Budapest Letters #30
π Hi All! Great to have you back. Hope the festive season was joyful for all of you and now you are fully charged and pumped about what 2022 holds. I, for one, sure am.
Nonetheless, this is still 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 this year, as well!
Before we jump into edition #30, 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 π
Cheers, Aron
π’ TL;DR
Top stories this week: βοΈ European investors predict top startup trends for the old continent in 2022 βοΈ Wolf3D, Higo Sense, Woola, Spark Technologies, HeavyFinance, Raison and Stailer raises π΅ βοΈ The Recursive ideates on which local startups might become soonicorns and centaurs in Southeast Europe βοΈ Sifted, a new-media site focused on European startups, lists 11 predictions that might shape the CEE startup and investment scene in 2022, for the better
π₯ Story of the Week
The end of year holiday season is always awashed with smart / goofy / self-serving predictions for the upcoming year and this past one was no different. However, the one published by Amanda Pun via EU Startups caught my eye. Firstly, because it focuses on European startup trends. And secondly, because it reflects the views of respected investors, like Beata Klein (Creandum) and Rockman Law (Ascension).
And since we all know thatβ¦
β¦these predictons will probably turn into reality so it is not the usual BS.
So the top European startup trends for 2022 to look out for:
Web3, incl. NFTs, DAOs, Creator Economy and Security
Future of Wealth Management and Personal Finance
Climate Tech and Sustainability
PS: From the above, I feel #2 is relevant for CEE and maybe #3, more or less, but when it comes to Web3, I think we need couple of years to catch-up w leaders.
Show Me Da πΆ
π Wolf3D, a metaverse developer startup from πͺπͺ, received β¬13M, led by Taavet+Sten, the micro VC firm of Wise co-founder Taavet Hinrikus and Teleport co-founder Sten Tamkivi. The startup, that built and operates Ready Player Me, a popular metaverse platform, will use the fresh funding to fine-tune its product.Β Β
π Higo Sense, a digital health startup from π΅π±, bagged β¬5M, led by Cogito Capital Partners (π΅π±), with participation from existing investors. The company, that offers a medical examination device via mobile app (coupled with an AI-powered health diagnostic platform), will use the money for expansion and product development.
π Woola, a sustainable packaging startup from πͺπͺ, nabbed β¬2.5M, led by Future Ventures (πΊπΈ), with participation from existing investors, like Lemonade Stand (πͺπͺ), and a bunch of business angels, like the leaders of Veriff and the co-founders of Pipedrive. The startup, that helps replacing plastic bubble wraps (harmful) with leftover sheep wool-based wrapping (eco-friendly), will use the fresh funding to launch new products and expand, for now, within Europe (GER, FR, UK).
π Additional startup investment news from the past weeks, include:
Spark Technologies, an electric car-sharing startup from π±πΉ, received β¬30M via capital commitment, subject to listing on a major stock exchange
HeavyFinance, a fintech startup from π±πΉ, netted β¬1M - more
Raison, another fintech startup but from πͺπͺ, bagged β¬795k - more
Stailer, an online booking platform from π·π΄, nabbed β¬500k - more
π¨ Startup Alert
This weekβs alert is on The Recursiveβs Southeast European soonicorn and future centaur list which provides a glimpse into a region (and countries) that still often gets neglected in Western business media coverages; bare maybe π·π΄, which - thanks to the global success of UiPath - starts getting attention from journos.
Check the list. Cool companies and stories. Cannot ad anything.
π§ Food
Back in edition #28, if you can recall, I wrote about Atomicoβs State of European Tech report and the data on CEE. In sum, this was one of the main takeaways:
Despite having the highest population share among analysed regions within Europe (27%) and providing 10% of its GDP, CEE attracted only 5% of total VC funding in 2021. Ouch.
Of course, this is an exaggeration, because 5% in itself does not tell the real and immense development the region performed since the collapse of the USSR and its horrific political and economic system. But it is also a fact to note, especially when one, like me, is bullish on the prospect CEE has to offer. And thankfully, this sentiment is shared by local experts via this Sifted piece by Kit Gillet that lists 11 predictions that will shape the Central and Eastern European scene in 2022.
But here, as a teaser, I will only note three that I strongly share:
Perception change: CEE was considered a backwater for startup investments and cool business stories for many years that can barely make international headlines. Skype was considered a lonewolf, an exception, not the norm. But with UiPathβs NASDAQ listing or Woltβs, Rohlikβs and Boltβs mega-raises in 2021, the long awaited big momentum might be here.
Money showers: Connected to the above, respected regional VC firms are closing never before seen funds (β¬100Ms), while global bigwigs (Index, Partech, Balderton, etc.) are entering the market in droves so the startup scene will be flooded with large checks + real bridges to global success.
Global mindset of local founders: Majority of CEE founders (except maybe the ones from the Baltics) were seen less ambitious than their Western, especially Anglo-Saxon counterparts, in the past. However, the last few years showed that more and more local entrepreneurs have what it takes to become successful on the global stage and this will elevate the region. Socialist heritage, corruption, bad politicians can no longer be an obstacle.
So while we came a long way, the job is still not done. But 2022, as per these predicitions, might very well be a milestone year in this positive growth story.
π€