Venture in Eastern Europe Report 2023
Table of content
- Foreword
- Welcome
- Acknowledgements
- PARTNERS
- 2023 — Against All Odds
- Key findings — Venture in Eastern Europe
- Top 20+ companies raising the largest venture deals in Eastern Europe
- A plethora of builders from Eastern Europe
- Top industries addressed by Eastern European born startups
- Deep Dive — Venture in Romania
- VC funds raised in 2023 with investment thesis in Eastern Europe
- Conclusions
- Dataset
- References
- ABOUT HOW TO WEB
- THE DATA
Foreword
We are strong believers in Eastern Europe’s capacity to step on the world stage of startups and venture capital and respectfully earn its position as a solid powerhouse of global-scale technology businesses. This emerging role of Eastern Europe has been shown repeatedly through the rise of startups with Eastern European DNA that have become some of the most successful companies worldwide. Some companies are household names such as Estonia-born Skype, Wise, Pipedrive, Bolt and more. However, many other great companies emerged from countries across the Eastern European region and stepped on the global stage such as Poland-born Docplanner, Booksy, Romania-born UiPath, Bitdefender, Hungary-born Prezi, Bitrise, Czechia-born Productboard, Avast, Ukraine-born GitLab, Grammarly, Bulgaria-born Gtmhub, Payhawk, Latvia-born Lokalise, Printful, Lithuania-born Vinted, MailerLite, Croatia-born Infobip, Fonoa and many more that followed.
“Success stories of technology companies born from Eastern Europe emerge year after year and have been establishing a pattern for the last 30+ years, and counting. Starting this year we’re striving to surface the deals behind the whole Eastern European region to draw insights on how the industry over here is shaped and is finding its edge, making it one of the world’s startup powerhouses.” Alexandru Agatinei, CEO How to Web
Eastern Europe is in pole position with startups from or with roots in the following 19 Eastern European countries that completed venture deals in 2023 (in alphabetical order): Bosnia and Herzegovina, Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Greece, Hungary, Latvia, Lithuania, Moldova, Montenegro, North Macedonia, Poland, Romania, Serbia, Slovakia, Slovenia, Ukraine.
“In the expanding landscape of the region’s tech ecosystem, the 2023 Venture in Eastern Europe Report throws a very valuable light on the path forged by startups that embody resilience, innovation, and the unwavering spirit of ambition. At BCR Seed Starter, we are contributing to this vibrant world, offering a guiding light and supportive hand to the innovators shaping our digital tomorrow. This report celebrates the collective achievements of a region that is not just participating in the global tech narrative but is courageously redefining it. Our role is driven by a deep belief in the transformative power of Eastern European entrepreneurs, whose determination inspires us to envision a future where technology empowers every corner of our community, knitting a stronger, more connected ecosystem that thrives on collaboration and shared success.” Carmen Dibuş, CEO BCR Seed Starter
“In 2023, the venture world was divided between the rise of AI and AI-related startups and a challenging fundraising environment for almost everybody else. This reality has impacted Eastern Europe as well – many of last year’s winners fall into the first category (starting with ElevenLabs), while investors have preferred to do fewer new investments while financing their existing portfolios. Compared to US / WE startups, Eastern European startups have taken fewer major hits, with just a small number of startups doing significant layoffs or closing down – a testament to their cash efficiency, but also to the smaller number of companies playing the aggressive high-growth game of venture. The overall venture shake-up has partially decompressed the labor market, where US / WE startups were competing with local startups just a few years ago. Assuming a predictable geopolitical situation, 2024 is poised to restart major liquidity events in the US and bring back a more optimistic view of the tech market, including in Eastern Europe.” Bogdan Iordache, General Partner Underline Ventures
We invite you to enjoy reading this new edition of the report – now reaching its 4th edition. Get your insights through the findings and draw a signal of your own by spreading the news to your network. The rules and principles for filtering and labelling the data are detailed at the end of the report, along with a link to the transactions list (2023 for Eastern Europe and 2017-2023 for Romania) and a list of the new VC funds raised in 2023. Let us know if you find anything that should be updated.
Welcome to Venture in Eastern Europe by How to Web
Venture in Eastern Europe is How to Web’s endeavor to support the investment community focused on Eastern Europe through Venture in Eastern Europe Report and Venture in Eastern Europe Event (taking place before the How to Web Conference), both described in detail below.
About Venture in Eastern Europe Event
The Venture in Eastern Europe event, formerly known as Venture in CEE, has been an integral part of the How to Web Conference, focused on creating the proper context for European VCs to connect, share industry knowledge, and develop an in-depth vision for investing in the region.
With its upcoming edition taking place on October 1 (one day before the How to Web Conference) in Bucharest, Venture in Eastern Europe is a cornerstone event for the investment community. It brings together LPs, public and private sector investors, fund managers, and industry professionals across Europe. Beyond being a deal flow platform, it fosters unparalleled networking opportunities and knowledge exchange.
About Venture in Eastern Europe Report
Started in 2021 as an extensive analysis of the venture deals involving Romanian startups, the report expanded to showcasing the region’s dynamic of the venture deals raised yearly by tech startups, from early-stage pre-seed and seed rounds to late-stage series, exits, and IPOs. The analysis of Romanian venture deals was also our inception with performing thorough analyses of the venture market and you can thus find reports covering its evolution with historical data going back to 2017.
Starting with this edition of the report, we’ve expanded this work to the whole Eastern European region, and we’re striving to surface the deals behind the entire region and draw insights on how the industry in this part of Europe is shaped and is finding its edge, making it one of the world’s startup powerhouses. Contributing to this pole position are startups from or with roots in the following 19 Eastern European countries that completed venture deals in 2023 (in alphabetical order): Bosnia and Herzegovina, Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Greece, Hungary, Latvia, Lithuania, Moldova, Montenegro, North Macedonia, Poland, Romania, Serbia, Slovakia, Slovenia, Ukraine.
Partners
Co-authors
Miruna Bumbaru & Alexandru Agatinei | How to Web
Contributors
Bogdan Iordache | Underline Ventures, Abel Aioanei | Dreamdata, Remus Radvan | Wayra, Nikola Yanev | Eleven Ventures
Data Providers
Media Partners
While investment volume decreased in 2023, the Eastern European ecosystem continues to grow and mature together with the region’s offerings of stability, talent, and potential for high-growth startups.
Overall takeaways on the Eastern European venture industry:
- Investment volume dropped 57% compared to 2022, but this aligns with the broader European trend.
- Eastern Europe saw a smaller decline than the European average, and investment volume is still 18.4% higher than in 2020.
- Late-stage investments (Series A & B) dominated, possibly due to Western investors seeking more stability and less inflated deals.
- Follow-on rounds were also strong, indicating continued support for existing players.
- Top performing countries were Greece, Poland, Lithuania, Estonia, the Czech Republic, and Romania.
- ElevenLabs (Poland) achieved unicorn status within two years, showcasing the potential for rapid growth in the region.
- Eastern Europe’s startup ecosystem is maturing and attracting more attention from investors with a shifting focus towards sustainable business models and profitability.
- Eastern European startups are seen as more resilient due to their focus on unit economics and financial stability.
Highlights:
- Investment volume: €1.85 billion, down from €4.2 billion in 2022.
- Top 6 countries: Poland, Greece, Lithuania, Czech Republic, Estonia, and Romania (together accounting for 84% of total volume).
- Growth: Romania saw the only significant increase in investment volume (+27.4%).
- Stage focus: Series A & B rounds made up 77% of total volume.
- Follow-on rounds: Represented 79% of total volume, with Greece, Poland, Lithuania, Estonia, Czech Republic, and Romania contributing the most.
- Top 20 deals: Raised €840 million, with Greece, Lithuania, Poland, Czech Republic, Romania, and Estonia being the most represented countries.
”In 2023, we continued to see very strong rounds, especially in (enterprise) B2B SaaS happening in CEE. Companies like FlowX, Vue Storefront and CastAI show that even beyond the $20m round mark, there is large appetite from Growth Funds doubling down on early winners. After we experienced the first broader unicorn wave in 2021, we saw in 2023 that the premium for high growth (albeit at a more moderate burn multiple) reinforces ambitions that go beyond CEE and target global leadership.”
Staffan Helgesson, General Partner Creandum
“2023 was a year of ambivalence. The startup ecosystem, as a whole, experienced an even greater cooling than in 2022. Large investment rounds occurred only exceptionally, and most startups opted to extend their runway. The AI wave stood in contrast to this trend— it underwent an incredible boom, both in terms of growth and funding. In general, however, the region has emerged once again as a pretty resilient region compared to the West, which I attribute partially to the efficiency ingrained in our local DNA and partly to the region staying less susceptible to the 2020-2021 bubble.”
Karolina Mrozkova, General Partner Credo Ventures
Type in your details to unlock the full report sections and get access to:
- breakdown of pre-seed / seed / Series A / Series B and further rounds
- breakdown of first time invested / follow-on rounds
- dataset, extended analyses and more
THANK YOU! ENJOY READING THE REPORT BELOW!
ABOUT HOW TO WEB
Supporting entrepreneurship and innovation is at the foundation of everything we do. And in 2024, as in every year, all that’s best in Eastern Europe in terms of startups and technology get ready to gather at the How to Web Conference in Bucharest, Romania.
Save the dates and see you this year in Bucharest as follows:
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Oct 1 – Venture in Eastern Europe, the event
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October 2 & 3 – How to Web Conference
Started as one of the most influential Eastern European startup conferences, How to Web has championed the regional tech entrepreneurship and innovation scene and has accelerated the adoption of the startup culture through leading events, programs, and knowledge. Every year, through our initiatives such as How to Web Conference, Launch, HTW Institute, and more, we help thousands of founders and operators to create better startups, products, and teams, with the support of some of the leading tech companies, experts, and investors. For more than a decade already at How to Web we’ve been organizing the How to Web Conference, Eastern Europe’s leading startup & innovation conference. The How to Web Conference is a gathering of more than 3.000 startup builders, business leaders, and innovation explorers that relentlessly network and gather knowledge during the conference days.
Find out more at howtoweb.co
In addition, we’re building Launch, a founder-centric community as the place where Romania’s next generation of founders and talent in technology grows. Find out more at launch.ro
Also, we’re helping product companies to level up their product people’s game. We do this through HTW Institute by providing live (default online) sessions on product-related topics delivered by the godfathers of the global tech scene – Bob Moesta (JTBD), Ash Maurya (Lean methodology), Bruce McCarthy (OKRs, Product roadmaps), Matt Lerner (Metrics, Growth). Find out more at htwinstitute.com
ABOUT BCR SEED STARTER
BCR Seed Starter is the first Corporate Venture Capital (CVC) fund initiated by a bank in Romania. As a wholly owned subsidiary of Banca Comercială Română, BCR Seed Starter is dedicated to fostering innovation and growth within the technology startup community.
Their focus extends primarily to startups based in Romania and across Central and Eastern Europe, offering financial support as well as a wealth of knowledge and resources at a regional level.
BCR Seed Starter targets investing in approximately 10 startups over the next five years and with an average ticket of €500K. Depending on market dynamics, the attractiveness of potential targets, and investment performance, the strategy may be revised, including increasing available funds.
It will fund mainly technology startups focused on enabling banking services, as we want to unlock strategic and technological returns for our main business, but we are open to the entire ecosystem of tech startups in Romania. Because tech entrepreneurship is a source of growth and diversification in the Romanian economy. BCR Seed Starter ensures access to the entire Erste Group ecosystem, offering not just financing via equity contributions but also strategic partnerships. This amplifies the impact on startups, especially in the early stages, and allows them to collaborate directly with BCR and Erste Group, benefiting from our trust, expertise, network, and growth opportunities.
Find out more at seedstarter.ro
ABOUT UNDERLINE VENTURES
Launched in 2022, Underline Ventures has finalized the raise of its first fund, reaching a total of $20M. The fund’s capital has been raised mostly from tech founders and operators, along with other business leaders and international fund-of-funds. It plans to double down its efforts to further develop an impactful platform for its portfolio companies.
They’re building a portfolio of 20+ early-stage startups founded by Eastern European founders, investing an average investment ticket of $500K. So far, the fund has finalized 7 investments in Romania, Croatia, Serbia, and the broader Eastern European diaspora, ranging from big data & AI and cybersecurity to ecomm infrastructure, and we are actively investing.
They are focused on supporting exceptional founders to build solutions for hard problems that can scale globally. For Underline Ventures, founders come first, and they are industry agonistic, but they’re paying extra attention to enterprise automation, AI, cybersec, industrial tech, defense, and climate-related startups.
At this moment Underline Ventures invested founders can benefit from recruitment services (with the help of Ioana Patran, ex-Microsoft), communication management (with the help of Adriana Spulber, ex-How to Web & Pago), growth advisory (with the help of Vlad Ionescu, ex-UiPath), financial planning and fundraising (with the help of Mihai Faur, UiPath) and integrated marketing strategy (with the help of Ioana Serban, ex-FintechOS), along with Bogdan Iordache’s help on venture strategy and fundraising.
Founders and operators from companies like UiPath, Telerik, Bitdefender, and more are also advising the portfolio startups regularly, whenever the startup’s need arises.
Find out more at underline.vc
THE DATA
We collected most of the deals made public by sourcing from Crunchbase and media outlets. We then added to the public data a layer of data coming from operators in the region – from business angel groups to programs and communities to VCs and all in between. All of them are mentioned within the acknowledgements section at the beginning of this report, under the data providers line. We thank them all again for making this possible.
There are no perfect reports and there is no perfect set of data. Please assume a 90-95% accuracy of the numbers presented. Our data verification and validation process is a process of human intelligence, complemented by input from How to Web’s network.
In terms of positioning our report’s data, it’s also important to note that we combined several data collection and verification methods, including:
- aggregating public information about investment rounds
- data from trusted contributors such as angels, VCs, startups, accelerators, relevant organizations and institutions, other noteworthy reports etc.
- third-party sources for data points such as Crunchbase and Linkedin profiles etc.
- informed assumptions
Here is how you should look at the data and stats and what the main criteria for keeping a startup on our final list of transactions are. The data was selected and labelled based on the following set of rules:
- We tracked only equity investments of companies with either Eastern European headquarters, Eastern European founding teams (or strong representation of Eastern Europeans in the founding teams), or strong ties to the Eastern European market. We did not include in the final list of transactions grants, loans, convertible notes, buy-outs (etc. We didn’t include deals that are committed but not signed yet or still in progress (on crowdfunding platforms for example). We did add bridge rounds, but we tagged those as “follow-on”.
- All equity investments with no public value have been eliminated. Their number is small and, while it affects the totals, it does not affect them significantly.
- Investments with no specified investors were also not included, as many of those are actually grants, service payments or other similar financing instruments and not equity investments.
- There’s more capital to be added via grants, private and institutional undisclosed VC and angel rounds or money committed but not wired. We didn’t add these to the final analysis to keep the total volume accurate, but we did keep a raw version of all this data in the datasets to which you’ll find a link at the end of the report.
- The list of transactions does not include investments in foreign startups with Eastern European founders. However, we did make a couple of exceptions. All transactions are listed in EUR or converted into EUR if the original transaction was made in a different currency.
- Transactions up to €300K were tagged as pre-seed rounds, all transactions between € 300K and €3M were tagged as seed rounds, and everything above €3M was tagged as a Series A round. Exceptionally, some transactions above €300K were tagged as pre-seed based on the timing of the round and conversations with the founders about the objectives for the round. Also, investments smaller than €3M were tagged as Series A rounds as the companies were expanding on the regional market. Using this classification, some companies have raised multiple pre-seed and seed rounds, if the total capital raised was not over €200K, respectively €3M.
- Splitting capital between investors in a transaction was made using the simple rule that the lead investor contributes 80% of the capital, while the co-investor with 20% of the capital. While this is in no way an exact approximation, it is definitely in the ballpark. We also made a split attribution of capital volume by local capital exclusively / international exclusively or mixt.
Do let us know if you find anything that should be updated.