In this report, we have included the disclosed VC rounds that have been made public before the end of the year or provided by our VC & startup community. It does not include grants and transactions below €50k. Additionally, although we’re always happy to see startups operating in CEE, we have decided to focus only on companies that originate from CEE, self-identify as CEE companies or there is a significant presence of the CEE founder.
Sources: Vestbee VC & startup community, startup press releases, web & social media monitoring, Crunchbase, PFR (Polish Development Fund).
COVID-19 was one of the biggest challenges and game-changers in 2020 that hit the global startup and VC scene causing not only shifts in investors, startups and customer behaviour but also leading to the massive global digitalization that brought to startups and VC investors the opportunity to envision upcoming changes.
Also moving startup fundraising, investment process, events and even closing deals online resulted in a memorable year on the CEE startup & VC scene despite its volatility and consecutive lockdowns.
So how have these changes affected 2020 in terms of VC transactions in the CEE region? Let’s move on to the comprehensive overview of investments in Central & Eastern Europe and take closer look at the details.
> Number of funding rounds: 734
> The biggest disclosed investment rounds: Bolt - Series D - €150M, Iceye - Series C - €73M, Brainly - Series D - €66M, Booksy - Venture series - €60M.
> Total value of funding closed in CEE: over €1B*
> Countries with the majority of funding rounds: Poland - 313, Hungary - 110, Estonia - 97 rounds
> The most active VC funds: Hiventures, Fil Rouge Capital, Startup Wise Guys, CB Investment Management, Smok VC, Polish Venture Fund, KnowledgeHub, CZYSTA3.VC, Netrix Ventures, Brave VC
>The most appreciated industries: Artificial Intelligence, Big Data, Analytics, E-commerce, Advertising, Healthcare, Blockchain, Financial Services, Marketplaces, Agriculture.
*101 rounds undisclosed in terms of the transaction value
The COVID-19 outburst caused 2020 to be a volatile year for startups and VC funds. Looking closer at the first months of 2020, both the number and size of investments remained at a similar level in the entire 1st and 2nd quarter. However, the situation changed in the 3rd and 4th quarter after the initial dust was settled and both startups and investors realized that the effects of COVID-19 will stay with us longer and there is a need to adapt all operations to the prevailing conditions.
Despite these specific conditions, myriad startups managed to close investment rounds in 2020 (734 funding rounds exceeding €1B in funding - it is worth noting that the data provided concerns disclosed rounds, and the scale of financing in the entire CEE was undeniably higher). Among the arising opportunities and most appreciated investment directions were solutions based on Artificial Intelligence and related fields like analytics & big data, but we have also noticed the rapidly increasing interest in tele-medicine, remote personal care, medical equipment, home delivery, food processing, remote work, online education and smart cities.
Looking at quarters the value of VC investments in Q1 and Q2 remained at the similar level, while between Q2 and Q3 increased by 56%, and between Q3 and Q4 by the next 120%, reaching an astonishing amount of over €550M. The rise in value was accompanied by an increase in the number of startups that obtained financing - 165 investment rounds in Q1, then 169 in Q2 and 182 in Q3, ending with 218 in Q4.
The biggest investment rounds were secured by Estonian Bolt - €150M, Polish/Finish Iceye - €73M, Polish Brainly - €66M, and Polish Booksy - €60M. The majority of the investment rounds were raised by startups originating from Poland, Hungary and Estonia, that secured 313, 110 and 97 rounds respectively. As strong position of Poland and Estonia is not surprising due to the fact that Poland is the largest ecosystem in CEE with large pool of startups and many active investors (over €430M invested in startups) and Estonia has many interesting startups and great legal and market conditions to develop companies, Hungary may be a great eye-opener. In 2020 Hungarian startups secured more than €50M in 110 funding rounds and this clearly shows that Hungary has also put emphasis on the development of the startup ecosystem, more and more interesting startups are being launched there, and in the coming years we can expect further impressive investments.
Among the most active investors, we can distinguish Hungarian Hiventures, Croatian Fil Rouge Capital, Estonian Startup Wise Guys, Slovakian CB Investment Management, And Polish Smok VC, Polish Venture Fund, KnowledgeHub, CZYSTA3.VC, Netrix Ventures, Brave VC.
Now, let’s take a look at the overview of quarterly analysis of VC investments.
> Number of funding rounds: 218
> The biggest disclosed investment round: Bolt - Series D - €150M, Brainly - Series D - €66M, Booksy - Venture series - €60M.
> Total value of funding closed in CEE: over €550M*
> Countries with the majority of funding rounds: Poland - 100, Hungary - 40, Estonia - 28 rounds
> The most active VC funds: Hiventures, Fil Rouge Capital, Startup Wise Guys
> The most appreciated industries: Analytics, Artificial Intelligence, Banking, E-commerce, Mobility, Education, Beauty.
*97 rounds undisclosed in terms of the transaction value
In the 4th quarter of 2020, 218 investment rounds were closed in Central and Eastern Europe, while only 121 were fully disclosed in terms of company details, funding amount, date, and participating investors. According to fully disclosed data, 35 funding rounds took place in October, 36 in November, and 50 in December. Each subsequent month of the fourth quarter, despite the prevailing pandemic, was getting more and more interesting due to the amount of funds present on the market. In CEE the quarter started with a quite lazy October with total VC funding of over €30M, then went through a more active November with its €90M, to finally end with a really strong December, in which startups secured more than €250M. The total value of investments reached over €550M.
The most active countries in terms of the majority of funding rounds in Q4 were Poland, Hungary and Estonia which secured 100, 40 and 28 rounds respectively. Poland, as the biggest VC ecosystem in CEE, with many active funds and private investors reached an astonishing number of investments compared to other countries, but Hungary's and Estonia’s outcomes we may also assume as a pleasant and unpredictable surprise. The biggest funding rounds were secured by startups from Poland and Estonia. Estonian Bolt closed €150M, Polish Brainly - €66M, Polish Booksy - €60M, while among other popular countries were Croatia, Hungary, and Lithuania.
Taking a look at sectors, in the fourth quarter, funds were mainly invested into Analytics, Artificial Intelligence, Banking, E-commerce, Mobility, Education and Beauty and the most active investors in terms of the number of financing rounds were Hiventures, Fil Rouge Capital and Startup Wise Guys.
Find out more in VC Funding In CEE Report - 4Q 2020
> Number of funding rounds: 182
> The biggest disclosed investment round: Iceye - Series C - €73M, Uncapped - Venture Series - €22M, Veriff - Convertible Note - €13.8M.
> Total value of funding closed in CEE: over €250M*
> Countries with the majority of funding rounds: Poland - 88, Estonia - 25, Hungary - 22
> The most active VC funds: Hiventures, Fil Rouge Capital, CB Investment Management
> The most appreciated industries: Artificial Intelligence, FinTech, Analytics, Advertising, Healthcare.
*81 rounds undisclosed in terms of the transaction value
In the 3rd quarter of 2020, 182 investment rounds were closed in Central and Eastern Europe, while 101 were fully disclosed in terms of company details, funding amount, date and participating investors. According to available data, 32 of funding rounds took place in July, 28 in August and 41 in September. We started the quarter with less active July and August which was related to the holidays and the period of stagnation on the VC market, but we finished with surprising September, in which startups secured more than €120M in 41 funding rounds. The total value of investments (including the value of undisclosed ones) reached over €250M.
The most active countries in terms of the majority of funding rounds in Q3 were Poland, Estonia and Hungary, which secured 88, 25 and 22 rounds respectively. It was the first quarter when the Polish ecosystem became more and more active every day, which led to a much larger number of funding rounds secured there than in other CEE countries. Startups from Poland and Estonia also received the largest fundings: Polish/Finish Iceye - €73M in August, Polish Uncapped - €22M in August, and Estonian Veriff - €13.8M in July, while among other popular countries were Romania, Hungary, and Lithuania.
Taking a look at sectors, in the third quarter funds were mainly invested into Artificial Intelligence, FinTech, Analytics, Advertising and Healthcare and the most active investors were Hiventures, Fil Rouge Capital and CB Investment Management.
Find out more in VC Funding In CEE Report - 3Q 2020
> Number of funding rounds: 169
> The biggest disclosed investment round: Bolt - Convertible Note - €100M, Symmetrical - Seed - €5.6M, EstateGuru - Series A - €5M.
> Total value of funding closed in CEE: over €160M*
> Countries with the majority of funding rounds: Poland - 58, Hungary - 30, Estonia - 17 rounds
> The most active VC funds: Hiventures, Fil Rouge Capital, CB Investment Management
> The most appreciated industries: Artificial Intelligence, E-commerce, Mobility, Real Estate, Analytics, Healthcare.
*57 rounds undisclosed in terms of the transaction value
In the 2nd quarter of 2020, 169 investment rounds were closed in Central and Eastern Europe, while only 112 were fully disclosed in terms of company details, funding amount, date and participating investors. According to fully disclosed data, 37 funding rounds took place in April, 38 in May, and 37 in June. Investments remained similar and low throughout the whole quarter excluding one major Bolt round in February. This was connected to the fact that in Q2 governments introduced restrictions related to the COVID-19 epidemic. In April total VC funding reached over €25M, in May startups secured over €120M, and in June the money seen on the market was as little as €20M. The total value of investments in Q2 reached around €160M.
The most active countries in terms of the majority of funding rounds in Q2 were Poland, Hungary and Estonia which secured 58, 30 and 17 rounds respectively. Despite the onset of the pandemic, Poland has once again demonstrated the strength of its startup ecosystem, but Hungary and Estonia were not very much behind either. The biggest funding rounds were secured by startups from Poland and Estonia. Estonian Bolt closed €100M, Polish Symmetrical - €5.6M and Estonian EstateGuru - €5M, while among other popular countries were Hungary, Czech Republic, Slovakia and Lithuania
Taking a look at sectors, in the fourth quarter, funds were mainly invested into Artificial Intelligence, E-commerce, Mobility, Real Estate, Analytics and Healthcare and the most active investors in terms of the number of financing rounds were Hiventures, Fil Rouge Capital and CB Investment Management.
> Number of funding rounds: 165
> The biggest disclosed investment round: Rendi - Venture Series - €16.8M, Jasper Therapeutics - Series A - €11.8M, Envoy Group - Venture series - €10.9M.
> Total value of funding closed in CEE: over €120M*
> Countries with the majority of funding rounds: Poland - 67, Estonia - 27, Hungary - 18
> The most active VC funds: Startup Wise Guys, Hiventures, Fil Rouge Capital.
> The most appreciated industries: Artificial Intelligence, Biotechnology, Financial Services, Analytics, E-commerce, Cyber Security.
*67 rounds undisclosed in terms of the transaction value
In the 1st quarter of 2020, 165 investment rounds were closed in Central and Eastern Europe, while only 98 were fully disclosed in terms of company details, funding amount, date and participating investors. According to fully disclosed data, 32 funding rounds took place in January, 30 in February, and 36 in March. It was the weakest quarter of the year, both in terms of the value of transactions and their quantity. While the first month of the year was not the worst, we ended the quarter with March, when startups secured just €15M in 36 fully disclosed rounds. The total value of investments reached over €120M.
The most active countries in terms of the majority of funding rounds in Q2 were Poland, Estonia and Hungary which secured 67, 27 and 18 rounds respectively. While Poland recorded the biggest number of financial rounds, this time it did not lead in terms of rounds’ amount. The biggest funding rounds were secured by startups from Hungary, Latvia and Estonia. Hungarian Rendi closed €16.8M, Latvian Jasper Therapeutics - €5.6M, Estonian Envoy Group - €5M, while among other popular countries were Croatia, Hungary, and Lithuania.
Taking a look at sectors, in the fourth quarter, funds were mainly invested into Artificial Intelligence, Biotechnology, Financial Services, Analytics, E-commerce and Cyber Security and the most active investors when it comes to financing rounds were Startup Wise Guys, Hiventures and Fil Rouge Capital.
Now, after already analysing VC transactions in 2020 and how they shaped the whole CEE market, if you are interested in further CEE startup & VC scene development we recommend you to take a look at the VC trends in 2021 forecasts.
The year 2020, despite the prevailing conditions, was very rich in the number of financial rounds and the quality of startups. We do appreciate all of them and here we decided to introduce the most interesting ones. That is why we would like to present a brief overview of selected CEE startups and their innovative solutions that succeed and got funded.
*If you have some insights or feedback regarding our report, drop me a line!
Moreover, we have also prepared a more detailed overview of TOP 100 CEE Startups that closed funding rounds in 2020. Get to know their interesting solutions closer in here.
TOP 100 CEE Startups That Closed Funding Rounds In 2020 (by Konrad Koncerewicz, Community Builder, Vestbee)
VC Funding in CEE Report - 4Q 2020 (by Konrad Koncerewicz, Community Builder, Vestbee)
VC Funding in CEE Report - 3Q 2020 (by Konrad Koncerewicz, Community Builder, Vestbee)
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