Budapest Letters #19
👋 Hi All! Great to have you back. This is Budapest Letters, my newsletter covering startup and small business stories from the CEE region, or interesting developments that might have something to do with this part of Europe. Hope you will enjoy it!
Before we jump into edition #19, big shout out to our new subscribers, good to have you here. And one more thing before we roll, if you like what you read, subscribe + share 🙏
Cheers, Aron
📢 TL;DR
Top stories this week: ✍️ Hungarian business data shows that Gen Y founders were not deterred by the pandemic and they are happy to establish companies ✍️ TransferGo, BeMe and SenseTask raised 💵 ✍️ Lemonero is taking the Czech digital financing market by storm with the wider CEE region (possibly) next ✍️ CoinGecko reports that Europe is the leading global market for cryptocurrencies
🔥 Story of the Week
A recent study by Opten, a leading company data provider in 🇭🇺, found that Gen Y entrepreneurs (founders born: 1980 – 1995) are steadily increasing their share within the overall pool of Hungarian company owners for years; a process which, interestingly, was even slightly accelerated by the COVID-19 pandemic.
This development, however, does not mean that they represent the biggest group of business owners, because that trophy belongs (by far) to Gen X founders (born: 1960 – 1979); still, it is important to note that Gen Y is now on-level with Baby Boomers (founders born: 1940 – 1959) at the number 2 spot. Big milestone.
But what is more encouraging is that among newly founded company owners, Gen Y founders are in the lead (overcoming Gen X for the first time since statistics are published) with Gen Z founders (born: 1996 – 2007) going very strong as well; latter group already founded as much companies in the first 8 months of 2021 as they did last year, in total. So despite all the bad news, there is light ahead folks.
Show Me Da 💶
👏 TransferGo, a digital money transfer startup from London with a founding team from 🇱🇹, received ca. €43M, led by Elbrus Capital and Black River Ventures, two VC companies from 🇷🇺. The startup, which has around 3.5 million customers (both private individuals and businesses), aims to use the fresh funding to increase its client base and develop its product offering further.
👏 BeMe, a health tech platform from 🇨🇦 with strong roots in 🇧🇬, bagged €750k, led by Eleven Ventures, a well-known Bulgarian VC firm. The company, that provides an AI-driven platform designed to empower autistic individuals and their families, will use the fresh money to perfect its tech and grow user base.
👏 SenseTask, a document processing startup from 🇷🇴, nabbed €480k, chiefly from Innovation Norway, the international trade arm of the Norwegian Government. The startup offers advanced data extraction capabilities, and it aims to use the newly raised sum to develop its platform and technology further.
Congrats to all teams!
🚨 Startup Alert
This week’s alert is on Lemonero from 🇨🇿, a startup that provides financing for local e-commerce businesses. The approach of the company is interesting in two ways. Firstly, they work together with Komerční banka, one of the biggest commercial banks on the Czech market, a notoriously tough act to pull off; but the partnership (Komerční owns ca. 10% of Lemonero) seems to work out for now.
And secondly, it exclusively focuses on the financing of small- and medium-sized e-commerce firms. A smart move, especially in these COVID rigged times. So how the platform works, is pretty straightforward: 1) Business applies for financing online; 2) Lemonero checks performance of the business (focus on sales data for the previous year + order informations + sales volumes); 3) Based on this, Lemonero transfers funds within 24 hours. Not your avg bank loan process 😜
Of course, the startup only offers short-term financing (3 / 6 / 12 months) and in the ca. €1k to 40k lending amount range, which is relatively basic for many established banks. But given that the whole process is fast, fully online, and customer friendly, Lemonero is on to something. And in CEE, for sure.
🧠 Food
According to CoinGecko, one of the top crypto data aggregator platforms out there, the total value of the global cryptocurrency market currently stands at an estimated $2 trillion and counting. Out of this large pie, Europe holds ca. 35%, Asia has ca. 30% and North America has ca. 20%, making them 1-2-3.
Within Europe, 🇬🇧 is the leading crypto market with by far the highest activity in this field. Following our nowadays fuel-shortaged British friends comes 🇫🇷, 🇩🇪, 🇳🇱 and 🇪🇸, tied with 🇨🇭, at #5.
In terms of most popular crypto currency types, Ethereum is in the lead in Europe, and quite solidly I would say; interestingly though, not counting current or ex-tax havens like Guernsey, Lichtenstein and Andorra, 🇸🇮 is the sole European county where Ethereum and Bitcoin transactions are almost in balance.
Key takeway? All of you should start learning about crypto and start investing with spare change (this is not investment advice), just to get a feeling of the future.