Q&A with Lukasz Garbowski, investment director, Btomorrow Ventures
Lisa Smith, managing director of Btomorrow Ventures (BTV), UK-listed tobacco products provider British American Tobacco (BAT)’s corporate venture capital (CVC) arm, said of investment director Lukasz Garbowski: “Lukasz is deal phenomena! His energy, tenacity and creativity have enabled him to close an extraordinary 12 deals in under two years. It has been a joy to have him as a co-founder of Btomorrow Ventures: not only has he done a great job as the fund controller, but he has also followed his passion for the environment and created an ESG accelerator which is now processing its third cohort. He is an investor to watch – with one successful exit already achieved! I have no doubt that he will run his own fund one day.”
1. First, just give us a quick overview of who you work for, what you do, and how long you’ve been doing it?
For more than two years, I have been working as an investment director with BTV. Before that, I had 12 years of professional experience revolving around investments and strategy: investment banking M&A (Citigroup and Credit Suisse), corporate development and strategy (BAT, PwC) as well as PE and VC (Montagu). I was also lucky enough to study and work in Amsterdam, Boston, London, New York, Paris, São Paulo and Warsaw where I gained a global perspective and an appreciation for diversity.
2. What attracted you to CVC?
The magic resulting from the power and experience of a corporate combined with innovation and agility of a startup. If set up correctly (and with a bit of luck), the sky is the limit! With strategic rationale at heart, start-ups can benefit from growth acceleration and mentorship, corporates from fresh ideas and out-of-the-box thinking. And while in CVC, I love the opportunity to be a bridge between those two worlds and enable that magic to happen! It is exciting, rewarding and positively contributing to society and I feel privileged to be part of that ecosystem.
3. What have been your greatest successes at your unit?
More than I envisioned that can be achieved within two years when I was joining BTV as one of its co-founders! First and foremost, we have built from scratch a world-class CVC (with our MD being recently recognised in the top 100 GCV Powerlist 2021) that is now home to 15 amazing individuals. We have also managed to complete 17 investments – that’s almost one investment per month! And internally we have established BTV as a strategically critical unit, imperative for the success of BAT’s future growth strategy.
On a personal level, I am proud of having led 12 out of our 17 investments which, despite huge learning value, have required lots of effort and time given the limited resources available. I have also secured BTV’s first exit with an IRR of almost 90%! And last but not least, I have established and now lead BTV’s sustainability efforts with the creation of ESG Accelerator as the main success in that area. And all of that while double hatting as BTV’s Head of Finance and not dropping a ball (touch wood!) on fund finances and budgets.
4. What have been your biggest challenges?
Some of the challenges we have faced are typical of other CVCs: setting up a functioning fund from scratch, achieving internal strategic alignment with a parent, competing with financial VCs on deals.
However, some of the challenges have been specific to BTV such as convincing entrepreneurs to believe in BAT’s (and hence BTV’s) transformation efforts. While our parent is operating in a traditional and conservative line of business, BTV’s mission is to help BAT depart from it and venture into new market verticals. That strategy is neither obvious nor intuitive. Therefore, we had to put lots of effort into building market credibility to attract the best startups. Now our track record and portfolio of 17 companies help us validate that story!
5. What is your main professional ambition for the future?
To start with, I hope to have an exciting career (or at least a few more years) with BTV. And while there, I hope to help BTV remain at the forefront of BAT’s transformation as well as to keep delivering those 90%+ IRRs on our investments!
However, as an alternative plan, I would hope (as a Polish national) to set up and lead an Eastern European VC fund with a global footprint and ambitions. I believe that talent can be found all around the world and successful deals can be executed from any location. And while Silicon Valley and Western Europe dominate the world’s VC stage, I would like to see a global and successful fund originating from Poland, Czechia, Romania or similar. Because why not…?!
6. What do you think all CVCs could do better to make it a stronger industry?
The recent ascent of CVCs in the league tables of global VC deals has already reaffirmed the strength and attractiveness of CVCs. To make the industry even stronger, three things come to my mind:
Firstly, I believe we could form a closer community to more efficiently exchange know-how and learnings. And while we continue competing for the best deals, we could all benefit from sharing best-in-class practices to become – as an industry – more competitive against other forms of financing for startups.
Moreover, I think that greater co-investment efforts would similarly strengthen the CVC industry. Two large corporates supporting brilliant startups can lead to double magic!
Lastly, I believe we could all benefit from establishing a better methodology for measuring the delivery of “strategic value”. While we all evaluate performance based on typical KPIs (IRR, CoC, etc) the strategic value creation remains mostly uncaptured. But if quantified, could blow out of the water all other indices and – consequently – make the CVC industry an unquestionable “go-to power”.
7. And, finally, for colour, what did you do prior to CVC or in your spare time?
Academically I have pursued numerous qualifications and hold an MBA from Harvard Business School, an MA in Management from Warsaw School of Economics, an MA in Law from Warsaw University as well as a CIMA Chartered Management Accountant degree. However nerdy that might sound, I think those multiple academic pursuits helped me become a well-rounded VC investor.
Professionally, I have worked for various organisations (such as Citigroup, Credit Suisse, Montagu Private Equity, S.C. Johnson and PwC) across three continents and numerous business functions (M&A, strategy, finance, marketing, PE and VC, sales). That varied experience I find particularly useful in the VC environment: not only I can source and execute a deal, but also I can tangibly help start-ups with venture growth challenges.
On a personal level, I have pursued ballroom dancing (with achieving Polish Championships finals), I have helped rebuild the jungle ecosystem in Malaysia while being Earthwatch Fellow, I have climbed (with a bit of help from porters) Mount Kilimanjaro and I have tried to master additional languages, most recently Spanish (¡Hola!).
