Despite this cooling, Europe’s ecosystem has added extraordinary value over the past decade. The continent’s tech economy is now worth around $4 trillion, up from less than $1 trillion ten years ago — an indication of just how quickly innovation has become a central economic engine.

Optimism is climbing back as well: half of all respondents in Atomico’s 2025 survey say they feel more optimistic about European tech than a year ago, the highest level in years. Yet, that also means half remain unsure, reflecting persistent concerns about regulatory friction, capital scarcity at scale, and whether Europe can compete in the AI age.

One of the defining features of 2025 is the resurgence of company creation. Over 27,000 founders started companies this year — the highest number ever recorded in Europe and nearly 60% more than in 2023. Europe still contributes the largest share of global founders, although Asia has now caught up, driven by surges in India and the UAE. At the same time, more than four in five European founders continue to build on home soil, a sign that the continent’s talent engine remains strong. However, among experienced “seasoned founders,” incorporation in the US is rising — a trend tied directly to easier company formation and greater access to growth capital overseas.

In terms of unicorn creation, Europe adds 28 new unicorns in 2025, a more stable output than the explosive wave of 2021 but a sign that entrepreneurial ambition remains strong even in tougher markets. The challenge, however, is not in starting companies — it is scaling them. More than 30% of repeat founders now choose to establish headquarters outside Europe by Series C, citing fragmented regulation, restrictive labour rules, and shallow late-stage capital markets.

Deep tech has emerged as the continent’s strongest driver of investment. In 2025, 36% of all VC dollars went into deep tech — nearly double the share from four years ago. While the US continues to dwarf Europe in absolute numbers, Europe is growing an increasingly diversified deep-tech base across AI, quantum, defence, climate, and advanced infrastructure. Significant raises from Helsing, Isomorphic Labs, and European aerospace and fusion ventures reflect an ecosystem gaining technical depth and strategic importance.

Still, Europe’s capital markets continue to be a structural bottleneck. Pension funds — one of the world’s largest sources of patient capital — allocate just 0.009% of assets to venture, compared with 0.028% in the US. Matching US allocation levels would unlock an estimated $210 billion in additional European venture funding over the next decade.

This underinvestment contributes directly to Europe’s slow scaling cycle, where promising companies often look abroad for the depth of capital required to reach global dominance.

A notable detail in this year’s report is Croatia’s continued presence among Europe’s emerging tech investment hubs. While total investment levels in many smaller ecosystems declined in 2025, Croatia remains on the map of the continent’s top 30 countries by capital invested. Atomico’s data shows Croatia maintaining measurable venture activity within the $0–$200 million band, positioning it alongside regional peers in Central and Eastern Europe whose funding trends have softened amid broader macroeconomic pressures.

Although Croatia is not among the fastest-growing ecosystems this year, its consistent appearance in the rankings underscores its ongoing relevance as a developing technology market — one with room to accelerate in future cycles as regional founders, talent, and capital networks deepen.

On the policy side, regulatory complexity remains one of Europe’s thorniest challenges. Seventy percent of founders describe the continent’s regulatory environment as restrictive, pointing particularly to market fragmentation, taxation, labour rules, and slow-moving public procurement. The European Commission has proposed ambitious reforms for 2026 — including a 28th Regime for startups, the European Innovation Act, and a unified policy “launchpad” — but founders remain cautious, noting that implementation will determine whether these changes meaningfully reduce friction.

Public procurement remains one of Europe’s most underutilised levers. Only 9% of European public-sector procurement goes toward innovative solutions — far below the EU’s own 20% target. Studies cited in the report show that a one-percentage-point increase in innovation procurement can boost GDP per capita by as much as €6,000, and a five-point increase could potentially double it. Yet structural barriers and long procurement cycles continue to limit adoption of emerging European technologies.

Whether Europe can lead globally in AI and deep tech is one of the defining questions of the decade. Survey responses reveal a continent evenly split: 35% believe Europe can define its technological future, 36% do not, and 29% remain undecided. Optimism correlates strongly with belief in Europe’s AI leadership, suggesting that success in AI will shape broader perceptions of the continent’s strategic trajectory.

Atomico closes its report with a call for coordinated, founder-first reform across four missions: Fix the Friction, Empower Talent, Fund the Future, and Champion Risk. Together, these aim to build a unified, scalable, competitive European tech economy capable of producing not just hundreds of startups, but dozens of global champions. Europe now stands at a turning point — and whether it can convert talent and innovation into long-term global leadership will define the story of European tech in the years to come.

The post Europe at a Crossroads: Insights From Atomico’s State of European Tech 2025 appeared first on CVCA.

One of the defining characteristics of the 2025 cohort is the strength of proprietary technology. To qualify for the Fast 50 ranking, companies must derive the majority of their revenue from their own IP—a requirement that reveals how well they understand the market and how effectively they are responding to emerging customer needs. Deloitte’s Programme Leader highlights that these are not simply “great technology businesses, but great businesses full stop”—enterprises capable of anticipating demand before the market recognises it.

The 2025 ranking is led by Czech-based Oddin.gg, which secured first place for the second year in a row. With a staggering 4,267% revenue growth, the company continues its mission to elevate esports engagement and provide sportsbook operators with advanced, risk-reducing solutions. Its expansion into Latin America, coupled with its commitment to integrity and responsibility, solidifies its positioning as a global leader in esports infrastructure. In second place, Slovakia’s PowereX posted an impressive 2,510% growth, leveraging AI-driven systems to optimise energy flexibility and accelerate the decarbonisation of Europe’s energy infrastructure. Polish SaaS company Mizzox, growing 2,504%, completes the top three with its AI-powered accounting automation tools designed for the era of mandatory e-invoicing. These top performers highlight not only technological sophistication but also the increasing maturity of Central Europe’s tech ecosystem.

Across the full ranking, software continues to dominate with 31 entrants, followed by fintech and media/entertainment. The industry distribution underscores a broader trend: the convergence of AI, automation, and data-driven decision-making in nearly every vertical. Companies such as FaceUp Technology, Surveily, and Antigro Designer demonstrate how AI and machine learning are no longer optional upgrades but essential engines driving competitive advantage and operational efficiency. The geographic distribution is equally telling, with the Czech Republic and Poland emerging as the strongest performers, yet with noteworthy contributions from smaller markets such as Croatia, Latvia, and Estonia.

This year’s report also places a spotlight on the Companies to Watch—ten rising stars under four years old that are already defining the future of Central Europe’s tech scene. Lithuanian winner UAB Pulsetto stands out with a remarkable 5,354% growth, offering a wearable device designed to manage stress and sleep by stimulating the vagus nerve. Slovak AI-powered accounting solution Doklado follows in second place, and Poland’s bards.ai, which bridges academic AI research with real-world commercial applications, secures the third position. These companies illustrate the region’s strong commitment to R&D investment, proprietary tech development, and long-term innovation.

Adding another dimension to the 2025 landscape, Deloitte and Google Cloud introduced the inaugural AI Value Driver – CE Rocketship Innovations in GenAI Award, reflecting the fast-growing importance of generative AI in creating real-world value. The first-ever winner, Poland’s Surveily, transforms standard CCTV systems into smart safety-monitoring platforms using advanced computer vision—an innovation aimed at reducing workplace accidents worldwide. Runners-up such as bards.ai, PowereX, Flowpay, and Fluentbe demonstrate the breadth of GenAI’s application, from funding automation to scalable clean-energy solutions. As Google Cloud emphasizes, the rise of these companies signals a new generation of entrepreneurs who prioritise both commercial value and social impact.

A particularly meaningful part of the report is the Impact Stars category, which recognises companies that combine strong commercial products with positive social or environmental contributions. In 2025, 21 companies across fintech, cyber, ESG, defence, and MedTech/BioTech earned this designation. These businesses prove that technology can simultaneously address market needs and contribute to broader societal challenges, from sustainability to public health. As Deloitte’s CE Impact Leader notes, these Impact Stars showcase how young companies increasingly integrate purpose directly into their operating philosophy.

Croatia’s Growing Presence in the Central European Tech Landscape

The 2025 report reveals a notable rise of Croatia within the regional tech ecosystem, marking the country as a growing hub of innovation and high-growth companies. Croatia contributes six companies to the Fast 50 and additional representation in the Companies to Watch and Impact Stars categories—an impressive result for one of the smaller markets in Central Europe. Among the Fast 50, Croatia’s Margins (1,660% growth) and Cactus Code (1,650% growth) stand out as top-performing software firms, while hardware innovator Orqa posts 1,182% growth and further appears in the Impact Stars category for its contributions to defence technology. Other Croatian companies such as Spectral Core, Farseer, B.I.D. Grupa, and Utiliter reinforce Croatia’s position as a growing regional contender. On top of that, Croatian startup Cyber64 secures its place among the Companies to Watch, and three Croatian companies—Aircash, CircuitMess, and Devot Solutions—achieve Impact Star recognition for fintech, ESG, and MedTech/BioTech innovation. Collectively, this strong presence highlights Croatia’s accelerating shift from an emerging market to a significant contributor to Central Europe’s technology future.

Looking ahead, the report suggests that Central Europe’s technology ecosystem is poised for continued evolution. With AI adoption deepening across industries, regulatory environments shifting, and competition accelerating, the companies featured in the 2025 Fast 50 demonstrate that the region’s entrepreneurial spirit remains strong. Even amid global uncertainty, innovation, resilience, and bold ambition continue to define Central Europe’s tech sector. As more companies harness proprietary technology and expand globally, the region’s influence in the broader innovation landscape will only continue to grow.

Seeing how this momentum shapes 2026 and beyond will undoubtedly be fascinating.

The post Central Europe’s Tech Momentum in 2025: Resilience, Acceleration, and the Rise of Regional Innovators appeared first on CVCA.

Overall investment levels in CEE have continued to grow steadily, yet late-stage capital remains comparatively scarce. Dealroom underscores that while enterprise value and VC activity in the region have expanded over the last decade, on a per-capita basis CEE still remains significantly undertapped, particularly with regard to scaleup and capital-intensive deep-tech development

Late-stage funding challenges have slowed some of the growth witnessed in earlier years, mirroring broader European trends, where public-market corrections since 2022 have reset valuations and reduced the pace of unicorn creation.

Nevertheless, the resilience of CEE’s technology sector stands out. The ecosystem today reaches a combined value of €243 billion, a figure shaped by a diverse mix of enterprise software companies, hardware innovators, and growing verticals across energy, transportation, and fintech

CEE has grown faster than the European average over the past decade, supported by strong technical talent pools and a new generation of globally ambitious founders.

The report notes that more than 300 VC-backed exits have taken place in the region since 2023, with 2024 marking a record year for exit activity

This strengthening exit market signals increasing maturity, even in the face of uneven funding availability. At the same time, a significant proportion of CEE scaleups—nearly half—move their headquarters abroad as they scale, predominantly to the United States or the United Kingdom, seeking easier access to growth capital and global customers. Despite this relocation trend, most companies retain their core R&D and operational hubs within their home countries, continuing to feed economic value and expertise back into the region

In terms of industry trends, enterprise software remains the dominant segment, particularly through SaaS models that have historically enabled the region’s success due to their capital efficiency and relative ease of bootstrapping. Notably, hardware investments have increased sharply over the last three years, driven largely by transportation and energy technologies, which together raised over €2 billion since 2020

The rising geopolitical focus on defense technology has also catalyzed an emerging cluster of more than 100 defense and dual-use startups across the region—many actively contributing to Ukraine’s defense and reconstruction efforts

Gender disparity continues to be an ongoing challenge as in the broader European ecosystem. While the report does not focus explicitly on gender statistics, it mirrors wider European patterns in which women-led teams remain significantly underfunded.

Despite uncertainties, founder sentiment remains optimistic. The region has consistently produced high-performing companies that graduate to global scale, with CEE’s graduation rates from Series B onward now rivalling those of much more mature ecosystems such as the Nordics

With nearly 300 first-time funded startups per year, the region continues to replenish its innovation pipeline and expand its sectoral depth

Croatia: A Rising CEE Innovator Building on Global Success

Croatia emerges in the report as one of the notable contributors to the CEE technology landscape, continuing its trajectory from earlier years marked by landmark successes such as Infobip’s rise to unicorn status. Infobip remains one of the standout examples of a CEE-born company that has scaled globally while maintaining a strong operational base in the region, illustrating the dual-presence model common among CEE scaleups

The Dealroom report also includes Croatian-founded companies among the region’s notable exits since 2023, such as Photomath, acquired by Google, and Amodo, a telematics and insurtech company featured among CEE exit activity cohorts

These exits highlight Croatia’s ability to nurture globally relevant consumer and enterprise technology products.

Additionally, Croatia is fully integrated within the CEE ecosystem framework used by the report, alongside leading regional hubs such as Estonia, Poland, and Lithuania

The country’s presence among the scaleups and exit pipelines demonstrates continuing upward mobility for its ecosystem.

Croatia’s strength lies in several attributes: high-quality technical talent, strong engineering universities, and a growing presence of regionally active investors such as Fil Rouge Capital, one of the prominent local VC players listed in the report’s investor landscape

Coupled with the momentum from globally recognized companies like Infobip and Photomath, Croatia continues to solidify its position as a rising innovation node within CEE.

Conclusion: Steady Growth, Rising Maturity, and a Region Poised for Global Impact

As Europe enters a new period shaped by capital tightening, geopolitical pressure, and accelerated technological change, CEE remains a region defined by resilience and potential. Dealroom’s 2025 analysis captures a tech ecosystem that continues to expand despite challenges—growing in enterprise value, deepening its sectoral expertise, and steadily increasing its global footprint.

With more scaleups moving abroad for capital but keeping their core operations at home, the region’s role in global technology creation is likely to expand further. Croatia, with its mix of unicorn-level scale, successful exits, and expanding investor base, is increasingly becoming part of this broader narrative of regional ambition and global integration.

The coming years will test the adaptability of CEE ecosystems, but the foundations laid over the past decade—strong technical talent, capital efficiency, and an emerging track record of global success—position the region to continue outperforming expectations.

The post A Shifting Landscape: CEE Tech in 2024–2025 as the Region Enters Its Next Chapter appeared first on CVCA.

According to the report, total private equity and venture capital investment in Croatia reached approximately €60 million in 2024, compared with around €27 million in 2023. Over the same period, the number of Croatian companies receiving investment increased from 10 to 19, indicating a broader base of companies accessing professional capital and expertise. These investments span venture capital, growth capital and buyout transactions, with larger buyout and later-stage deals accounting for a significant share of the overall amount.

Even with this welcome growth, Croatia’s private equity and venture capital activity remains modest relative to the size of its economy. In 2024, investment in Croatia represented just 0.073% of GDP, compared with 0.112% for the CEE region as a whole and 0.551% for Europe overall. This gap underlines both the current under-penetration of the asset class in Croatia and the substantial upside potential for future deployment of private capital into Croatian companies.

However, as CVCA we must emphasise that the Croatian statistics in this edition – as in previous years – understate the true level of activity. Not all fund managers and institutional investors active in Croatia report their transactions into the European Data Cooperative (EDC), despite sustained efforts by CVCA, as the national data contributor, to make such reporting a de-facto requirement for our members. At present, participation remains voluntary, and in a relatively small and niche market like Croatia, even a handful of non-reporting managers or deals can materially distort the picture.

In addition, the methodology applied in the report does not allow certain types of investors to be classified as “private equity and venture capital”, even when they are leading transactions that are clearly comparable in size, structure and governance to classic VC or growth rounds. A prominent example is the €100 million Series A round for Verne in 2024, led by a sovereign wealth fund. Because the lead investor is not categorised as a private equity or venture capital fund under the EDC definitions, this landmark transaction is not captured in the Croatian private equity and venture capital statistics at all. The same issue can arise for some corporate investors and other strategic capital providers who are increasingly important in our ecosystem.

For policymakers, regulators, and international limited partners looking at the CEE region, it is therefore essential to read the Croatian numbers as a conservative baseline, not a complete representation of market activity. The underlying reality is that Croatia is seeing more capital, more sophisticated investors and more ambitious founders than the official figures alone would suggest. To support better-informed decision-making – including future EU-level and national policy initiatives – CVCA will continue to work closely with Invest Europe and with all fund managers investing in Croatia to improve coverage, standardise reporting and encourage all relevant investors to submit their data to the EDC on a regular basis.

As CVCA, we remain committed to raising transparency, deepening the pool of professional capital, and ensuring that Croatia’s actual performance and potential are fully visible in future editions of the CEE statistics. We invite all managers, co-investors and ecosystem stakeholders active in Croatia to join us in this effort so that the data used by European and global decision-makers truly reflects the dynamism and opportunities of the Croatian market.”

The post Croatia’s Investment Rebound in 2024: Strong Momentum, Conservative Statistics, and Untapped Potential appeared first on CVCA.

Atomico’s report found that despite several setbacks, Europe’s total tech ecosystem value has added over $2 trillion dollars in value since 2015, increasing at a remarkable 26% compound annual growth rate (CAGR) over that period. The report projects that European tech investment will be around $85 billion which, compared to 2020, represents a greater than twofold increase in total capital invested. European tech companies across the public and private markets have marked around $400 billions of value erased since the start of 2022. As a result, the total ecosystem value has fallen to $2.7 trillion from its $3.1 trillion peak in late 2021.

Concerning unicorns, 2022 unsurprisingly looks very different from 2021, with ‘only’ 31 new unicorns birthed in Europe (at the time of Atomico’s publication deadline). This is a steep decline in the number of unicorns created in 2021, which was truly exceptional in creating 105 new unicorns. Europe has to-date created total of 352 unicorns. However, some of the unicorns were de-horned, or subsequent to reaching the unicorn status of company valuation exceeding a billion dollars, the valuation dropped below the mark. In 2022, 45 companies lost their unicorn valuation. Not a surprise given the loss in value of 35-40% of the technology stocks in the public markets.

Europe’s fastest-growing region in terms of venture capital investment is CEE, which has grown at a compounded level (CAGR) of 44% since 2018. Another notable feature of CEE is that the region is the leanest and the swiftest in unicorn creation. For investors, valuation-to-investment ratio for CEE is 7x, compared to European average of 4x. One of the possible explanations is that 22% of CEE unicorns are bootstrapped (or self-financed) before they reach the unicorn status (for example, Croatian Infobip was bootstrapped prior to receiving first VC round that made the company first official Croatian unicorn in July 2020).

Despite investment in Europe as a whole declining in 2022 compared to last year, many individual countries have seen capital investment grow year-on-year, despite the macro headwinds. Amongst the biggest ‘risers’ is Croatia, driven by the large rounds of Rimac. In June 2022, Rimac officially became the Croatian second unicorn following a € 500 million round led by Softbank Technology Vison Fund II and Goldman Sachs Asset Management.

Croatia and Estonia are only two countries that managed to attract overall venture capital investments above 1% of GDP in Europe. Croatia’s capital Zagreb also made it to the list of Top 20 European hubs by venture capital invested for the first time by attracting an estimated $ 758 million investments in 2022. Estonia is a true global champion in attracting 3,6% of GDP as venture capital investments in 2022. Besides, Estonia is a true startup nation with over a thousand starutps per thousand inhabitants. Croatia is lagging behind with only 105 startups per thousand inhabitants, below the European average of 269 startups per thousand inhabitants.

Overall, much progress has not yet been made in the gender disparity in European tech. Proof of this is the fact that women founders’ share of investment has remained somewhat stagnant. Atomico states that men-only founding teams still raise 87% of all VC funding in Europe, while the proportion of funding raised by women-only teams has dropped from 3% to 1% since 2018.

Despite the many challenges both, occurred and ahead, the resilience of the European tech ecosystem and its ability to ‘weather the storm’ can evidently be seen in the strong and continued sense of optimism in the future of European technology. Atomico created and conducted a survey to dive deeper into what lies ahead for the European tech ecosystem in 2023. A topic explored by the survey was the question of what the perceived greatest challenges of the upcoming 12 months for the European tech ecosystem are. Unsurprisingly the top two challenges uncovered by the survey respondents were accessing venture capital, highlighted by founder respondents. The second most mentioned concern was with the challenges posed by the macroeconomic environment and geopolitical instability. Regardless of the presented hardships, 77% of survey respondents describe themselves as either more optimistic for the future or said to retain the level of optimism they had 12 months ago. The importance of tech is evident, and to put it into perspective it is interesting to mention that Atomico found that the tech economy, at a regional level, already contributes more than 6% of the Gross Value Added (‘GVA’) which is equivalent to almost $800 billion. This is more than the European insurance and finance industries combined. On a global basis, Europe accounts for 51% of all investments that go into early-stage tech companies, and this is especially stunning as Europe’s total global investment share is only 23%. Seeing what 2023 has in store will be very interesting indeed.

The post Atomico State of European Tech 2022 appeared first on CVCA.

The Deloitte Technology Fast 50 in Central Europe is a program that ranks innovative, high-growth, and young companies in this part of Europe. The program, which is now in its 23rd year, ranks among the 50 fastest-growing public or private technology companies. Companies must have base-year operating revenues of €50,000 in 2018, 2019, and 2020 and a current-year operating revenue (2021) of at least €100,000.

Fifteen Croatian companies have been included in the list – eight of them in the main category, four in the ‘Companies to Watch’ category, and three in the ‘Impact Stars’ category.

Aircash the first Croatian fintech to launch its own mobile wallet achieved the best placement with a growth of 5998 % and 4th place. Aircash is the first Croatian fintech to launch its own mobile wallet. So far, mobile applications (apps) allow you to replace your physical wallet with your mobile phone. Aircash is not a bank but a new type of financial institution. The Croatian National Bank (CNB/HNB) has now also granted it a full EU license for electronic money.

DEVOT SOLUTIONS, a software development company, was placed 19th with a growth of 1545 %. The story of Devōt started with a few people who worked together long before the idea of Devōt. Sharing the same approach and values, the core team grew organically, evolving into a successful software company.

Netgen was ranked 28th with a growth of 1113 %. Netgen is now firmly established in the implementation of web and digital solutions that are developed relying on modern methodologies and open-source technologies. Netgen’s services include research, user experience (UX) evaluation, full-scale design, technical implementation, expert consultancy and continuous growth support of digital products.

Uprise was placed 35th  with a growth of 939 %. The core of Uprise activities is software engineering, mostly for the energy and fintech sectors. The company’s agile crew with great team dynamics and tackles both B2B and B2C projects equally well. The successful startup has clients all across Europe.

CircuitMess was ranked 40th with a growth of 790 %. This particularly interesting startup is probably the first company in Croatia and the wider region to receive a global license that allows them to market their products worldwide as they received a global license from the American entertainment giant Warner Bros for their product; STEM toy Batmobile.

Amplifico (Parklio), a startup introducing the future of parking, ranked 41st with a growth of 1076 %. This startup helps make parking secure and connected, with a single click customers can control their parking place, share it with others, and more.

ASYNC LABS, a full-service digital agency, was ranked 42nd with a growth of 747%. A startup with a passion for providing high-level innovative IT solutions.

Cinnamon was ranked 46th with a growth of 649 %. Cinnamon was founded in 2014 by three college friends with a shared vision of making life better for people, companies, and communities. Bringing together expertise in entrepreneurship, technology, and design, our Head of Design, Mateja Bartolović, CEO Ivan Kovač, and Managing Partner Mladen Šimić set about building an agency that empowers clients through digital solutions.

Another category in which 4 Croatian startups were included is the ‘Companies to Watch’ category.

Firefly was ranked 7th in the ‘Companies to Watch’ category with a growth of 1227 %.

Identity Consortium was ranked 12th in the ‘Companies to Watch’ category with a growth of 838 %.

Brightdock was ranked 20th in the ‘Companies to Watch’ category with a growth of 319 %.

Hivetech was ranked 22nd in the ‘Companies to Watch’ category with a growth of 292 %.

Additionally, three Croatian companies were mentioned in the ‘Impact Stars’ category and they are as follows: Notch, Robotiq.ai, and AXILIS.

The post Deloitte Technology Fast 50 in Central Europe 2022 appeared first on CVCA.

Dealroom’s report focusing on the South East Europe (SEE) region states that SEE is one of the fastest-growing ecosystems in Europe, and has grown significantly faster compared to the broader CEE region. VC funding in SEE reached an all-time high of over $1.3 billion in SEE-based startup VC funding. Both publications provide an overview of the CEE/SEE ecosystem and how uncertain times have affected it. The reports explored CEE/SEE startups, their funding and value creation. The reports include mentions of current and future projected blockbusters as well as prominent rising stars. The CEE report included a deep dive into the emerging sectors of business software, games and web 3, and a segment dedicated to Ukraine. The SEE report included a special feature dedicated to Bulgaria.

The startup and scaleup ecosystem in the CEE region has changed dramatically since the first venture capital investors appeared in the region in the early 1990s. Today, the combined enterprise value of SEE startups is four times higher than five years ago, and now in 2022 it amounts to  € 190 billion. In this report, countries considered to be part of CEE include: Estonia, Lithuania, Latvia, Poland, Czech Republic, Hungary, Slovakia, Croatia, Romania, Serbia, Bulgaria, Montenegro, Slovenia, North Macedonia, Bosnia and Herzegovina, Albania, Kosovo, Moldova, Ukraine, Belarus. Of the listed countries, Croatia, Lithuania and Ukraine had the highest combined growth in the value of companies in the startup and scaleup ecosystem. Croatia took second place in terms of growth. With more than 44 unicorns in 2022, the number of unicorns has more than doubled since December 2020, making 2021 and 2022 the strongest years for unicorn creation in CEE. A particularly successful unicorn founded in Croatia, Rimac Automobili, with a total funding of € 880 million, became a unicorn in 2022 and was valued at more than € 2 billion. Infobip is also a Croatian unicorn, and a few success stories coming out of Croatia include: Nanobit, Fonoa and Cognism. Croatian scaleup rising stars valued at less than € 200 million include Aircash, Gideon, Photomath and Microblink.

For easier access to capital, many startups decide to move their formal headquarters outside the region (CEE). Statistics show that this is done by as many as 17% of startups and scaleups that have raised more than € 1 million more in venture capital funding. Some of the most popular moving destinations were found to be London and the US East and West coasts. The aforementioned Croatian unicorn Infobip has moved its headquarters to Great Britain. It is important to note that regardless of the startups that formally move their headquarters, the development team and most employees remain in the region. Croatia has one of the lowest relocation rates of headquarters outside the country’s borders. Dealroom estimates the combined value of Croatian startups and scaleups to exceed € 5 billion, of which about one-third of the value is represented by companies whose headquarters are formally outside Croatia. Still, the development team and most employees remain in Croatia.

The CEE startup scene is known for its resilience. With 23% of CEE startups funded by venture capital, SEE startups are shown to receive VC funding at the same rate as the rest of Europe. After VC funding, CEE startups develop from Seed to Series A at almost the same speed as startups in the rest of Europe.

Interestingly, bootstrapping (or self-financing) is essential in late-stage startup successes coming from the CEE region. Almost a quarter of the unicorns founded in CEE raised their first external financing through a venture capital round, which earned them unicorn status. This also applies to Croatian Infobip, bootstrapped before the first round of financing, with which it acquired unicorn status in July 2020.

Venture capital activity in the CEE region exceeded all years prior to 2021, and at the current rate, 2022 will match last year’s levels. Four countries stand out with the most collected venture capital, and more than 70% of the total venture capital investments in 2022 were invested in these countries, with Estonia in first place with € 1.4 billion, the Czech Republic in second place, Croatia third place with  € 865 million, and fourth in Poland. CEE has so far shown remarkable resilience until 2022. The average funding per startup, which is decreasing globally, is currently increasing in SEE to € 260 thousand. Finally, the report found that the estimated value of startups and scaleups in the Enterprise Software sector in SEE has a combined valuation of $14.8 billion, which exceeds Fintech, Transport and e-commerce combined.

SEE is one of the fastest-growing ecosystems in Europe, as SEE startups have grown 49.9x since 2012 in combined enterprise value. This growth is significantly faster than CEE startups, which grew 9.1x and surpassed the European average of 12.1x since 2012. In terms of sectors, Enterprise Software, Fintech and Transport are the leading sectors in CEE, with these three industries generating more than $24 billion in enterprise value. VC funding in the region is at an all-time high, with the report reporting combined VC funding of SEE-based startups to reach more than $ 1.3 billion in 2022 and VC funding growing 5.9x since 2017.

Unfortunately, access to venture capital funding is very uneven across the SEE region. Similar to the broader CEE region, SEE is known for bootstrapping and traditionally less engaged investors. Recently, entrepreneurs have started to seek VC support more often than before, and investors, both domestic and foreign, have also begun to show more interest in SEE startups than ever before. The report states that Croatian and Bulgarian startups are up to three times more likely to be VC-backed than startups in Albania, Montenegro and Kosovo. On the plus side, SEE-based startups attracted more funding than in 2019, 2020 and 2021 combined. For example, Rimac, a Croatian unicorn, received € 500 million in the Series D financing round in June 2022.

The post Dealroom Reports for CEE and SEE Startups and Venture Capital Ecosystem appeared first on CVCA.

This is according to VC firm Atomico’s latest annual report, State of European Tech 2021, published today (7 December). It found that European tech is creating value at its fastest pace ever, establishing the continent as a key global tech player with a focus on sectors such as clean energy and climate.

The report projects that European tech investment will break the $100bn mark for the first time in 2021 – more than twice the amount in 2020 (which already broke records) and 10 times the amount in Atomico’s first report six years ago. Europe’s tech unicorn count has also shot up to 321, with 98 new additions to the club this year, while the decacorn space of start-ups valued at more than $10bn has doubled to 26 companies in Europe. The report estimated the total value of the European tech ecosystem to have crossed $3trn.

Much of this growth has been led by VC funding. The report found an 88pc increase in VC confidence in European tech in the last 12 months, despite the ongoing pandemic. “This report confirms what we’ve been seeing from our customers: the EU tech ecosystem is on fire. Five years ago, you could fit all of the continent’s unicorns in a dining room and decry Europe’s missing tech giants,” said John Collison, co-founder, and president of Stripe. “Today, you’d need an auditorium with 321 seats, and you’d hear a completely different story.”

Individual funding rounds have also seen an increase in average value, with a considerable chunk of total investment value growth driven by rounds of more than $250m. But Atomico said that smaller funds of less than €25m continue to account for the largest volume of new funds closed.

Dublin has come in at fourth place in the list of top European cities based on number of start-ups valued at more than $1bn per capita, beating Paris at number five and just behind Munich, London, and Berlin in the top three spots.

Overall, progress is yet to be made in the stark gender disparity in European tech. Atomico said that 86pc of deals in 2021 across Europe were raised by all-men founding teams. It also highlighted that the ratio of women leaders to founders is incredibly low, but women make up nearly a third of the next generation of leaders operating in the European tech ecosystem.

Central and Eastern Europe (CEE) lags behind Western European peers in attracting venture capital. The region accounts for less than 5% of funds, despite having 10% of European GDP and 27% of the European population. Lack of local VC funding does not prevent the emergence of local success stories. However, almost a third of the 34 unicorns the region has generated were bootstrapped. One notable example is Croatian Infobip, which its founders financed before receiving the first funding round in July 2020, making him the first official unicorn in Croatia. Although the Croatian VC market is growing exponentially, Croatia lags behind its CEE peers. With 129 startups per million of the population who raised EUR 64 in VC funding per capita, Croatia is one of the worst performers. Estonia is the global champion with 1,197 startups per million of the population who raised EUR 1,252 in VC funding per capita. Perhaps Croatia can use Estonia as the role model, knowing that it is never easy to replicate the success of startup nations like Israel (original) and present-day global champion (Estonia).

The post Atomico State of European Tech 2021 Report appeared first on CVCA.

The publication features 22 of the region’s successful private equity and venture capital investments fully exited between 2015 and 2019, to show the investment and value creation strategies that private equity is employing today in CEE. While by no means an exhaustive list of the region’s successes, these case studies provide insight into how private equity managers are leveraging the fundamental attractiveness of the CEE region into high returns for investors and value creation for citizens.

CEE has changed dramatically since the first private equity investors targeted the region at the beginning of the 1990s. Today, with a fourfold increase in GDP from 1995 to 2019, the region plays a significant role within the overall European political and economic landscape. Indeed, Central and Eastern Europe include 11 of the 27 European Union member states, and the region’s trade and industrial capabilities have made it an integral part of Europe’s production and service economy. Between 2003 and 2019 the industry invested nearly EUR 29 billion of capital in 4,300 CEE companies. These PE-backed enterprises have played an important role in bringing skills, knowledge, and know-how, especially to mid-market and growth businesses, throughout CEE. Invest Europe’s recent study on private equity’s economic impact found that CEE led all other regions in terms of the percentage of jobs created. CEE’s private equity-backed companies grew their employment to over 316,000 workers in 2018, which represents a growth rate of 10.7% year to year, compared to the 0.7% growth of the overall employment market in the same period.

It should be said that private equity in CEE has a long story of building ESG into its investment processes. For example, CEE managers had to deal with extensive environmental challenges and constraints in the 1990s, and since then have consistently integrated these issues into their post-investment activities as key sources of value creation.

CEE is also increasingly home to venture, technological investment, and innovation. The region’s traditionally strong technical education and skills, available human resources in areas such as programming and development, dynamic local environments with limited legacy infrastructure, and government support programs that recognize the importance of developing innovative businesses have changed the investment landscape. The growth trend is expected to continues going forward due to the record level of VC fundraising over the last three years – a record of EUR 338 million has been invested in CEE VC in 2019.

The listing of Allegro, Poland’s leading e-commerce marketplace, became one of the most sizeable and successful European-grown IPOs of the year when Mid Europa Partners, Permira, and Cinven floated the business on the Warsaw Stock Exchange. The full exit of Danwood, a Polish manufacturer of pre-fabricated houses, earned Enterprise Investors a reported 9x return after a six-year-old. Auto24, Estonia’s leading automotive classified advertising platform, was sold by BaltCap for some 4x money invested after a three-year hold. Baltik Vairas, a Lithuania-based bicycle manufacturer exporting over 270,000 bikes to some 14 countries, earned LitCapital wide media coverage for its successful turnaround. Innova Capital’s exit from Polskie ePłatnosci, a Polish payment provider, highlighted the region’s digitalization potential. ARX Equity Partners’ exit from Diagnosticni Center Bled, a Slovenian private healthcare services company, returned 3.6x and demonstrated the continued appetite shown by strategic investors for private equity-owned companies.

Two unicorns – Estonia’s sales CRM developer Pipedrive and Croatia’s full-stack communications platform provider Infobip – were born when mid- 2020 financing rounds pushed their valuations to over EUR 1 billion.

22 companies financed by private equity funds in CEE were analyzed in detail, including Anwis, AZ Klima, Bambi, Bitdefender, Deutek, Dino, Dotcard, Eutecus, Fitek, Home.pl, Knjaz Miloš, KVK Holding, Magnetic MRO, MSV Metal Studénka, Novago, PBKM (Famicord Group), Profi Rom Food, Rankomat, Swell, Urgent Cargus, Velvet Care and Wirtualna Polska. These companies went through the entire investment cycle with private equity funds, from investment to exit, in the period 2015-2019.

Individual company profiles show the history and reasons for the investment as well as the transaction structure. They outline the contribution of funds to building the value of companies, to their growth and development, to supporting innovation and activities in the field of ESG (environmental, social, governance).

You can download Invest Europe report below.

The post Private Equity in CEE: Creating Value and Continued Growth appeared first on CVCA.

“The Deloitte Technology Fast 50 Central Europe 2021” is a program that ranks innovative, fast-growing, and young companies from this part of Europe. The program ranks the 50 fastest growing public or private technology companies. Companies must have an operating income in the base year of € 50,000 in 2017, 2018, 2019 and an operating income in the current year (2020) of at least € 100,000.

Seven Croatian companies were placed in this year’s Deloitte competition of the 50 fastest growing technology companies in Central Europe.

Four entered the main category of the 50 fastest growing and three in the category of Stars of the Highest Growth, while three more companies were presented in the category of Stars of Positive Impact. In the main category, Three of them is in 19th place with 1011% growth, Flow and Form is in 32nd place (726%), Async Lab is 33rd with 725% growth, and Reactor Studio is 37th with 684%.

Bazzar.hr (52nd, growth 541%), Udonis (53rd with 536%) and Newton Technologies Adria as the 54th (529% growth) were almost on the main list. At Stars of Highest Growth Brightdock is in 4th place with 2010% growth, HiveTech Ltd. in 12th place (786%), and CircuitMess in 24th place (203%).

In the Star of Positive Influence category, launched last year, Q, Nanobit, and Speck were presented.

The post Seven Croatian companies on Deloitte’s list of the 50 fastest-growing technology companies in Central Europe appeared first on CVCA.