The Eastern European region has faced challenges with venture investment in 2023, mirroring global trends. However, there are positive signs, particularly with the burgeoning interest in AI and other innovative fields. According to the “Venture in Eastern Europe Report” by Romania-based tech platform How to Web, countries including Poland, Greece, Lithuania, Czechia, Estonia, and Romania have made significant strides in this area.
The report identified key findings regarding venture investment in Eastern Europe. Despite a global 50% decrease in venture deals in 2023, the region experienced a 57% reduction in investment volume, from €4.3 billion to €1.9 billion. Nevertheless, when considering a broader timeline, the 2023 investment volume was still 18% higher than that of 2020. This suggests that despite the challenging circumstances in 2023, it served to address an overinflated market.
In 2023, late-stage investments in the CEE region were strong, with substantial capital directed towards series A and B financing, a positive indication for the region’s startup ecosystem. There is a presumption that Western investors are looking towards Central and Eastern Europe due to its potential stability, less inflated valuations, and the opportunity for high-growth and profitable startups.
Significantly, countries such as Greece, Poland, Lithuania, Czechia, Estonia, and Romania made substantial contributions to the investment volume, with follow-on rounds accounting for 79% of the total investment. Several of the top investment deals in 2023 were in AI-related startups, demonstrating the resilience of this sector in contrast to the challenges faced by other industries.
The report also highlighted that over half of the investment volume in Eastern Europe in 2023 was associated with industries such as energy, health, heavy industry, big data, cybersecurity, and browser developer tools. This indicates a diverse and dynamic tech landscape in the region.
Furthermore, the report underscored the role of instruments such as Bulgaria’s Recovery Equity Fund of Funds (REF) in rejuvenating the country’s ventures. These instruments reflect a broader commitment in the region to promote sustainable development, as well as the green and digital transition.
Despite the significant challenges of 2023, the report suggests that Central and Eastern Europe navigated the situation adeptly and is poised for a robust 2024. The startup ecosystem is anticipated to continue maturing, attracting more international investments and mega-rounds. Additionally, the region boasts a strong pool of tech talent, with founders aspiring to make a global impact with innovative ideas.
In essence, the report portrays an optimistic outlook for Eastern Europe’s potential as a hub for AI and innovative technology. With the appropriate support and investment, the region could witness a surge of industry-leading startups emerging in the coming years, further solidifying its position on the global tech stage. For the complete report and in-depth analyses, it is available here.
In conclusion, the Eastern European region stands at the threshold of a tech revolution, with a particular emphasis on AI and innovative technology. As the startup ecosystem matures, the potential for growth and global impact becomes increasingly apparent, culminating in an exciting time for tech enthusiasts and investors.
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