There are over 26,000 startups in the CEE region. Over the past five years, their combined enterprise value has more than doubled, increasing from €89 billion in 2019 to €213 billion in 2023. And that's significantly faster than the growth rate seen in the rest of Europe, as noted by Orla Browne, Head of Insight at Dealroom, during her presentation of a new Dealroom report on the region’s startup ecosystem at the CEE VC Summit.
This time, Vestbee, Uniqa Ventures, and Cogito Capital Partners have teamed up with Dealroom as co-authors to create the report. Below, we highlight its key findings.
The CEE startup ecosystem has grown 2.4 times since 2019
- As of 2023, it is worth €213 billion. The top three countries in terms of enterprise value for startups are Poland, Ukraine, and Estonia, contributing €49 billion, €28 billion, and also €28 billion, respectively, to the total combined value of the CEE region. In the meantime, Croatia, Latvia, and Lithuania exhibited the most significant relative growth in values.
Source: Dealroom
- Almost 47% of CEEʼs ecosystem value comes from the region’s startups which have relocated. The preferred destinations include the UK, the US, and Western Europe, with only a few opting for other countries within the region.
“The startup exodus highlights the need for stronger local support systems, ranging from capital access, especially at later stages, to talent pool acquisition and increased knowledge exchange, as well as broader regulatory frameworks to perceive the CEE region as a stable entrepreneurial landscape, more likely to attract investment without geographic bias,” commented Ewa Chronowska, CEO at Vestbee.
- The CEE region boasts 52 unicorns in the region that are worth €129 billion, which is 60% of the combined enterprise value of the ecosystem.
- Despite decreased funding in 2023 across CEE and the broader European tech scene, the first quarter of 2024 looks promising, the report says, as three CEE startups have achieved unicorn status: Czech Mews, Polish ElevenLabs, and Techland.
CEE companies secured €2.1 billion over 940 rounds in VC investment in 2023
- This amount includes €900 million as early-stage funding and over 1.2 billion invested in Series B across 340 deals. As of the first quarter of 2024, the situation has improved, with startups raising €630.1 million, up from €566.5 million in the same period of 2023.
- Domestic investors are key, especially in the early stages, while 16% of investments in the region involve investors from other CEE countries. Emerging market investors from MENA and Asia have also increased their presence in CEE.
- Since 2023, CEE investors have raised $1.9 billion. Top VC and growth funds include Ukrainian Horizon Capital, Polish OTB Ventures, and Inovo.VC, Lithuanian Practica Capital.
Source: Dealroom
Enterprise software, security, and energy continue to dominate the funding landscape
- In 2023, enterprise software startups secured over €655 million, while SaaS startups raised €1.2 billion across all sectors. The energy sector, formerly niche, now claims a third of VC investment in CEE as of 2023.
- Over the last five years, investment in climate tech and AI has surged in CEE. AI startups garnered 15% of total CEE VC investment during this period, while climate tech raised around 20%. In Q1 2024, AI startups received 45% of CEE VC investment volume, compared to 26% for climate tech startups.
