Budapest Letters #27
👋 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 #27, 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: ✍️ Republic, an investment platform from 🇺🇸, is set to acquire Seedrs, a popular crowdfunding platform from the UK, creating a dominant international player ✍️ GScan, Doctor.One, Alpha AR and Karma Ventures raises 💵 ✍️ Hungary’s Craft Docs wins Mac App of the Year ✍️ Deloitte, a global professional services giant, announces its Fast 50 CEE list
🔥 Story of the Week
Republic, a popular investment platform from 🇺🇸, announced that it had reached an agreement to buy Seedrs, a UK-based crowdfunding platform that - upon its founding, back in 2012 - was one of the first in this space in Europe.
While in its self this move could be labelled as pretty standard and boring M&A news, since US companies are buying up international counterparts all the time, this development is in fact very interesting. And what makes it such is the fact that only 8 months ago the Competition & Markets Authority, the UK’s official market regulator, blocked a similar move by Crowdcube, a local rival.
Now if this deal, that is still waiting for the 👍 by local authorities and Seedrs shareholders, will get the actual green light, a truly international crowdfunding / investment platform will be born that could be a dominate player on both sides of the Atlantic. For users, this is great news. For European startups and the larger ecosystem, I am not sure. But my gut feeling is that it would not be so great.
Firstly, Seedrs is a European success story that still has strong growth potential, especially with the new, unified EU-wide crowdfunding rule in place. With this move, it will slowely disappear within Republic. And secondly, even if this would not be the case (i.e. could not grow independently), teaming up with Crowdcube could have created a dominant UK/EU player that could have boosted the overall European crowdfunding scene, which is still in its infancy. And this is now lost…
PS: But hey, on the flip, maybe this way one of the CEE platforms will have a shot to become leaders of Europe… lookin’ at you SeedBlink and Funderbeam. Why not? 😉
Show Me Da 💶
👏 GScan, a deep tech startup from 🇪🇪, received €500k, led by Indrek Kasela, a well-known and very active local angel investor. The startup, that offers cosmic ray 3D scanners for security and cargo scanning (ca. €13 billion market), will use the fresh funding for international expansion and new product development.
👏 Doctor.One, a health tech startup from 🇵🇱, bagged €440k from Movens Capital, a local VC. The company, that allows doctors to create and run digital-first private medical practices via subscriptions, will use the money for expansion.
👏 Alpha AR, another deep tech startup from 🇪🇪, nabbed €350k via How To Web’s 2021 Spotlight competition. The startup, that provides 3D models for various use cases with the help of AI technology, will use the funding to fine-tune its tech.
👏 Karma Ventures, a venture capital firm from 🇪🇪, closed its new €100M (!) fund that will be used to invest in deep tech startups across the Baltics. The fund is backed by the European Investment Fund, all Baltic nations, respected local entrepreneurs / angel investors and institutional investors, like LHV Pensions.
🚨 Startup Alert
This week’s alert is on popular writing and productivity app Craft Docs, that was recently named Apple’s Mac App of the Year at the 2021 App Store Best of Awards. The app that was developed and designed by Bálint Orosz, a talented product designer turned entrepreneur, and his team from 🇭🇺 counts more than 300k users, globally. Craft was released almost exactly a year ago, built natively for Mac, as well as iOS and Web. It has an avid following, matched only by Notion’s, that it aims to overtake as the pre-eminent productivity app out there.
Backed by European VC heavy-hitter Creandum (Series A: $8M), the Craft team has a serious shot at achieveing something really big in the coming 1-2 years, should the current growth rate and high product quality persist. But it should.
And now, a cool virtual intro to Craft by youtuber / designer Jeorge Paolo:
🧠 Food
Deloitte published its Technology Fast 50 Central Europe 2021 list, that annually tells the outside world which are the startups to watch from the region. The award winners are determined based on the revenue growth over four years (2017 to 2020). Not sure whether revenue growth is the best marker for establishing future potential or assessing level of innovation, BUT, it is still a fairly reasonable KPI that startups can be compared by. Hence, without further ado, winners are:
2021 Technology Fast 50
FTMO (🇨🇿, Fintech) with +39 432% growth
Kilo.Health (🇱🇹, Healthcare) with +17 710% growth
Driveto (🇨🇿, Fintech) with +5 829% growth
Huge congrats to the Top3 and all other listed startups. And also big up to all other category members (there were 3 others) and their winners / participants.
CEE rocks, folks! Told you many times already, but heck, it really does 😁