Alexandru Agatinei, the CEO of the prominent Romanian technology conference How to Web, sees a bright future for the tech startup scene in Central and Eastern Europe. He envisions a landscape where these startups not only flourish but also achieve a global presence and innovation level comparable to that of Nordic companies.
Despite co-authoring a recent report indicating a significant reduction in venture capital investment in 2023 across 19 countries in the region—a 57% decrease from €4.2 billion to just over €1.8 billion—Agatinei remains undeterred. He views this drop as part of a broader European trend and a corrective response to the previously overvalued market of 2021. By comparing the 2023 figures to the €388.3 million invested in 2020, Agatinei finds reasons for optimism rather than concern.
Agatinei’s confidence in the region’s potential to bridge the innovation gap with Western Europe is bolstered by its achievements in fields like artificial intelligence. He points to success stories such as Romania’s UiPath, Croatia’s Rimac Automobili, and Bulgaria’s Payhawk as evidence of the region’s burgeoning tech prowess.
A standout example is Poland’s ElevenLabs, which rapidly achieved a €1 billion valuation, becoming a unicorn. This success story, according to Karol Lasota of the Polish VC firm Inovo.vc, is a landmark event that serves as a source of inspiration across the region. Agatinei believes such achievements will elevate the region’s startup ecosystem to a level of innovation and global reach reminiscent of the Nordic model.
The current investment trend leans towards startups committed to sustainable growth over those seeking quick exits. This shift away from speculative investments and towards companies with solid business fundamentals plays to the strengths of Central and Eastern European startups, known for their cost-effectiveness and focus on steady growth.
Moreover, the region’s lower costs and high talent density are drawing in more venture capitalists, particularly for later-stage investments. Despite the influx of foreign capital, there remains a need for more substantial local investment to support startups’ growth within the international venture capital landscape.
Agatinei acknowledges the challenges, including a reliance on public funding and the relatively small size of local venture capital funds. However, he remains optimistic about the region’s future, citing an increase in success stories, talent, and financing as indicators of a strong and growing momentum for Central and Eastern Europe’s tech startup scene.
