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08 March 2022·20 min read

Konrad Koncerewicz

Head of VC & Startups, Vestbee

VC Transactions In CEE Report - 2021

In this report, we have included the disclosed VC rounds that have been made public before the publication date, 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. Note that the funding round of Sotio has not been included in the report. 

Sources: Vestbee VC & startup community, startup press releases, web & social media monitoring, Crunchbase, PFR (Polish Development Fund).

In recent years, the CEE region experienced record-breaking growth in venture capital investments and has become a hotspot for VC funds looking to invest in regional fast-growing tech companies. 2021 was no different for the whole VC industry, and the CEE region experienced exceptional growth in venture capital investments. In 2021, CEE startups secured over 1 000 rounds that together exceeded €5.4B in VC funding. The data concerns only disclosed rounds,  so the factual financing scale across all countries in Central & Eastern Europe has been significantly higher. Compared to the previous year, 2020, where startups raised over €2.2B in over 1 200 rounds, the total amount of investments on year to year basis was doubled, and the average round size almost tripled. 

VC investments in CEE in 2021

- Total value of VC funding in CEE: over €5.4B*
- Number of funding rounds: 1019
- The biggest disclosed investment rounds: UiPath - Series F - €623M, Bolt - Series E - €600M, Vinted - Series F - €250M, Rohlik - Series B - €190M, Grammarly - funding round - €174M. 
- Countries with the most funding rounds: Poland - 425, Estonia - 157 rounds, Romania - 93 rounds.
- The most active VC funds: Startup Wise Guys, Black Pearls VC, Czysta 3.VC, SMOK Ventures, LT Capital, Next Road Ventures, Evig Alfa, Tar Heel Capital Pathfinder, Fil Rouge Capital, Early Game Ventures, Superangel, Eleven Ventures
- The most appreciated industries: Artificial Intelligence, Healthcare, Internet Services, E-commerce, Finance, Shared-services, Delivery, Analytics. 

*154 rounds undisclosed in terms of the transaction value

In 2021, the total amount of VC funding in CEE reached over €5.4B, and the number of financial rounds (over 1000 in total) remained relatively stable on a quarterly basis throughout this period. The changes visible in the total amount of investments during quarters resulted from so-called mega-rounds like UiPath’s or Bolt’s. Also noteworthy is that mega-rounds (rounds over €100M) accounted for half of the total financing obtained this year, which signalizes that the CEE ecosystem is growing and maturing what attracts more and more international investors. The appearance of the next unicorns is only a matter of time. 

The volume of VC financing on the CEE market should also be assessed positively in the context of its change compared to 2020, where startups collected slightly more than €2B. Over a double year-over-year increase indicates that the compulsory digitization of many large companies in 2020 has become a kind of springboard for technology startups. 

A second factor influencing a large number of early-stage investments and also higher round sizes is a massive change in the attitude and maturity of founders. For many years running a business with global aspirations had been a challenge, especially for such ecosystems as Poland., i.e., large enough to build a regional business, without the need to think globally from the very beginning. By observing startups that get funded, it is clear that founders have become more ambitious, and resourceful, often creating global companies instead of strictly local ones from the very start.

Regarding the amount of funding, startups from Poland, Estonia, and Romania stood out by raising over €800M, €1.2B, and €780, respectively. But what is essential, the chart reflecting investment amounts started to spread out more evenly. Excluding astonishing amounts of VC investments secured by startups from Estonia, Poland, and Romania, countries like Czechia, Ukraine, Lithuania, and Bulgaria collected relatively similar funding, exposing the potential standing behind those countries and further interesting investments rounds that can expected in the region as the ecosystem develops. 

The majority of the investment rounds in CEE were raised by Polish startups that secured 425 out of 1019 rounds, while among other countries worth distinguishing were Estonia, Romania and Lithuania where startups raised 157, 93, 73 rounds respectively. Those spectacular amounts noted by Polish, Estonian and Lithuanian ecosystems are not really surprising if we take into account the fact that Poland is the biggest ecosystem in CEE. Estonia and Lithuania have great legal conditions to develop startups and a huge startups’ oriented culture & awareness. Romania, on the other hand, is a really hot market that attracts many investors these days. However, it must be mentioned that the majority of funding secured by Romanian startups was achieved thanks to a phenomenal round of Romanian unicorn - UiPath. Speaking of most recognizable rounds, the largest ones (in total) were secured by previously mentioned Romanian UiPath - €623M, Estonian Bolt - €600M, Lithuanian Vinted - €250M, Czech Rohlik - €190M, and Ukrainian Grammarly - €174M. 

Among the most active investors, we can distinguish Estonian Startup Wise Guys & Superangel, Croatian Fil Rouge Capital, Romanian Early Game Ventures, Bulgarian Eleven Ventures and Polish Black Pearls VC, Czysta3.VC, SMOK Ventures, LT Capital, Next Road Ventures, Evig Alfa, and Tar Heel Capital Pathfinder.

Most appreciated investment directions included solutions based on Artificial Intelligence, Internet Services, E-commerce, Finance, Delivery, and Analytics, also the market experienced a much more noticeable tendency of investing in Healthcare startups. Those directions should not come as a surprise as they arise from societal needs (e.g. healthcare, e-commerce) and market potential (e.g. artificial intelligence).

 

“With every year Central and Eastern Europe has been attracting more and more VC funds investing across Europe, notably from Western Europe and the United States.” underlines Ewa Chronowska - Partner at Next Road Ventures and Vestbee Founder. 

"The upcoming years will only strengthen this trend. With its high-skilled engineers, less expensive labor, high concentration of tech companies, combined with a fast-growing startup ecosystem CEE became a key investment destination for international VC funds who are also seeking better valuations and higher returns on investments. This trend continues to be driven by later-stage VCs with a strong interest in hyper-growth markets and companies. However, non-CEE-based funds were also noticeably active at earlier stages and increased their activity in the region, e.g., Ramp with over $10,1M EUR seed round from NFX, Firstminute Capital,  Seedcamp, Mozilla, and followed by $53M series-A round with Balderton Capital as a lead investor.

Looking at the CEE VC landscape, we see more and more cross-border investments resulting in much bigger early-stage funding rounds. It’s no longer a surprise to see startups raising a few million euros in pre-seed or seed rounds. Strengthening the regional VC community further and attracting US investors will allow funds to write bigger checks and regional startups to grow and expand businesses globally faster.

We will also be witnessing growing competition among VC funds for the best deals. Choosing investors that add value to their business and company culture for early-stage founders will become the main focus. We also expect the further rise of alternatives to VC funds, like venture debt for companies at the growth stage and democratized VC via crowd for earlier stages resulting in more options to choose from. 

After the record-breaking year 2021, at its outset, 2022 should be another strong year for early-stage VCs and startups in CEE. However, the impact of the tragic Russian invasion of Ukraine may introduce notable uncertainty to the entire region and global economy, raising a big question mark for the global and regional startup and VC ecosystems. In the aftermath, the amount of capital allocated in regional startups 2022 may slow down compared to historic 2021.”

 

Let’s have a closer look at the quarterly analysis of VC investments.

VC investments in CEE in Q4 2021

- Total value of funding closed  in CEE: over €1.45B*
- Number of funding rounds: 255
- The biggest disclosed investment rounds: Grammarly - funding round - €174M, Docplanner - Series F - €132M (estimation), Gtmhub - Series C - €105M
- Countries with most funding rounds: Poland - 102 rounds, Estonia - 47 rounds, Lithuania - 24 rounds
- The most active VC funds: Startup Wise Guys, X21 Digital, Earlybird Venture Capital, AU21 Capital, Black Pearls VC, Bonitas Ventures, Eleven Ventures, European Bank for Reconstruction and Development, Magnus Capital, Seedcamp, Lighthouse Ventures. 
- The most appreciated industries: Ecommerce, Fintech, Analytics, AI, SaaS, Advertising, Big Data.

*35 rounds undisclosed in terms of the transaction value

In the 4th quarter of 2021, 255 investment rounds were closed in Central and Eastern Europe, while only 163 were fully disclosed in terms of company details, funding amount, date, and participating investors. According to fully disclosed data, 58 funding rounds took place in October, 43 in November, and 62 in December. The number of funding between each month was constantly growing - startups secured over €245, €480, and €590, respectively. Such a situation resulted from the year cycle, as the end of the year closes the given accounting period - that's why many investments are made either at year-end or at its beginning. The overall value of investments in 4Q reached over €1.4B. 

The most active countries in terms of the number of funding rounds in Q4 were Poland, Estonia, and Lithuania, which secured 102, 47, and 24 investments. Poland, as the most extensive VC ecosystem in CEE with many active funds and private investors, reached an astonishing number of investments compared to other countries. However, we may also assume Hungarian outcomes as a pleasant and unpredictable surprise. The biggest funding rounds were secured by startups from Ukraine, Poland, and Bulgaria - Ukrainian Grammarly closed €174M, Polish Docplanner - €132M, Bulgarian Gtmhub - €105M.

Taking a look at sectors, funds were mainly invested into Ecommerce, Fintech, Analytics, AI, SaaS, Advertising and Big Data, while the most active investors in terms of the number of financing rounds were Startup Wise Guys, Earlybird Venture Capital, Black Pearls VC, Eleven Ventures and Seedcamp. 

VC investments in CEE in Q3 2021

- Total value of funding closed  in CEE: over €1.2B*
- Number of funding rounds: 245
- The biggest disclosed investment round: Bolt - Series E - €600M, Eobuwie - Venture round - €110M, People AI - Series D - €87M.
- Countries with the most funding rounds: Poland - 111, Estonia - 37, Romania - 20, Lithuania - 20.
- The most active VC funds: OTB Ventures, TMT Investments, Change Ventures, Movens Capital, Lemonade Stand, Startup Wise Guys, Fil Rouge Capital, Czysta3 VC, Day One Capital, Lighthouse Ventures, LT Capital.
- The most appreciated industries: Ecommerce, Food Delivery, AI, Fintech, Analytics, Cyber Security, Biotechnology.

*37 rounds undisclosed in terms of the transaction value

In the 3rd quarter of 2021, 245 investment rounds were closed in Central and Eastern Europe, while 153 were fully disclosed in terms of company details, funding amount, date and participating investors. According to available data, 56 funding rounds took place in July, 49 in August and 48 in September. The number of financial rounds collected in Q3 was slightly lower than during other periods, possibly resulting from the usual VC market slowdown in the summer months. When it comes to the amount of VC transactions, the biggest funding was recorded in August, where startups secured over €800M, but it is worth mentioning that nearly 75% of that funding was raised by Bolt during its €600M series E round. Consequently, we can assume that the most active was July, with funding reaching over €220M during 56 rounds. Polish and Estonian startups not only raised astonishing amounts of funding but the highest rounds - Estonian Bolt secured previously mentioned €600M series E round, Polish Eobuwie €110M and the third place was taken by Ukrainian People AI with its €87M series D funding. 

Taking a look at sectors, funds were mainly invested into Ecommerce, Food Delivery, AI, Fintech, Analytics, Cyber Security, and Biotechnology,  while the most active investors were OTB Ventures, TMT Investments, Change Ventures, Movens Capital, Lemonade Stand, Startup Wise Guys, Fil Rouge Capital, Czysta3 VC, Day One Capital, Lighthouse Ventures, and LT Capital.

VC investments in CEE in Q2 2021

- Total value of funding closed  in CEE: over €1B*
- Number of funding rounds: 257
- The biggest disclosed investment rounds: Vinted - Series F - €250M, Rohlik - Series C - €120M, Printful - venture round - 113M.
- Countries with most funding rounds: Poland - 118, Estonia - 32, Romania - 24 rounds
- The most active VC funds: Next Road Ventures, Fil Rouge Capital, Smok Ventures, Knowledge Hub, Accel, Early Game Ventures, Lighthouse Ventures.
- The most appreciated industries: Ecommerce, Fintech, Analytics, Cyber Security, Automotive, AI, Big Data, Media. 

*41 rounds undisclosed in terms of the transaction value

In the 2nd quarter of 2021, the total value of investments in Q2 reached around €1B, and 257 investment rounds were closed in Central and Eastern Europe, while only 170 were fully disclosed in terms of company details, funding amount, date, and participating investors. According to fully disclosed data, the number of investments remained similar, with an increase of 17% between the second and third month of Q2 - 54 funding rounds took place in April, 54 in May, and 65 in June. Regarding the amount of funding, in April total VC funding reached over €250M, in May over €480M, and in June over €300M. It is worth mentioning that this higher amount of funding raised in May, is the merit of the large rounds secured by Lithuanian Vinted and Latvian Printify.

The most active countries in terms of the majority of funding rounds in Q2 were Poland, Estonia, and Romania which secured 118, 32 and 24 rounds, respectively. Poland was leading the ecosystem in terms of a number of funding rounds secured. However, Lithuania and the Czech Republic secured the most funding by raising around €280M and €200M, respectively. 

Taking a look at sectors, funds were mainly invested into Ecommerce, Fintech, Analytics, Cyber Security, Automotive, AI, Big Data, Media and the most active investors in terms of the number of financing rounds were Next Road Ventures, Fil Rouge Capital, Smok Ventures, Knowledge Hub, Accel, Early Game Ventures, and Lighthouse Ventures.

VC investments in CEE in Q1 2021

- Total value of funding closed  in CEE: over €1.6B*
- Number of funding rounds: 262
- The biggest disclosed investment rounds: UiPath - Series F - €623M, Rohlik - Series B - €190M, Zego - Series C - €130M.
- Countries with most funding rounds: Poland - 94, Estonia - 41, Romania - 26
- The most active VC funds: Early Game Ventures, 70Ventures, Gapminder VC, Simple Capital, Startup Wise Guys, Netrix Ventures
- The most appreciated industries: Healthcare, Robotics, AI, Advertising, Cleantech, E-commerce, Delivery services, Automotive, Fintech and Security.

*46 rounds undisclosed in terms of the transaction value

In the 1st quarter of 2021, 262 investment rounds were closed in Central and Eastern Europe, among which only 172 were fully disclosed in terms of company details, funding amount, date, and participating investors. According to fully disclosed data, 67 funding rounds took place in January, 55 in February, and 60 in March. It was the most impressive quarter of the year, both regarding the value of transactions and their quantity. The total value of investments reached over €1.6B (over €200M in January, over €770M in February, over €600M in March). However, nearly 40% of the funding secured during the whole quarter, has been collected thanks to an astonishing round of Romanian unicorn - UiPath.

The most active countries in terms of the majority of funding rounds in Q1 were Poland, Estonia and Romania which secured 94, 41 and 26 rounds respectively. While it was Poland who recorded the biggest number of financial rounds, Romania, Czech, Slovakia, Estonia, Ukraine and Croatia were ahead of Poland in terms of the amount of financing secured. The biggest funding rounds were raised by Romanian UiPath - €623M, Czech Rohlik - €190M, and Estonian Zego - €130M.

Taking a look at sectors, funds were mainly invested into Healthcare, Robotics, AI, Advertising, Cleantech, E-commerce, Delivery services, Automotive, Fintech and Security,  and the most active investors when it comes to financing rounds were Early Game Ventures, 70Ventures, Gapminder VC, Simple Capital, Startup Wise Guys, and Netrix Ventures.

Now, after already analysing VC transactions in 2021 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 2022 forecasts. 

  

Wall Of Fame - 
Meet The TOP CEE Funding Rounds Closed In 2021

The year 2021 was very very impressive in terms of the number of investment rounds as well as their amounts. We do appreciate all of them and here we decided to feature 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.

  • UiPath - Romanian UiPath, founded in 2005, is a software company developing robotic process automation and artificial intelligence software. UiPath offers an end-to-end platform for automation, combining the leading Robotic Process Automation (RPA) solution with a full suite of capabilities that enable every organization to rapidly scale digital business operations and unlock the greatest potential. The startup has secured €623M in a Series F round and the obtained financing will be allocated to the further development of the platform. The funding round was joined by Alkeon Capital, Coatue, Altimeter Capital, Dragoneer, IVP, Sequoia, Tiger Global, and funds and accounts advised by T. Rowe Price Associates, Inc.
  • Bolt - Estonia-based, Bolt is a transportation platform providing ride-hailing, micromobility, and food delivery services. The company creates an ecosystem that connects cars and motorcycles renting, scooter sharing, or food delivery from restaurants. Startup has recently raised €600M at €4B+ valuation to increase its reach in the competitive grocery delivery market. The round was led by world-famous Sequoia Capital and accompanied by other well-known investors like D1 Capital Partners, G Squared, Ghisallo Partners, Naya Capital and Tekne Capital.
  • Eobuwie - Poland-based startup operating in the online footwear and accessories market in Central and Eastern Europe. The company creates trends in the industry and implements ambitious projects, among others introducing a breakthrough service esize.me, which, based on a 3D scan, recommends properly fitted shoes. Moreover, it created a concept for the eobuwie.pl stationary store, where customers can try on shoes by choosing them using in-store tablets. The company has recently secured €110.9M from SoftBank Vision Fund in the form of convertible bonds that will be converted into shares before the company IPO.
  • Vinted - Lithuanian startup, founded in 2008, operating an online marketplace intended to make second-hand the first choice. Its platform offers a peer-to-peer marketplace to buy, sell, and swap clothes with an online chatting feature, enabling users to shop with ease at a low cost. The round was led by EQT and was accompanied by Accel, Burda Principal Investments, EQT, Insight Partners, Lightspeed Venture Partners, and Sprints Capital. Recently secured funds will be used to expand the activities.
  • Rohlik - Czech online grocery service that allows customers to order a broad selection of food, beverages and other ingredients. Recently, the company has secured €190M in the March series B round which will be spent on entering markets like Germany and others in Europe. The investment round was led by Partech with participation from EBRD ENERN Investments Index Ventures J&T Finance Group Quadrille Capital R2G among others.
  • Docplanner - Polish operator of a healthcare services booking platform and management software for doctors. Docplanner has completed an undisclosed round at a unicorn valuation (USD 1bn or more). Polish Development Fund estimates the round to €132M.
  • Gtmhub - Bulgarian company focused on helping companies implement OKRs  (Objectives and Key Results) to develop and execute a business plan efficiently. Gtmhub's platform is currently used by Adobe Inc., as well as other notable firms such as Microsoft, Google LLC or Intel. The startup secured a series C round in the amount of €105.6M which was led by Index Ventures with participation from Visionaries Club and returning investors, Insight Partners, Singular and CRV.
  • Rossum - Czech startup, founded in 2017, is an AI-based cloud document gateway for automated business communication that solves four key steps in document-based processes at once: receiving documents across multiple channels, automated understanding, two-way communication to resolve exceptions, and acting on the data using in-depth integrations. Rossum has secured €86M series A round from Seedcamp, Miton, LocalGlobe, and General Catalyst.
  • Rimac Automobili - founded in 2009, Croatia-based Rimac Automobili is a technology powerhouse that manufactures electric hypercars and provides the latest technologies to many automotive manufacturers. Starting as a garage project, the startup has grown into an internationally recognized global company. Rimac secured venture round in the amount of  €70M from Porsche Ventures.
  • Uncapped - Polish-UK Uncapped, founded in 2019, is a provider of revenue-based financing that enables founders to raise growth capital without interest or equity, and therefore access fair and flexible finance. The company raised a Series B round in the amount of €73M round led by Lakestar and accompanied by Global Founders Capital, Seedcamp, Mouro Ventures and All Iron Ventures.
  • Grammarly - founded in 2009, a Ukrainian AI-powered writing assistant that helps users to communicate more clearly and effectively. The startup secured a funding round in the amount of €174M from Baillie Gilford, and BlackRok.
  • Zego - founded in 2016, Estonian startup is a commercial motor insurance provider that powers opportunities for businesses, from entire fleets of vehicles to self-employed drivers and riders. Zego has secured a Series C round in the amount of €130M from Target Global, Latitude, General Catalyst, DST Global, and Balderton.
  • Printiful - founded in 2013, Latvian print-on-demand drop shipping and fulfillment company that helps people turn their ideas into brands and products. The startup secured a €113M funding round from Bregal Sagemount.
  • People AI - founded in 2016, Ukrainian startup helps sales, marketing, and customer success teams uncover every revenue opportunity from every customer, by capturing all customer contacts, activity and engagement to drive actionable insights across all revenue teams. People AI secured a Series D round in the amount of €87M from Akkadian Ventures, Mubadala Capital, ICONIQ Capital and Lightspeed Venture Partners.
  • Hyperscience - founded in 2014, Bulgarian startup that uses machine learning to process structured and semi-structured documents, automate data entry, extract key details from invoices, and reconcile compliance-driven data to enable businesses to increase productivity. The company secured a Series E round in the amount of €87M from Tiger Global Management, Stripes, Global Founders Capital, Gaingels, Flucas Ventures, and Bessemer Venture Partners.

*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 2021. Get to know their interesting solutions closer here.



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