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Romania - The fertile ground for tech startups

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Bianca Iulia Simion

· 4 min read
Romania - The fertile ground for tech startups
Alina Georgescu (Catalyst Romania), Vlad Panait (Sparking Capital), Dan Calugareanu (Early Game Ventures) & Matei Dumitrescu (RocaX) share their thoughts on the attitude and strategy for 2023 startup investment ecosystem.

CEE is the fastest-growing ecosystem in Europe in terms of enterprise value, funding, and average funding per startup, according to the recent report published by Dealroom, Google & Atomico.

Romania is one of the leading countries showing signs of fast growth since 2017, in different respects. The country is home to one of the most well-known IPOs in the region (UiPath), three successful unicorns (UiPath, Bitdefender, Elrond), and a wave of new startups awaiting to take off (Fintech OS, Soleadify, eMag, Tokinomo, Flowx AI.).

The recent success of these companies has brought a waterfall effect on the local community, empowering more entrepreneurs in taking the leap, and highlighting the validation necessary in the eyes of international investors. The country's particular strength lies in enterprise software, process automation, developer and collaboration tools, software development, cybersecurity, and marketing & sales, creating value and attracting VC funding.

“The Romanian startup ecosystem is an example of a bottom-up approach. The first wave of Romanian tech entrepreneurs did not wait for government action, but forged their own path and pushed for systemic progress. This emerging scene shows clear signs of skilled talent, hard work, ambition, collaboration, and great use of resources - one of the reasons we read the news and get excited.” Andrei Dudoiu, Managing Partner at SeedBlink.

To celebrate our National Day this year, we asked four of our Romanian partners to share their thoughts on the local ecosystem and the industries they believe in, and to give us some suggestions for investors and founders. Thank you, Catalyst Romania, Sparking Capital, Early Game Ventures and RocaX, for your perspectives and for your continued support of the Romanian ecosystem!

Which industries in the Romanian ecosystem do you think have potential and will you be enthusiastically pursuing in the near term from a venture investment perspective?

"I believe that technological innovation will continue to be a must for startups that want to survive and grow, while social responsibility could become a differentiator for long-term success. That's why I look with interest at verticals and industries that are actively contributing to sustainability, whether it's innovative solutions in AgriTech, improving access to healthcare through HealthTech, or the circular economy in the fashion, food or consumer electronics industries."

Alina Georgescu, Catalyst Romania

"There are a few industries where startups find a favourable market and industry environment that, when combined with local skills/talent and investment, provides a great opportunity for scale-up. In my view, these include trust architecture (e.g. cybersecurity), applied AI (e.g. RPA, intelligent automation, optimised decision-making), and gaming. This is not to say that it is not possible to create successful startups in other areas (e.g., fintech, blockchain), but they are less likely to scale up in the short term, in my opinion."

Vlad Panait, Sparking Capital

"DeepTech is the buzzword par excellence. For geographical reasons, however, we remain agnostic."

Dan Calugareanu, Early Game Ventures

"In short, impact orientation, regardless of the vertical, and of startups and investors. Energy, MedTech, EdTech. FinTech or Industry 4.0 are just some of the verticals with a lot of potential that can be accelerated by adopting impact goals

Romania has a young startup ecosystem and is still adapting to challenges and identifying opportunities. We continue to see an increasing demand for digital solutions on the one hand and an appetite to invest in early-stage startups on the other. The focus remains on the technology area, where we are learning to digitise and automate processes and systems."

Matei Dumitrescu, RocaX

A thought for investors looking with interest at the startup ecosystem in Romania?

"Although past results are no guarantee for the future, statistics tell us that the best years for investments are the years before a recession, especially when it comes to early-stage or growth investments. The timing is very good for portfolio diversification. Romania has already proven that it has the potential to produce world-class technology companies if the right founders and visionary investors come, both from Romania and from other regions, especially when we talk about larger investment rounds. We, Catalyst Romania, a VC fund that has been on the market for over 10 years, can confirm that we are operating in a fast-growing ecosystem full of enthusiastic, highly capable founders and innovative startups. We are happy to have supported, through our investments, the creation and consolidation of local market leaders such as SmartBill and Vola.ro and international players such as Green Horse Games or SeedBlink."

Alina Georgescu, Catalyst Romania

"I believe that investors should have a balanced portfolio of different asset classes reflecting different risk-return-liquidity levels. Startups have a strong medium-term growth perspective, which is reflected in the highest IRR among other asset classes (e.g. 15.18% IRR over 10 years, according to Pitchbook benchmark, the highest). CEE is the fastest-growing ecosystem in Europe (according to a Google study for startups, Atomico, Credo, and Dealroom) in terms of enterprise value, funding and average funding per startup, and Romania is one of the top countries in many respects."

Vlad Panait, Sparking Capital

"These are tough times. We all need to come together as investors to help the startup ecosystem continue to grow and continue to look for opportunities."

Dan Calugareanu, Early Game Ventures

"I advise everyone who is thinking of investing in startups to try to find out more about innovation, technology, responsibility, investment and about the potential of Romanian founders.

I have said that it is good to have the courage to ask for feedback, to adapt to the real trends and needs of the market and to know the opportunities; this is also true for investors. It's an open ecosystem that encourages collaboration. It is our duty as investors to explore the opportunities here.

As an investment fund, it is our duty to manage investors' capital in a transparent, responsible and professional manner and maximise the value of the portfolio. The potential for capital growth in this area is one of the highest among investment opportunities on the market and this option should not be missing from any professional investor's portfolio."

Matei Dumitrescu, RocaX

A thought for Romanian founders running their businesses in this macroeconomic context?

"We see nowadays many startups with overpriced expectations, not anchored in the current reality and market multiples, but rather in the past. 2022 has set new records for falling multiples in all sectors, but fortunately, Q3 is the first quarter that shows stabilisation. The coming period will bring many challenges for companies, but it will also be an opportunity for the strong to prove their adaptability, optimise their resources and become more competitive. The availability of cash will be a plus. I think the best time for funding rounds is "as soon as possible," if valuations are aligned with the economic situation. High valuations can give founders short-term joy and feed their egos, but if they are not followed by even higher valuations, they can become a path to failure."

Alina Georgescu, Catalyst Romania

"In today's environment, where volatility, uncertainty, complexity, and ambiguity are at an all-time high, I would consider the following to be critical:

  1. Cash flow management and sufficient funding should be a priority to ensure the business is not at risk.
  2. Reassessing and reshaping the value proposition (especially benefits vs. costs) and the efficiency of invested capital (how much euros does an invested euro return?).
  3. Reassess the structure of the cost base from a value creation perspective, including the team.
  4. Leadership is key in these times and the "leadership polarities' should become clear.
  • Self-confidence vs. humility
  • Singular focus vs. multitasking
  • Generating excitement vs. restraint
  • Ruthlessness vs. compassion
  • Taking the initiative vs. reacting quickly
  • Innovation vs. imitation"

Vlad Panait, Sparking Capital

"One thought from my experience working with thousands of startups would be that there needs to be a balance between the desire and the ability to do something useful for a significant part of the population.

In addition, I would like to see more entrepreneurs who have the desire to educate themselves and the courage to be validated, first and foremost by the market, but also by experts. Innovation is not about reinventing the wheel but finding simple solutions to complicated problems.

To educate entrepreneurs, there are accelerator programs for startups where they can connect with people who can help them develop a startup and where, as simple as it may seem, they can learn about and overcome most of the obstacles that lead to startup failure."

Matei Dumitrescu, RocaX

"Resilience and profit maximisation."

Dan Calugareanu, Early Game Ventures


Last year, we provided a complete overview of the players leading the growth of the Romanian ecosystem. Read here to learn more about each of them.

La mulți ani, România!

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