Morphosis Capital Partners BV announced the official launch of Morphosis Capital Fund II, its second investment fund, with a committed capital of over EUR 100 million. This is double the size of its first fund commitment. 

The new fund aims to support the growth of SMEs in Romania and the region in key sectors such as healthcare, B2B services, consumer products and retail, and niche manufacturing.

Through its second fund, Morphosis Capital aims to make between nine and ten investments, each with an investment ticket ranging from EUR 10 million to EUR 15 million.

By comparison, its first fund made six investments with a ticket size range between EUR 5 million and EUR 10 million.

The second fund's strategy will primarily focus on companies in Romania, but it will also target other countries in the region, such as Bulgaria, Croatia, Czechia, Poland, Slovakia, and Slovenia. The fund will target companies with an EBITDA between EUR 1 and 5 million, prioritizing majority stake acquisitions, either independently or alongside co-investors.

This is the first time that Morphosis Capital pursues a regional expansion strategy, Fund I having solely targeted investments in Romania. Additional recruitment efforts were made to enact this new strategy with an increase in team size from 8 to 12 members in 2024. The nearly doubled fund size and ticket size from Fund I to Fund II reflect the solid performance of Fund I, which has significantly increased investor commitments and confidence, further establishing the fund manager as a leading player in the sector, the fund said.

In selecting portfolio companies, Morphosis Capital targets businesses operating in growing markets, within fragmented industries, with scaling potential through organic growth or buy & build strategies. The fund also prioritizes companies with strong financial performance, a robust organizational culture, and prospects for mergers and acquisitions, offering exit opportunities for investors.

Morphosis Capital Fund II has already made two investments, the first being in Mark Twain International School (MTIS), the first private educational institution in Romania with a dual curriculum. Following the partnership, MTIS announced its expansion plan to build two new campuses near Bucharest, aiming to become the national leader in private education. The second investment was recently closed with Supermarket La Cocos, a local retailer owned by entrepreneurs Iulian and Gianina Nica, in December 2024.

"Building on the success of our first fund, which saw us make six strategic acquisitions in high-growth sectors, the launch of our second fund represents a pivotal step in our growth strategy. With double the size, Morphosis Capital Fund II equips us with the resources needed to further support entrepreneurial companies across Romania and the region. By driving both organic growth and M&A strategies, we will help companies scale rapidly, enabling their full potential, driving the long-term development of the entrepreneurial ecosystem throughout Central and Eastern Europe," Andrei Gemeneanu, managing partner at Morphosis Capital, said.

"The success of our first fund, which generated an IRR of over 30% through one full exit and two partial exits, sets a solid foundation for Fund II. As our first fund matures, we are confident in identifying further profitable exit opportunities that will strengthen our position as a trusted partner to both our portfolio companies and investors, while continuing our mission of identifying and partnering with innovative businesses through Fund II," he added.

Morphosis Capital's portfolio includes DocProcess, Medima Health, EMI, Cronos Med, Stay Fit Gym, Mark Twain International School, and Supermarket La Cocos. In 2023, Morphosis made its first full exit by selling its minority stake in Dr Leahu Dental Clinics to Regina Maria. 

Morphosis Capital Partners BV is co-financed through the National Recovery and Resilience Plan (NRRP) and the InvestEU Fund of the European Union via an initiative managed by the European Investment Fund (EIF) to support investment funds. In addition to EIF's backing, Morphosis Capital has attracted capital from the European Bank for Reconstruction and Development (EBRD) and commitment from the International Finance Corporation (IFC). The fund has also gained the trust of local and international family offices, such as Belgian-based Vybros Capital Partners and Inspire Asset Management, further diversifying its investor base.

(Photo: Morphosis Capital)

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