This report encompasses the VC rounds publicly revealed before the end of Q3 2022, as well as those supplied by our VC and startup community. It does not include grants and transactions below €50k. Despite our enthusiasm for all businesses operating in CEE, our report solely focuses on companies originating from CEE, self-identified as CEE companies or with a significant presence of a CEE founder (e.g., Turkey is not included).
Sources: Vestbee VC & startup community, startup press releases, web & social media monitoring, Crunchbase, PFR (Polish Development Fund).
Startup investment rounds in CEE in 3Q 2022
> Number of funding rounds: 264 (197 fully disclosed in terms of amount, month, investors, and company details).
> The biggest disclosed investment round: Cera - Venture Round - €150M (plus €150M in Venture Debt), Unstoppable Domains - Series A - €63M, Fonoa Technologies - Series B - €58M, Ready Player Me - Series B - €55M, Bitlevex - Venture Round - €49M.
>Total value of funding closed in CEE: over €1.3B*
> Countries with the highest number of funding rounds: Poland - 127 rounds, Estonia - 34, Ukraine - 19 rounds,
> The most active VC funds: SATUS Starter, EBRD, EIC, Movens Capital, Presto Ventures, Endeavor, KAYA, LT Capital, Plural VC, Creandum, Eleven Ventures, Inventure, Smok Ventures, Speedup Group
> The most popular industries: Healthcare, Fintech, AI, Blockchain, SaaS, and Energy.
*69 rounds undisclosed in terms of transaction value
Q3 was the first quarter in 2022 showing a notable deviation from the growths seen earlier this year, as the amount of capital deployed last quarter resembled values witnessed at the end of 2020. After a very promising beginning of the year 2022 (where startups secured over 1.6B EUR in 1Q, and over 2B EUR in 2Q), we see a noticeable drop in deal value, which most likely can be attributed to market-wide uncertainty caused by the war in Ukraine, pending energy crisis, raging inflation, and risk of a real recession.
On the other hand, it is important to underline that the overall number of transactions did not decrease. This, together with other data collected by us, indicates that the focus of VCs active in the CEE has predominantly shifted to earlier, smaller rounds. On top of that, the presence of Western investors in the region has also weakened as many of them refocused on their core geos or simply incorporated the wait-and-see approach.
‘‘‘We've seen a significant drop in the YoY deal value in Western Europe regarding VC investments and it seems CEE is starting to catch up with the West. Nevertheless, our region remains relatively strong at the early stage despite facing unprecedented crises, mainly due to the prevalence of public capital, which helps to cushion any rapid decrease in startup funding. The current challenge for the region is growth rounds due to their reliance on private funding from developed ecosystems. This potentially limits the number of companies that can receive support - at least in the short term.
With the next few months coming up, a vast amount of data will be crucial in understanding what awaits us in the future of the Central and Eastern European ecosystem. Macroeconomic factors will play a major role in driving the overall sentiment, influencing startup valuations and ultimately deal velocity across different stages. Furthermore, considering that many local GPs are currently raising their new funds and CEE's significant exposure to venture capital investments backed by public money - many of which are now fully deployed - it is hard to predict how the VC market may take shape in 2023. Keeping a close eye on the data to come will help us better map out realistic scenarios for the year ahead and identify areas of opportunity for startups and investors alike. For the time being, weak projects and mega valuations are no longer a case for investors, as they are now looking for solid and reliable deals at reasonable valuations.’ underlines Ewa Chronowska, CEO at Vestbee and General Partner at Next Road Ventures.
Let’s have a closer look at what shaped the CEE ecosystem in Q3 2022.
In Q3 2022, 264 VC transactions were recorded. While the distribution of deals was rather stable throughout the quarter (75 in July, 54 in August, and 69 in September), their value steadily and gradually decreased (over €480M in July, over €340M in August, and over €300M in September), according to the fully disclosed data. Another noticeable thing is the aforementioned decrease in the average size of transactions – in Q3 we recorded only one mega round, i.e. the Czech-UK Cera - €150M Equity + €150M Debt).
Other biggest rounds disclosed in Q3 were secured by Ukrainian Unstoppable Domains (Series A - €63M), Croatian Fonoa Technologies (Series B round - €58M), Estonian Ready Player Me (Series B - €55M), and Estonian BITLEVEX (Venture round - €49M).
In the third quarter, Poland, Estonia and Ukraine accounted for 127, 34, and 19 funding rounds, respectively. Czech Republic led in terms of the investment volume (over €290M), followed closely by Estonia (over €260M) and Ukraine (over €170M).
The most popular sectors were: Healthcare, Fintech, Artificial Intelligence, Blockchain, SaaS, and Energy.
Among the most active investors were SATUS Starter, EBRD, EIC, Movens Capital, Presto Ventures, Endeavor, KAYA, LT Capital, Plural, Creandum, Eleven Ventures, Inventure, Smok Ventures, and Speedup Group.
Now let's review the Q3 results on a month-by-month basis. The review was based on publically declared venture investments (name of startup, closing date, round’s size, participating investors).
Investment rounds in September
> Number of funding rounds: 69
> The biggest investment rounds: 3Commas - Series B - €37M, Monese - Venture round - €35M, Alcatraz - Series A - €25M
> Total value of funding secured in CEE: over €300M
> Countries with most funding rounds: Poland - 20, Estonia - 16 rounds.
> The most active VC funds: Inventure, SMOK VC, Creandum, and EBRD thanks to a number of investment rounds. Target Global, Alameda Research, and Jump Capital thanks to participating in the biggest investment round this month.
> The most appreciated industries: Fintech, Banking, Crypto, Security, AI
In September, the amount of funding obtained by CEE startups just exeeded €300M and was raised during 69 funding rounds. Poland led with its 20 investment rounds, followed by Estonia, where 16 startups secured funding.
It was also Estonia that stood out in terms of funds raised - startups from this country secured over ⅓ of all VC money raised in the region that month.
Among the most active investors were: Inventure, SMOK VC, Creandum, and EBRD, but Target Global, Alameda Research, and Jump Capital are also worth featuring because of their participation in the largest September’s investment round (Estonian 3Commas).
Find out more: TOP CEE funding rounds closed in September.
Investment rounds in August
> Number of funding rounds: 54
> The biggest investment round: Cera - Venture round - €150M, Ready Player Me - Series B - €56M, BITLEVEX - Venture round - €50M
> Total value of funding secured this in CEE: over €350M
> Countries with most funding rounds: Poland - 18, Estonia - 8 rounds
> The most active VC funds: Kairos HQ, alongside the Vanderbilt University Endowment, Schroders Capital, Jane Street Capital, Yabeo Capital, Squarepoint Capital, Guinness Asset Management, Oltre Impact, and 8090 Partners thanks to participating in the biggest investment round this month.
> The most appreciated industries: Health, Financial Services, AI, Crypto, SaaS.
In August, the value of secured funding reached over €350M raised in 54 rounds. The biggest investments were secured by Czech-UK Cera (Venture round of €150M), Estonian Ready Player Me (Series B of €56M), and Estonian BITLEVEX (Venture round of €50M). Most rounds took place in Poland, Estonia and Ukraine (18, 8 and 7 rounds, respectively). However, it was Czech Republic who led in terms of size of secured funding - Cera secured a venture round of €150M. It is also worth noting that in August over 70% of all funding allocated by VCs that month went to 3 companies: Cera, Ready Player Me and BITLEVEX. Investors’ activity remained at a stable and similar level, but Kairos HQ, alongside the Vanderbilt University Endowment, Schroders Capital, Jane Street Capital, Yabeo Capital, Squarepoint Capital, Guinness Asset Management, Oltre Impact, and 8090 Partners are worth featuring thanks to participating in the biggest investment round. Investors showed the most interest in: HealthTech, Fintech, AI, Crypto, and SaaS.
Find out more: TOP CEE funding rounds closed in August.
Investment rounds in July
> Number of funding rounds: 74
> The biggest investment round: Unstoppable Domains - Series A - €63M, Fonoa Technologies - Series B - €58M, Preply - Series C - €49M.
> Total value of funding secured in CEE: over €480M
> Countries with most funding rounds: Poland - 20, Estonia - 10 rounds.
> The most active VC fund: Presto Ventures, EIC Fund, Movens Capital, LT Capital, Flyer One Ventures thanks to a number of investment rounds. Mayfield Fund, Panter Capital, Boost VC, Draper Associates, and Broodhaven Capital Partners thanks to participating in the biggest investment round this month.
> The most appreciated industries: IT, Fintech, Edtech, AI, Health
In July, 74 startups secured over €480M of fundin, which made July the most active month of Q3 2022. Ecosystems with the most funding rounds were: Poland, and Estonia, with 20, and 10 rounds respectively. When total amount funding secured is concerned Ukraine (over €120M), and Czechia (over €110M) outperformed the resto of the region. The biggest rounds in July were raised by Ukrainian Unstoppable Domains (Series A - €63M), Croatian Fonoa Technologies (Series B - €58M), and Ukrainian Preply (Series C - €49M). VC showed the most interest in: IT, Fintech, Edtech, AI, and HealthTech.
Among investors that are worth distinguishing were Presto Ventures, EIC Fund, Movens Capital, LT Capital, and Flyer One Ventures. Also, Mayfield Fund, Panter Capital, Boost VC, Draper Associates, and Broodhaven Capital Partners are worth mentioning thanks to participating in the biggest investment round this month (Unstoppable Domains).
Find out more: TOP CEE funding rounds closed in July.
Now, let's discover the note-worthy and recently raised VC funds from CEE.
Notable VC funds raised from CEE in 3Q 2022:
- Inovo - one of Poland’s most known VC fund has set up its third €100M fund aimed backing seed stage startups across all verticals.
- Trind Ventures - Estonian €55M fund, targeting startups from Northern and Central Europe, developing B2B and C2C software solutions.
- Contratian Ventures - Lithuanian impact VC fund with a focus on climate tech and clean energy, has launched yet another fund of €100M, with the aim to support seed-stage startups across Europe.
- Underline Ventures - Newly-launched Romanian €20M VC that targets high-growth Eastern European startups with global aspirations.
- Blue & Yellow - $50M fund launched by Polish-American VC ffVC to exclusively invest in Ukrainian founders and startups.
Let’s have a closer look at the Top 50 funding rounds closed in CEE between July and September 2022!
Top 50 CEE startup funding rounds closed in 3Q 2022:
- Cera - a UK-based digital healthcare company, delivering care, nursing, telehealth, and repeat prescriptions home services
- Unstoppable Domains - a Ukrainian startup providing secure NFT domains based in web3
- Fonoa Technologies - Croatian company providing tax automation services for digital businesses
- Ready Player Me - an Estonian cross-game platform developing personalized avatars for metaverse users
- BITLEVEX - Estonian company developing an option-focused BTC derivative trading platform for investors and traders.
- Preply - originating from Ukraine, it’s a global language learning marketplace, providing online language tutoring services
- 3commas - Estonian startup developing industry-leading trading bots for the crypto market
- Monese - an international banking platform offering alternative services to traditional banks, which include multi-currency accounts available to be opened on-the-spot
- Alcatraz AI - a startup based in Bulgaria, developing AI for secure facial authentication
- Lightyear - an innovative, commission-free investment platform, with no high minimums or entry barriers, developed by an Estonian team
- Better Stack - Czech observability company that combines monitoring, logging, and incident management with collaboration tools with the aim to help developers and businesses build more reliable software
- Woltair - a company based in Prague that develops energy-saving heat pumps and photovoltaics technology
- SunRoof - Polish startup that builds an environment-friendly product that is a combination of roof tiles with photovoltaic cells
- Hedera - Croatian company producing organic products from natural sources of herbal and bee origin without chemical processing of raw materials
- Craft - Hungary-based startup developing tools for efficient document building and structuring
- Klaus - Estonian customer service quality management app for running an effective QA process, coaching agents and boosting customer retention
- Autenti - Polish one-click e-signature platform for all types of transactions that became a European standard for e-signature & identification
- Certific - Estonian platform that enables certified remote medical testing at scale
- RedStone - Polish web3 startup that builds two products: cross-chain data Oracles for Web3 & DeFi protocols; and Warp, data-driven Smart Contracts layer on Arweave
- More Growth - Polish company that creates brands and online products that help users take care of their health and personal development
- TurnKey Lender - Ukrainian B2B SaaS company that offers an AI-powered lending automation platform
- Sessions - Romanian platform for your team to host and manage online meetings and webinars that impress
- Oddin.gg - Czech AI-powered automated live esports odds platform
- Koos - Estonian platform for community incentives that provides flexible, equity-like advantages to contributors who are not employees
- Solvo - Lithuanian app that brings the best of crypto without the complexities and the jargon
- The Village Network - Polish SaaS enabled marketplace for individuals who want to set up, license, and operate a childcare business
- Talkie.ai - Polish AI-powered virtual agent, which uses natural language to provide phone customer service 24/7
- DoxyChain - Polish next-generation blockchain document management system (DMS)
- 99math - Estonian startup offering math games to master fact fluency and curriculum standards
- Native Teams - Macedonian provider of payment solutions & Employer of Record services to remote workers, freelancers and their clients
- Healee - Bulgarian startup working on a highly configurable digital health technology for telehealth, digital check-in and patient scheduling.
- RecruitLab - Estonian recruiter-centric marketing and applicant tracking software.
- Oriana International - Hungarian Digital Process Automation on a low-code platform
- Econic One - Bulgarian startup working on electric bicycles
- Choice - Czech SaaS startup providing services for DINE IN experience, take away and own delivery for restaurants
- Deepflare - Polish AI-powered startup that provides AI techniques that vastly improve vaccine effectiveness
- Insly - Polish suite of software solutions that simplify and completely automate all tasks required to run a successful insurance business
- Opvarna - Czech startup transforming the standard of repair services for private label electronics and other segments
- Trusted Twin - Polish developer platform for secure data sharing with multiple partners powered by Digital Twins
- Wimba - Polish startup offering a range of orthopedic 4D printed products for animals, new measurement techniques, and a dedicated app
- Milluu - Romanian digital platform that simplifies the apartment rental experience
- Boomio - Lithuanian startup on a mission to revolutionize the customer loyalty sector with more accessible loyalty programs
- Bitskout - Estonian startup that allows users to create AI plugins that can read emails, extract data from documents, understand images
- CodeAlly - Polish startup that matches young programmers with tech-forward companies
- HotelBuddy - Estonian startup offering a unified solution digitizing hotel guest journeys from check-in to check-out contactless
- Staffly - Polish startup offering psychometric tests to improve recruitment processes
- Electronic KYC - Ukrainian startup providing identity verification and onboarding process for customers
- edrone - Polish startup building an e-commerce CRM with Marketing Automation and Voice Commerce
- ElevenEs - Serbian energy company working on Europe's first and largest full-size LFP battery cell
- Plan Be Eco - Polish startup developing carbon footprint reporting software for companies and organizations
If you have some insights about the report, fell free to drop me a line!
Want to get a more detailed view of the CEE Startup & VC Ecosystem in 3Q 2022?
Discover our monthly, quarterly and yearly reports:
- VC Transactions in CEE in 2021
- VC Transactions in CEE in 1Q 2022
- VC Transactions in CEE in 2Q 2022
- TOP CEE funding rounds closed in September
- TOP CEE funding rounds closed in August
- TOP CEE funding rounds closed in July
- New VC Funds Investing in Europe - 3Q 2022
Sources: Vestbee VC & startup community, startup press releases, web & social media monitoring, Crunchbase, PFR (Polish Development Fund)
