Valued at €243 billion as of early 2025, the CEE startup ecosystem has established itself as a vibrant innovation hub. Yet the road to successful exits — critical to the region’s long-term growth — remains complex. The slowdown of global venture capital and regional capital limitations continues to pressure founders and investors alike. Still, the data reveals a market in strategic transition. Stakeholders increasingly turn to secondary share sales, cross-border acquisitions, and consolidation plays to unlock liquidity. According to Dealroom, VC-backed exits peaked in 2024, reaching 76, the highest number in a decade.
Why do successful exits matter so much for the health of the VC ecosystem? How is the current liquidity crunch reshaping investment dynamics in CEE? Experts from leading VC firms — VentureFriends, Siena Secondary Fund, Senovo, Elevator Ventures, and Willgrow — shared their thoughts during Vestbee’s CEE VC Summit.
Liquidity is scarce; the late-stage gap deepens
Exits, whether via M&A, IPOs, or secondaries, are essential: they recycle capital and talent, create success stories, and validate the region’s global investment potential. And this is rather crucial for VCs to plan the exits from day one, stressed Rando Rannus, GP of Siena Secondary Fund, sharing his team approach: “We are looking closely at the cap table, tax structure, and setting reasonable valuation thresholds. The initial valuation shapes the pace and direction of the eventual exit.”
Yet even with careful planning, the market is fickle. While the long-term growth outlook may be encouraging, the current climate remains tough. A significant reduction in venture capital liquidity is being felt globally, and CEE is no exception. “Venture has been hit especially hard — liquidity is virtually non-existent, said Justinas Milasauska from Lithuanian investment firm Willgrow, describing the current state of things.
“We're seeing that the liquidity in the VC secondary market has dramatically decreased. Given that many portfolios, including ours, began deploying in late 2021 or early 2022, they’re still too young to expect meaningful liquidity. In response, we’ve reduced our investment budget and cut ticket sizes, though we’re maintaining exposure across asset classes and geographies,” he shared.
Markus Grundman from Senovo added, “We tell our LPs they're signing up for a decade-long journey, not guaranteed returns in year six or seven. You can't predict the perfect time to exit, and you certainly can't time geopolitical shifts that can turn an overlooked sector into a prime investment.” To get the most out of their investments, investors apply various strategies, and Grundman named diversification and building a portfolio of strong companies as crucial ones. “When you have strong, growing companies, you're not pressured by market whims. The attractive exit times will eventually materialize, but you have the patience and the quality in your portfolio to wait for them," he explained.
This liquidity crunch is deepened by a persistent late-stage funding gap in CEE, where the median round sizes until Series A in CEE follow the European average. Still, a gap is emerging at Series B+, with noticeably smaller rounds in CEE. Both LPs and fund managers feel the ripple effects.
“My budget is dependent on other asset classes, liquidity, and performance,” explained Justinas Milasauskas, stressing how investment flows are interconnected, so that underperformance in one area can limit new venture investments.
Secondaries are on the rise
With traditional exit routes like IPOs becoming more challenging globally, the secondary market, where investors and employees can sell their shares in private companies, is gaining prominence. Unlike early-stage VCs, secondary investors come in later, once the risk has been reduced and the company is already scaling, with the exit visible on the horizon, explained Rando Rannus from Sina Secondary Fund. “Each fund has its thresholds — ours is typically around €10 million in revenue — but these vary widely,” he said.
The secondary market today is the story of two extremes. On one end, you have top-tier companies like Vinted in the CEE region, high-performing startups, attracting strong demand and high valuations. On the other end lies the long tail: earlier-stage, overlooked startups. Many of these are quality assets trading at a discount, but they require careful discovery. “That’s where we focus — finding undervalued opportunities in Central Europe. The broader market narrative is skewed by the high-profile deals, but the reality is far more fragmented,” added Rando.
Accessing liquidity isn’t always easy for VCs. Milasauska noted that buying LP stakes in top venture funds is very competitive because everyone wants a piece of the best funds. Willgrow once tried to buy LP stakes directly in US pre-seed and seed funds to gain co-investment access, but faced too much competition: “There was such dry powder in the market that for a non-specialist like us, it was too difficult to compete effectively,” he said. As a result, the team pivoted and chose to back a manager specializing in acquiring LP stakes instead.
This shift reflects a broader trend in the venture landscape, where access to returns is no longer limited to early backers. Other speakers agreed that value creation from startup to IPO takes time. While original managers once captured this full value, secondary investors now step in to seize gains in the final stages before exit.
What defines successful M&A deals
A wave of consolidation is sweeping through the startup ecosystem, with mergers and acquisitions becoming an increasingly common exit path. This trend is particularly visible in growing economies across CEE, where local champions in sectors like fintech are beginning to acquire smaller regional players to solidify their market position. However, beyond the optimistic press releases, a more nuanced reality of startup M&A emerges.
Check out our in-depth analysis of the global, European, and CEE M&A landscape to know more about key trends shaping dealmaking in 2025.
The most successful transactions are rarely the high-profile mergers of equals, which often risk combining the weaknesses of two struggling entities. Instead, success is found in smaller, strategic acquisitions where an established platform company buys a smaller startup to integrate a specific feature or technology. The key to these successful deals lies in rigorous due diligence that goes beyond the balance sheet.
“The most important lesson we’ve learned is that deals should align with both past investment rounds and future acquisition expectations. Sticking to industry standards — on valuation, liquidation preferences, or deal terms — makes a company far more exit-ready. Significant deviations often signal misaligned interests and become red flags down the line,” commented Markus Grundman, Senovo’s Partner.
Sectors with high exit potential
The current geopolitical climate is undeniably reshaping investment theses and potential exit routes — particularly in sectors like defence tech, resilience tech, and space tech, where perceptions have shifted dramatically, as Grundman noted. Once considered a definite “hell no” for many VCs, these areas might now offer some of the most promising exit opportunities for companies already active in the space.
While maintaining a cautiously optimistic outlook, investors believe the CEE ecosystem shows clear potential for successful exits. This is driven by its deep talent pool and growing global recognition in technological innovation, despite the more complex landscape compared to previous years.
