Budapest Letters #35
👋 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 #35, 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: ✍️ Balderton Capital, a VC heavyweight, hires Finnish talent to boost its investment presence in the Nordics and Baltics ✍️ Linker Cloud, CoLumbo, Archbee and EyeVi Technologies raises 💵 ✍️ Czechia’s Dronetag aims to make drones smarter and safer ✍️ Corporate Europe lags behind Corporate America by miles when it comes to innovation and growth
🔥 Story of the Week
Balderton Capital, one of the most prestigious European VC firms from 🇬🇧, announced the hiring of Henni Roini (🇫🇮) to boosts its presence in the Nordics and Baltics. Ms. Roini, who has strong ties to the Finnish startup ecosystem, will support Balderton’s Nordic / Baltic investment team as an associate. A team, btw, which also hosts Magda Lukaszewicz (🇸🇪/🇵🇱), another super talented women.
The firms expansion strategy is pretty clear, and very much similar to the ones executed by large US and fellow UK funds, move into European regions that are booming (incl. CEE), and which were not in their focus in the past. Mind you, for most 🇺🇸 VC firms, this means the whole of Europe, not just North Europe.
But the results are basically the same, respectable local VC funds in both regions will need to get accustomed to competing with Anglo Saxon high-flyers (like Index, Sequoia, Accel or Balderton), not just the competitors they are used to.
For me, as I wrote a while back (edition #13), this development translates into the following: “Competition drives ambition, focus and strategy. Competing against the best in the industy will help European VCs to mature and get even better.” So this, I feel, is great and should be celebrated by founders and local VCs alike, because both will benefit from it. Sure, not the mediocre ones, but someone needs to lose.
And if these are the less founder focused and less talented ones, so be it.
Show Me Da 💶
👏 Linker Cloud, an e-fullfilment startup from 🇵🇱, received €3.5M, led by ffVC (🇵🇱) and Street Smart Capital (🇫🇮), with participation from Market One Capital and Kogito Ventures, both existing local VCs. The startup, that connects e-commerce brands with logistic centers via a virtual fulfillment network (like Photoneo), will use the fresh funding for its European expansion and fine-tuning its product.
👏 CoLumbo, a healttech startup from 🇧🇬, bagged €2.1M, led by Eleven Ventures and BrightCap Ventures, two well established local VC firms. The company, that supports the work of radiologists with AI-driven analysis of lumbar spine images (i.e. figure out what causes back paines), will use the money for 🇪🇺 expansion.
👏 Archbee, a documentation startup from 🇷🇴, snatched ca. €1.8M, led by Global Founders Capital (🇺🇸) and Credo Ventures (🇨🇿), only few months after raising raise ca. €900k, led by Inovo (🇵🇱) and YC (🇺🇸). The startup, that simplifies and digitalizes technical product documentations, will use the funding to expand its user base.
👏 EyeVi Technologies, a data processing startup from 🇪🇪, nabbed €1.8M, led by ffVC (🇵🇱), with participation from bunch of other VCs, like RKKVC (🇵🇱), Decacorn (🇸🇬) and Superangel (🇪🇪), plus business angels. The company, which provides imaging hardware and a mapping analysis software platform (specifically targeting large scale infrastracture projects), will use the money to expand.
Congrats to all teams!
🚨 Startup Alert
This week’s startup alert is on Dronetag, an IoT hardver maker from 🇨🇿, that specializes in solutions that make drone flights safer. The company has one existing (Mini) and two soon to be launched products (Modul + App):
Dronetag Mini: Remote identification device designed as an add-on that can be mounted to any drone. Mini ensures that any drone is visible for all air traffic participants. Oh yes, and it weighs ca. 30 grams.
Dronetag Modul: A remote identification module for drone manufacturers that will be connectible with the flight controller.
Dronetag App: A mobile app that will enable pilots to visualise flight zones, plan their flights, including official authorisation, and to keep an interactive flight journal. Plus, the app will be connected to other air traffic management systems.
But if the above sounds slightly complicated, here is an intro to what they do:
🧠 Food
A fresh article by the FT’s Peggy Hollinger argues that according to recent data, European companies lag behind their US counterparts by miles when it comes to innovation and growth. Of course, even if you seldomly follow global business news, this is nothing new. However, but maybe it is just me, I thought the COVID pandemic might have narrowed this gap. At least a bit. Well, newsflash…
As Ms. Hollinger notes:
“The region’s problems appear to have been exacerbated during the pandemic, when just 16 European companies, including four from the UK and Switzerland, edged into the global top 100 in terms of market capitalisation growth over the two years to the end of 2021. In contrast, the US delivered 58. During the same period, the S&P 500 rose by 46 per cent, against just a 16 per cent rise for Europe’s Stoxx 600.”
Sheesh, real eye opener. Sure, the startup scene is booming. The continent produces unicorns like never before. And money is flowing like champagne.
But despite all the success and factual acceleration vs past historical performances, European startups are still no match for their US rivals. And if we add this to the fact, following Hollinger, that the overall European economy and corporate players (from small to large) are no match for Americans…
Sad times. Not entirely and for eternity, though. Only if we do not do something about it, asap. So let us hope that those in position to change course, will do so.