Budapest Letters #34
👋 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 #34, 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: ✍️ Selected bunch of EU member countries agreed to launch an investment fund targeting European scale-ups ✍️ Mediately, eAgronom, Sportening and Tokinomo raises 💵 ✍️ Romania’s Rodica Guisset (FLOWX.AI) aims to increase her startups presence in EMEA and beyond ✍️ Ukraine’s Fintech Farm set to launch 8 neobanks in emerging markets
🔥 Story of the Week
EU Member States have agreed to launch a pan-European scale-up initiative, which aims to finance promising companies in their late-stage development. According to plans, the so-called European Tech Champions Initiative (ETCI), via an umbrella investment fund, will be managed by EIB Group with €500M*.
Main argument for its creation, as per the official communication, is that there are a lack of European funds specialising in this segment (i.e. helping to make the leap from startup to “grown up“ phase), so it is difficult for such companies to scale; or they can manage but only with non-European capital (e.g. 🇺🇸 or 🇨🇳).
But now, if all goes according to the plan, the EIB will got their back.
This is a big win for the acting French EU Council Presidency, and President Marcon in particular, because the ETCI seems to be an ambitious and razor focused initiative that, if done right, could accelerate the European tech / startup sector that is already riding high. But more success is always welcome.
*Just to clarify, above budget is only what the EIB Group allocates to the umbrella fund. Additional 💰 is expected from the 18 signatory EU countries (ca. €10B, in total), which does not include Hungary, Poland, Czechia, Slovakia and Croatia from CEE 😭
Show Me Da 💶
👏 Mediately, a medtech startup from 🇸🇮, received €7.2M, led by Piton Capital (🇬🇧), with participation from Venture Friends (🇬🇷) and existing investors Silicon Gardens (🇸🇮) and LANCHubVentures (🇧🇬). The startup, that simplifies / organizes / localilizes complex medical content for doctors via web and mobile, will use the fresh funding for international expansion and fine-tuning its product.
👏 eAgronom, an agritech startup from 🇪🇪, bagged €6.4M, led by Yolo Investments (🇪🇪) and ZGI Capital (🇱🇻), with participation from Trind VC (🇪🇪), Iron Wolf (🇱🇹) and United Angels (🇪🇪). The company, which provides agro businesses with a cutting-edge farm management software + agro consultancy, will use the money to boost its product offering and expand its market presence (in and out of the EU).
👏 Sportening, a social media startup from 🇭🇷, snatched €6M, led by angel investors, among them Luka Modrić, the Real Madrid football star. The startup, that aims to connect sport fans across the globe, will use the funding to expand its user base; target for this is 6M total users by the end of 2023.
👏 Tokinomo, a mediatech startup from 🇷🇴, nabbed ca. €1.5M, led by a group of business angels, with participation from Early Game (🇷🇴) and IRR (🇷🇴), both existing investors. The company, that offers point-of-shelf display robotics systems that play with sensors, light and motion, will use the money to expand.
👏 Additional investment news that you should know about:
EpicVR (🇵🇱) secured ca. €1M, led by Poland’s NCRD - more here
OCCO (🇪🇪) bagged €750k from Skeleton Tech’s Oliver Ahlberg - more here
Specialist VC (🇪🇪) announced a new €50M fund, while Change Ventures (🇪🇪) unveiled an almost identical (€49M) one, aiming at (chiefly) Baltic startups - more info on Specialist’s fund // more info on Change’s
🚨 Startup Alert
This week’s startup alert is not on a biz but rather on Rodica Guisset, the newly appointed MD of FLOWX.AI, a startup from 🇷🇴 that helps financial institutions build and ship digital products faster than it would be (via legacy IT) possible.
The reason for this is that The Recursive’s interview with Ms. Guisset is an inspirational read about a women who is on top of her game, and who also happens to know this. And that is cool. I would advice you to read the piece in its entirety but, as a small teaser, here are two strong quotes that caught my eye:
“ I didn’t grow up in a world full of concrete dreams – didn’t want to be a ballerina or a space explorer. But I did want to build. So here I am, I am lucky.”
“My definition of success is working and not even realizing you are working because you enjoy what you’re doing. It may sound cheesy and “fleur bleue”: But as long as you can make a living, and you are having fun in the process, you are successful.”
🧠 Food
Fintech Farm (FF), a London-based fintech startup that built a neobank in Azerbaijan called Leobank, now aims to build another 8 in emerging markets, specifically targeting Africa and Asia. And with a fresh raise of ca. €6.5M this sounds very much plausible, especially if we add to the picture that FF was founded and is lead by seasoned entreprenuers from 🇺🇦, like Dmytro Dubilet (co-founder of Ukraine’s Monobank) and Alexander Vityaz, founder of Middleware.
This story is interesting to me because if FF can pull this off, i.e. building neobanks in a “factory”-like mode in cooperation with smaller banks, that could easily alter local power dynamics from large to small players. A refreshing possibility. Such a scenario would, firstly, introduce competitiviness on markets where it was atypical. And secondly, customers in emerging markets could access fully-fledged banking apps (+ financial tools / services) that are in sync with Western best practices, empowering them to be financially independent.
Sure, maybe I am overthinking this and I am seeing stuff that are not there. Maybe. But if these projects will realize only half of the good things that such solutions could bring to the table (e.g. digital first, on-demand, transparent, customer focus driven), both local FS industry and clients could win. Big.
PS: After Nigeria, FF’s first target after its successful launch in 🇦🇿, the company could also launch some neobanks in CEE, as well. Competition could come in handy 😉