The Future of Tech Startups in Central & Eastern Europe
The European tech ecosystem is finally coming of age. 2020 has been marked by record amounts of Venture Capital being poured into European companies during the first quarter. In February 2020, OTB Ventures, a leading venture capital fund specialised in investments in technology companies in the CEE, announced the launch of its early growth technology fund, with €92.4 million in commitments. This fund is the largest Venture Capital fund in CEE and was backed by international institutional investors, including the European Investment Fund (EIF). In this context, the CEE startup ecosystem might be reaching its golden era, with its abundant engineering talent and lower labour costs and living expenses (when compared to Western Europe and the US) making the region attractive for founders and investors alike.
By 2019, 12 unicorns had sprung out of the CEE region, with a combined value of €30 billion, and were mostly founded in Estonia, Poland and Romania. To name a few success stories from the region, the region’s stars include Avast (Czechia), Prezi (Hungary), UiPath (Romania), Skype and TransferWise (founded by Estonians).
Due to the COVID-induced acceleration of digital transformation across businesses and governments, certain segments of the startup world could really be living their best years, especially the ones focused on process automation, remote collaboration, online security and e-health. On the other hand, the pandemic is expected to have a significant impact on deals in the ecosystem and flows of US capital into European tech companies. As we zoom into the CEE region, what are the most promising opportunities for tech entrepreneurs arising from the current market situation? Which roadblocks are yet to be addressed by entrepreneurs and policymakers alike? What should be the current priorities of the EU and national governments in supporting tech startups in the CEE to help them thrive?
Read more in the report below.