Budapest Letters #48
ππ» 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 #48, 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» Rohlik Group, despite the troubles affecting on-demand grocery startups, managed to raise an additional β¬220M βπ» Ataccama, NFTPort, Nevomo and Leafood raised πΆ βπ» Polandβs fyrtel.market aims to bring a fresh approach to same day delivery services βπ» Sifted, an online mag, published a fresh startup report that ranks 100 soon-to-be unicorns from πͺπΊ
π₯ Story of the Week
Inflation, a war in Ukraine, plummeting crypto and stock markets, brutal layoffs at startups across the globe as financing is drying up. Sheesh. Bleak times for founders. Nonetheless, not all is bad. Just look at the Rohlik Group from π¨πΏ that managed to raise a cool β¬220M led by Sofina, a Belgian investment company.
The startup, that currently operates in three Central European capitals (Vienna, Prague, Budapest) and two big German cities (Munich, Frankfurt), is targeting further expansion both within (Bucharest) and outside CEE (Milano, Madrid) despite the on-demand grocery segment experiencing serious financial woes.
JOKR, Gorillas, Getir are all in deep π© but not Rohlik. Why? My 10 cents:
Not competing in instant delivery but in a market with more realistic time slots and more valuable products (i.e. meat, fruits) that customers are willing to wait for; for a bag of candy and a Coke no one waits 3 hours.
Expansion is more gradual and better planned; as you see above the company targets capitals, chiefly, and few larger cities / country, max.
Offering incorporates local brands, many of them being small local producers, that customers adore because they are harder to find.
So whatβs next for the startup? Launching in 3 new cities (incl. 2 new markets), fine-tune technology, grow team and become profitable on a Group-level. On this latter KPI, which is more important than ever in this market climate, Rohlik is not bad, either. In Hungary and Czechia, according to themselves, they already reached it. In the other cases, they are steadily progressing to get there.
But, before getting to excited, we also need to note that up until now the startup raised ca. β¬500M on a similar annual revenue level with a valuation of β¬1-1.5B. This looks much better than JOKRβs or Getirβs. However, it is also far from rock solid. Hence, the next 1-3 years should be about putting Rohlik on a sustainable financial path so as it becomes one of the few large on-demand providers that remain afloat after the bloodbath that we will likely see in the coming years.
Show Me Da πΆ
ππ» Ataccama, a data management scale-up from π¨π¦ with π¨πΏ founding team, received β¬142.5M from Bain (πΊπΈ). The company, whose platform helps to identify, connect, clean and enrich data of entreprise clients, will use the funding to boost its team and fine-tune its product; fun fact: until now they were boostrapped.
ππ» NFTPort, an NFT infrastructure startup from πͺπͺ, bagged β¬23.6M co-led by local VC Taavet+Sten and Atomico (π¬π§). The company, that operates a one-stop shop for building and launching NFT applications, will use the newly raised sum to expand globally and become an infrastructure leader in the NFT space.
ππ» Nevomo, a railtech startup from π΅π±, nabbed β¬17.5M (β¬2.5M + β¬15M) from the European Innovation Council. The startup, that develops magnetic rail (or MagRail) system technology, will use the fresh raise to fine-tune and improve its tech.
ππ» Leafood, an agrotech startup from π±πΉ, snatched β¬6.45M led by Nils Peter Pretzmann, a business angel and founder of both Farmerβs Circle and Baltic Food Republic, with the participation from YesHealth Group (πΉπΌ), a fellow agrotech company. The startup, that builds vertical farms, will use the money to finish its very first farm in Vilnius that is estimated to produce 1k vegetables / day.
ππ» Additional investment news that you should know about:
Future Fund, a crypto investment startup from π΅π±, raised ca. β¬3.6M from undisclosed investor or investors: more on this via MamStartup
Roibox, an adtech startup from π±π», snatched β¬2M from BlackSheep Ventures, an Italian VC fund: more on this via Labs of Latvia
Hintech, a data analytics startup from π΅π±, bagged β¬219k led by local VC SpeedUp Venture Capital Group: more on this via MamStartup
3VC, a venture capital firm from π¦πΉ, will launch its 2nd, β¬150M fund to support DACH and CEE startups: more on this via Trending Topics
π₯ to all founders and teams on the fresh raises!
π¨ Startup Alert
This weekβs alert is on fyrtel.market, an on-demand grocery startup from π΅π±, that operates a same day delivery service in 3 Polish cities (Warsaw, Poznan, Wroclaw).
The company was founded by Michal Logwiniuk and PaweΕ GΕogowski in 2020, and currently it connects ca. 200+ local (mostly small) stores with consumers. Since its inception, according itself, the platform has grown by 500% YoY and has generated roughly 50k orders to date. Pretty strong growth rate, especially considering that fact that it was launched in the midst of the COVID pandemic.
But yeah, I know. You could easily tell me βAron, hold on a sec, you wrote above that instant grocery startups are in a rock and a hard place so whatβs up with this fyrtel hype?β, and honestly, you are not wrong. This is a cut throat business segment. Still, I am fairly confident that fyrtel.market, like Rohlik, might also have what it takes.
Reasons for my optimism are threefold:
Firstly, because it focuses on high-end/artisanal products; not large factory made junk stuff. Premium, if done right, always delivers good returns.
Secondly, because it connects consumers with local producers whom otherwise would be out of reach to them (e.g. brick and mortar shop to far / local supermarket not holding their products / limited time to shop).
And lastly, it delivers goods via an eco-friendly way (i.e. bikes) and it also offers users one cart option (i.e. no need to separately select and pay for products from various producers) with no minimum delivery limit.
So I am really rooting for Team Fyrtel, hope my hunch will become reality!
π’ PS: Besides myself, and certainly more importantly, Movens Capital, a respected local VC firm, and local business angel community CofounderZone also believe in fyrtel.market and its proposition which they recently sealed with an β¬850k invesment.
π§ Food
Sifted, an online magazine dedicated to European startups, published an interesting report called Europeβs B2B rising 100, a comprehensive analysis that aims to list those startups that might be able to reach unicorn status soon.
As usual, I will not go into the nitty gritty details, just drop a small teaser from Siftedβs very own Federico Scolari - and the rest you should check for yourself:
UK, Germany and France are home to most (69%) selected startups, followed by the Nordics. Their respective capitals are the hottest hubs, although Amsterdam, Munich and Bristol boasted a few appearances.
Deeptech, was the most backed sector, with an average of $173m in total funding, followed by HR tech and Fintech. Large cheques for companies such as Wandelbots, Isar Aerospace and ICEYE contributed to the sectorβs funding prominence, but fintech and enterprise tech still retained top spots for both overall funding and the number of startups featured.
Majority (79%) of the soonicorn cohortβs latest fundraising rounds are either Series A or Series B, reflective of young startups growing at significant traction.Β
TL;DR Startups from the CEE region (or with deep roots here) that were listed are kevin. (π±πΉ), Tenderly (π·πΈ), Gtmhub (π§π¬), Resistant.AI (π¨πΏ), SEON (ππΊ), Katana (πͺπͺ), Lokalise (π±π»), Fonoa (ππ·), ICEYE (π΅π±) and Rossum (π¨πΏ). Huge congrats to all teams!