Jan Barta sold Rouvy for billions, now seeks Czech investors

Investment group Pale Fire Capital, co-founded by entrepreneur Jan Barta, is launching a second bond issue and hopes to raise 750 million crowns from Czech households, with the option to increase the issue to 1.5 billion. This comes just four months after the group pulled off one of the biggest exits in the history of the Czech tech scene — the sale of cycling app Rouvy to America's Zwift, in a deal that saw shareholders split roughly four billion crowns among themselves.

The public bond offering launched on August 17. The bonds are issued by Pale Fire Financing, a wholly owned subsidiary of parent company Pale Fire Capital SE. The notes carry a fixed coupon of 7.25% a year, paid semi-annually, and mature in September 2031. The issue is arranged by J&T Banka, with subscriptions accepted until the end of August.

Pale Fire Capital was founded in 2015 by four entrepreneurs — Jan Barta, Dušan Šenkypl, Petr Krajíček and David Holý. Today the group holds stakes in the auction platform Aukro, and it first gained international attention through the restructuring of America's Groupon, where Šenkypl took the CEO's chair.

Bonds are not a new instrument for the group: its first issue, through the same subsidiary, came in September 2021. The original plan was to raise 500 million crowns, but strong investor interest pushed the amount up to 750 million. Those bonds mature in October this year, and part of the proceeds from the new issue will go toward refinancing them, with the rest funding new deals and growing the private equity portfolio.

Over the past five years the group has grown considerably. As of December 31 last year, its assets were worth 10.5 billion crowns, and by the time the prospectus was issued, the guarantor was valuing the portfolio at around 12 billion. The story of the Samek brothers from Vimperk, whose company Rouvy was nearly 60% owned by Pale Fire, played its part in that growth — the deal was the biggest Czech tech transaction of the year.

“Our ambition is to invest in outstanding Czech and European companies and help them succeed globally, as we did with Rouvy, for example,” says group partner Jan Černý, who joined Barta's team from billionaire Tomáš Krska's BHM fund. Over the next five years the group plans to double the amount of its own capital committed to investments — around €400 million, or roughly 9.8 billion crowns.

“We chose a nominal value of 10,000 crowns deliberately, so the entry threshold wouldn't be too high and smaller investors could also join Pale Fire,” group partner Jan Barta explains of the minimum investment per bond.

Bonds have become a popular instrument among Czech billionaires in recent years. Jiří Šmejc, for instance, raised 1.25 billion crowns at 6.35% a year through Emma Capital in February, Michal Strnad's CSG has a pre-approved ten-billion-crown program, and retail bonds have also been issued by Karel Komárek's KKCG and by companies in the PPF group's portfolio, such as the TV channel Nova.

Still, this segment should be distinguished from the troubled cases on the Czech bond market: a growing number of issuers have raised hundreds of millions or billions of crowns from households only to run into difficulty and fail to repay them. These include companies such as RSBC, Solek, YD Capital and Premiot.