakes in companies with an EBITDA ranging from 1 to 5 million euros.

Visualizing the operational expansion, the Morphosis team has increased in size from 8 to 12 members, signaling a robust commitment to its new regional strategy. The impressive performance of the first fund, boasting an Internal Rate of Return (IRR) over 30% through successful exits, reinforces confidence in the second fund, highlighting Morphosis Capital's position as a trusted partner for both portfolio companies and investors.

The preparation and execution of Fund II have already resulted in two completed investments. The first, a commitment to Mark Twain International School (MTIS), positions it as the first private educational institution in Romania to offer a dual curriculum. The second investment concluded in December 2024, engaging with a local retailer, Supermarket La Cocos.

In developing Fund II, Morphosis Capital has garnered endorsements from significant financial institutions. Co-financed through the National Recovery and Resilience Plan and the EU's InvestEU Fund, it has secured backing from the European Investment Fund (EIF), which previously anchored the first fund. Moreover, the fund has attracted interest from the European Bank for Reconstruction and Development and the International Finance Corporation, legitimizing Morphosis Capital as a key player in supporting Romania's entrepreneurial ecosystem.

Investors are increasingly recognizing the potential of Morphosis Capital Fund II, further supplemented by commitments from local and international family offices including Belgian-based Vybros Capital Partners and Inspire Asset Management. The endorsements reflect a diversifying investor base committed to fostering growth in Romania's SME landscape.

The Morphosis Capital initiative is backed financially by the European Union, particularly through the NextGenerationEU scheme, along with support from the Romanian government through the Romania Recovery Equity Fund. With these vital resources, Morphosis Capital is poised to invigorate the entrepreneurial outlook in Romania and neighboring nations, identifying and partnering with innovative businesses to drive sustainable growth.

As Morphosis Capital embarks on this new venture, it aims to play an instrumental role in nurturing the entrepreneurial ecosystem across Central and Eastern Europe, paving the way for further advancements and possibilities in the coming years.