Draper Fisher Jurvetson’s (DFJ) latest international affiliate fund, DFJ Nexus Fund, is expected to close by the end of the first quarter, with commitments of between $80 million and $100 million, PE Week has learned.
The Menlo Park, Calif.-based venture firm announced the formation of the effort last year and teamed with Kiev-based TechInvest to raise funds and help provide deal flow. At the time, the fund’s goal was to raise between $50 million and $80 million.
Managing Director Roman Kyzyk says that the firm has managed to expand its intended LP base, and that the fund’s LPs will consist of European pension funds, including Swiss and German pension funds; a German bank; and high net worth individuals from the United States and the former Soviet Union. Kyzyk expects between 40% and 45% of the fund’s LPs will be Western European and 30% will be from the United States. The remaining LPs will stem from the Ukraine and other former Soviet states.
The fund is focused on the Ukraine but will also invest in startups throughout the former Soviet Union. In managing the funds, Kyzyk will divide his time between New York and Kiev.
DFJ Founder and Managing Director Tim Draper says that the political changes that happened in the Ukraine, with President Victor Yushchenko coming to power last year, make for a viable venture market. “When they have a political revolution like that it creates a huge economic opportunity,” says Draper, who met with Yushchenko last year.
Draper also says that the Ukraine produced many of the Soviet Union’s leading mathematicians and scientists and says that its future is quite bright. “The Ukraine is going to be fantastic. The Ukraine will be like Israel.”
Kyzyk says that the Ukraine boasts a sound educational system as well as low-cost labor and other economic incentives, which will make it a logical destination for U.S.-based venture capitalists looking for high returns.
The projected final close of the fund is within the next 60 days, but Kyzyk says that DFJ may hold the fund open for straggling LPs.
DFJ is not the only firm interested in the former Soviet block. Scimitar Global Ventures is raising a $50 million fund to invest in startups in Romania, Northern Iraq and North Africa. Central and Eastern Europe ranked second among developing markets in a survey of private equity LPs conducted by London’s Coller Capital (see related story, page 4).