Budapest Letters #22
🤖 Programming note: Budapest Letters will be out next week.
Next edition drops on 8 November.
👋 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 #22, 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: ✍️ The CEE joint-venture of Global Payments and Erste Group is launching crypto currency acceptance on small business POS devices ✍️ Proportunity, Rossum, Resistant AI and several other regional startups raised 💵 ✍️ North Macedonia’s Howitzer is revolutionizing direct marketing campaings on Reddit ✍️ Fundacja Digital Poland lists the Top30 digital champions of the region
🔥 Story of the Week
It is rare that an incumbent bank (or an affiliate org) launches something exciting in CEE but sometimes, it happens. And that is good a thing. One such example is that of Global Payment’s and Erste Group’s payments joint-venture (GP) in the region that will launch crypto acceptance on their POS devices via GoCrypto.
According to GP, the solution will be released on 8k POS devices this year and then on another 40k in 2022, meaning that selected small merchants across Czechia and Slovakia (for now) will be able to accept various crypto currencies (e.g. Bitcoin, Ether, Litcoin) besides the old school (i.e. local currency, euro) ways.
I believe that this is big step in the right direction. Popularity of crypto currencies are steadily growing so it is logical that big providers let people pay with them and merchants accept such payments. Nonetheless, I am curious how will this “experiment” go but considering that GP will let merchants convert crypto payments into local currency (or euro) ones, should they not have a crypto account themselves, the whole process will be simpler and easier for all parties.
Great stuff.
BTW: I worked for Erste Group in the past but I do not own any stock, and Erste did not pay me to to write this, so there are no hidden interests here, trust me 😀
Show Me Da 💶
👏 Proportunity, a proptech-cum-fintech lending platform from London with 🇷🇴 founding team, bagged ca. €129M, led by VentureFriends (🇬🇷) and Kibo Ventures (🇪🇸), with participation from existing investors, including Anthemis (🇺🇸). The company, that provides home purchase loans for soon-to-be property buyers is tackling a need (i.e. loans covering upfront bank deposit requirements) that is not only present in the UK but also in most other European countries. So the startup’s growth potential, if they can make the business model work, is over the top.
👏 Rossum, an AI-based cloud document gateway startup from 🇨🇿, received ca. €86M, led by 🇺🇸 VC giant General Catalyst, with participation from existing investors (e.g. Miton, a local smart money / venture builder firm). The startup, which offers businesses a cloud-based solution that unifies all inbound information channels; understand, which is concerned with data capture; and communicate and act on them. Pretty science fiction, right. But Rossum provides it. And large corporates, as one would expect, love it. The whole process simplifies and speeds up data processing so much so that Rossum’s added value cannot be overstated. They help business save crazy sums, while also making back-office work more efficient. I am sure we will hear more about Rossum.
👏 Resistant AI, a fintech security startup from 🇨🇿, landed €14.2M, led by GV (ex-Google Ventures) and existing investors, such as Index Ventures (🇬🇧), Credo (🇨🇿) and Seedcamp (🇬🇧). The company offers AI-driven fraud and financial crime prevention for (typically) banks and insurers, a field that is red hot nowadays.
👏 Additional noteworthy investment rounds: OfficeRnD (🇧🇬), Memgraph (🇭🇷), Bob Concierge (🇷🇴) and Orgnostic (🇷🇸) – huge recent weeks for the region!
Congrats to all teams!
🚨 Startup Alert
This week’s alert is on Howitzer from 🇲🇰, a marktech startup that provides a tool for sole entrepreneurs, businesses and business development/marketing professionals to find and reach out to Reddit users; those of you who have no idea what Reddit is, check this superb overview on the US platform via digitaltrends.
In short, what Howitzer does is it scans Reddit subgroups and identifies people that are into a product, services or topic that is relevant for a given business, and then sets up a direct message campaign to target them. Cool solution in many ways. Firstly, because it saves time and money for businesses, especially for small ones, who – oftentimes – have neither. And secondly, it is good for potential customers as they will get something that they might value. Win on all sides.
Added bonus to this story is that – unfortunately – North Macedonia is rarely mentioned in a positive context in global affairs (= politics, always politics) but Howitzer’s story, founded by a young, talented local team is more than promising. I do hope that with backing from 🇭🇺 VC Day One Capital they will 🚀
Plus: More on Day One’ investment in Howitzer and the why’s behind it, check Bernát Nacsa’s (Principal, Day One Capital) recent Medium post.
🧠 Food
To finish up this week’s edition, here is an interesting regional ranking by Fundacja Digital Poland that aims to rank the so-called digital champions of CEE; not perfectly sure about the underlying methodology here but it is said that key financial and business metrics were analyzed via independent sources (e.g. Dealroom.co) in order to create a comprehensive and trustworthy assessment.
I for one think that the addition of LogMeIn for 🇭🇺 is slightly questionable (i.e. HQ in 🇺🇸, no Hungarians in C-suite) but of course I can live with it since there would not be any other company from here; plus, on the positive side, at least LogMeIn still has two R&D centers in Hungary. So what the heck, its fine.
But here is the list (🇵🇱 and 🇨🇿 going very strong, as you see), check for yourselves and share your thoughts in comments, either here, on Linkedin or Twitter:
And…