Budapest Letters #44
π 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 #44, 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 ππ»
Cheers, Aron
π’ TL;DR
Top stories this week: βπ» Stock, bond and crypto markets plummeted across the globe, evaporating the savings of millions βπ» Tidio, Hotailors and Synerise raised πΆ, providing a huge week for the Polish startup scene βπ» Slovakiaβs altFINS aims to bring more transparency into to the crypto world βπ» Change Ventures published its semi-annual report on the Baltic startup funding market
π₯ Story of the Week
Well, all good things must come to an end. Just look at global stock and crypto markets. We can π goodbye to the π period that was accelerated by COVID.
But no more.
Hyped meme stocks, big tech stocks and almost all popular crypto tokens are π, and down big time. The savings of millions plummeted or evaporated within the past week. Gruesome stuff. And on top of this, although probably needless to reminde you all, that existing market conditions are already bleak (i.e. rising inflation, increasing interest rates, war in Eastern Europe), hence hopes for a quick recovery seems unlikely. Sure, the bounce back to pre-crash levels may not take 22 years, like it did after Black Tuesday (1929), or ca. 2 years, like it did after Black Monday (1987). But the thing is, both could happen. Or not. It is also realistic that it will take βjustβ a few months. Nobody knows.
So until then, three things can be done; but this is not investment advice:
If one has crypto or stocks investments, and the portfolio looks π©, no worries, stay put. Quick decisions on market changes that are historically common (i.e. after bull market a bear market is always a certainity) are usually bad advisors. So if you can, wait it out, eventually it will get better.
Diversify. No brainer, I know. Still, many forget this simple investment rule. Hype, trusted friends advice, good PR can easily make one think that 1 or 2 stock or crypto token will provide crazy sums quick. True, it can happen. But usually and for most, it never does. So invest widely.
If you are bullish on something and feel that in the long run, whatever that time span entails, its value will skyrocket then this is a good time to buy more or just start it. Extra risky, sure, but can provide big rewards. Here though, one must always remember that this might never come /or/ could but on a longer timeframe, hence only invest what you are willing to lose.
Sounds depressing? Yeah, it does. But eventually, it will get better.
Show Me Da πΆ
This past week was huge for π΅π± startups, as you will seeβ¦
ππ» Tidio, a customer service startup from π΅π±, received ca. β¬24M lead by PeakSpan Capital (πΊπΈ), with participation from local VC Inovo Venture Partners and RafaΕ Brzoska (CEO, InPost). The startup, that provides its clients (i.e. mostly small businesses) with an end-to-end customer service automation platform, will use the fresh funding for expanding its 140 strong team with an additional 100.
ππ» Hotailors, a business travel startup from π΅π±, bagged β¬23M from DialCom24. The company, that offers a platform with which companies can book, organize, supervise and have oversight over employee travels, will use the newly raised sum to launch new products (e.g. insurance), expand internationally (US, Middle East, North Africa), and also help fund its re-branding to βWorkTrips.comβ.
ππ» Synerise, a behavioral data startup from π΅π±, nabbed ca. β¬21.9M led by Carpathian Partners, a Polish run but π¬π§ based VC fund. The startup, that offers its clients a platform to store and process all their behavioral data and automate data-related processes with AI, will use the fresh raise to boost its πΊπΈ expansion.
ππ» Additional investment news that you should know about:
Cachet, an insurtech startup from πͺπͺ, raised β¬5.5M led by French VC fund Truffle Capital: more on this via ArcticStartup
Campiri, a caravan hire startup from π¨πΏ, snatched ca. β¬4.6M led by local VC fund Rockaway Capital: more on this via CzechCrunch
Adservio, an edtech startup from π·π΄, bagged β¬2M led by Catalyst Romania: more on this via The Recursive
Madmonq, a health supplement startup from π¨πΏ, received β¬1.3M from local investors: more on this via CzechCrunch
π₯ to all founders and teams on the fresh raises!
π¨ Startup Alert
This weekβs alert is on altFINS, a crypto market intelligence startup from πΈπ°, that operates a platorm that can show its users a wide variety of informationβs on a given crypto token, including how it did in the past. But it also send alerts, if anything new comes up with a specific token, suggests and implements trading strategies, and monitor the performance of a portfolio across stock exchanges.
And when is a better time to use such a platform than now, when the crypto market collapsed and it is easily a portfolioβs life or death question whether an investor can make further decisions on meaningful insights or not. And that is what altFINS delivers. Structured quality analyses on crypto trends and markets.
For one, investors certainly believe that what the startup has is valuable. No surprise that CB Investments Management, a well-known local VC on the Czech and Slovak startup scene, recently provided altFINS with an additional ca. β¬800k investment, sending its total funding well above β¬1M and counting.
But if you are interested in altFINS a bit more, check their site and blog.
π§ Food
Three issues ago I wrote here about the state of the Hungarian startup ecosystem based on the findings of the Hungarian Startup Report 2021, a cool research compiled by our friends and partners at Startup Hungaryβ¦
Yep, you have read it right. Partners. Quick side note: we teamed up with Csongor BiΓ‘s and the SH team because we very much share the same goals and admiration for startups and entrepreneurs so if all goes well, and it should, additional good stuff will be delivered to you thanks to this collab β until then check SH via web, Facebook, Linkedin and sign up to Csongorβs monthly newsletter, here.
Now back to my original thought. So I wrote about ππΊ startup insights in ed. #41 and now Change Ventures, a well-regarded VC fund from πͺπͺ, published its research on the Baltic ecosystem, with special focus on funding. According to them:
(β¦) the Baltic Startup Funding Report is a semi-annual publication of detailed data about funding rounds for startups in the Baltics, including companies with HQs elsewhere but with a dominant base in Estonia, Latvia or Lithuania. (β¦) To assemble this report, we have tracked all the venture funding round news in the region and reached out to founders to gather, in confidence, valuation and other investment terms for pre-seed and seed rounds. As a result, we have transaction data for 60% of the pre-seed and seed rounds closed during the past 36 months, so now founders and investors can understand where they stand relative to market transactions.β
Brilliant and super useful material for founders and investors, alike. Check it!
PS: Two takeaways that caught my eye:
During H2 2021 total capital raised by Baltic startups reached almost β¬1B, another record. The funding market is clearly maturing, with growth rounds growing healthily and A rounds doubling vs the prior half year. The number of seed rounds is growing, while the number of pre-seed rounds drop.
Pre-seed round sizes continue a two year steady rise to a median of β¬400k, while median seed rounds are steady at just below β¬1.5M. However, the variance in seed round size is increasing, with the top quartile rounds being twice the size of the median.
The Baltic startup scene is a beast. Punching above weight gets a new meaning on the North. Really inspiring what and how they do as a community π π π