Morphosis Capital Fund I, a private equity fund pledges to continue financing Romanian SMEs as it expects to sign two new deals in 2021. In 2020, despite a challenging global context, Morphosis closed two transactions by taking a majority stake in the medical clinic chain specializing in imaging and radiology, Medima Health and a minority holding in Dr Leahu Dental Clinics. Together with the 2019 investment in DocProcess, Morphosis currently has a portfolio of three companies.
“When we launched Morphosis Capital two years ago, we had a clear vision to partner with ambitious and disruptive entrepreneurs to be in the trenches with them, rolling up our sleeves and bringing added value. This philosophy has never been more relevant than in 2020 when the context of the COVID-19 pandemic challenged almost all industries. It is humbling to see that the very reason we decided to get into the private equity business is recognized by the founders and entrepreneurs we partnered with. In 2021, our ambition is to find more like-minded entrepreneurs with whom together, we can have a real impact not only on their business but also on the Romanian economy as a whole,” said Andrei Gemeneanu, Managing Partner Morphosis Capital.
In 2021, Morphosis plans to invest in healthcare, technology, manufacturing, or B2B services businesses by deploying a total amount between 10 to 20 million euro. In 2020, Morphosis Capital team analyzed proposals from over 200 companies looking for investment, proving that Romanian entrepreneurs are interested in accessing growth capital, especially equity financing.
Morphosis Capital’s first investment, in September 2019, was in a technology company DocProcess. With capital provided by Morphosis, DocProcess has successfully expanded in 2020 its presence across Europe. In September 2020, Morphosis announced taking a majority stake in Medima Health. The capital infusion from Morphosis Capital fuels Medima’s expansion across Romania and the development of the teleradiology services. In November 2020, Morphosis took a minority stake in Dr Leahu Dental Clinics. The fund’s investment serves to accelerate Dr Leahu Dental Clinics’ expansion across Romania with 20 new medical units in the next five years.
“With the entry of Morphosis Capital into the DocProcess shareholding, we begun a new phase of development of our company. Almost instantly, we noticed a transformation of how we begin and build relationships with collaborators, partners, and clients. Apart from the infusion of capital, Morphosis team’s expertise and their tireless support gave us the opportunity and respite to think and put into practice an improved organization. With Morphosis being active members of DocProcess team, we feel that they have brought important contributions in developing the business strategy, marketing, establishing new contacts for partnerships and sale and many more,” stated Liviu Apolozan, founder of DocProcess.
“Partnership with Morphosis Capital took our business vision to another level. With a business plan that allows us to offer patients high-quality imaging services at the most competitive price on the market, we will actively contribute to preventive medical behavior and increase our patients’ quality of life. Morphosis Capital has an exceptional understanding of the medical business, and this allows us to combine social value with business and development,” said prof. Dr Gheorghe Iana, co-shareholder and Chief Medical Officer at Medima Health.
“We chose Morphosis Capital as a partner because it provides us with the necessary support for the faster and more efficient development of the clinic network, which in turn helps us to treat more patients in Romania. Beyond the fact that we have found a valuable dialogue partner in terms of operational processes and business strategy, Morphosis is a Romanian fund, and this fact contributes to our mission to improve the quality of life in Romania,” added Ionuț Leahu, CEO and founder of Dr Leahu Dental Clinics.
With 50 million euro subscribed capital, Morphosis expects to deploy all the capital from the first fund by mid-2022, therefore ahead of the established schedule. The management intends to invest with Morphosis Capital Fund I in four more local companies. Between 2024 and 2025, the fund anticipates exiting the businesses by listing the portfolio companies on the stock exchange or partnering with regional or global funds. The exit strategy for each portfolio company will depend on the decision taken together with the entrepreneur.
Morphosis Capital invests between five and 10 million euro per transaction in scalable Romanian SMEs with potential for national and international expansion and an EBITDA of a minimum of half a million euro. The fund’s flexible investment strategy allows it to invest in either minority or majority stakes that range between 30% and 70%, depending on the individual business needs. In line with the fund’s philosophy «private equity with a human touch», an essential pillar of Morphosis Capital’s policy is to provide access to capital and form partnerships with portfolio companies that bring real value in their respective businesses.
European Investment Fund (EIF) through the Regional Operational Programme, financed by the European Regional Development Fund, is the anchor investor in the Morphosis Capital Fund I. Apart from EIF, investors in Morphosis include Banca Transilvania, family offices from Belgium and the Middle East as well as successful entrepreneurs from Romania and abroad.