Budapest Letters #49
👋🏻 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 #49, 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: ✍🏻 UK-based payments startup GoCardless announced the planned acquisition of Latvian open-banking platform Nordigen ✍🏻 4Trans, Webshippy and Pergamin raised 💶 ✍🏻 Romania’s The Outfit aims to make online shopping for women more personal ✍🏻 Plural, a newly established VC fund by former and existing startup founders brought fresh air to the 🇪🇺 scene
🔥 Story of the Week
Big news coming out of 🇱🇻 folks…
In case you are not familiar with the companies: GoCardless is a UK-based fintech startup that processes ca. €26B payments across more than 30 countries, including from the likes of Klarna, Xero and TripAdvisor; while Nordigen, the brainchild of Rolands Mesters and Roberts Bernans, is a Riga-based fellow fintech that operates a free open-banking platform that helps its clients understand financial data better (e.g. when assessing creditworthiness of loan applicants).
The deal, expected to be closed by the end of summer, will make GoCardless not only an important player in the payments sphere but also one in open-banking. Financials of the agreement were not disclosed but considering that Nordigen is a direct competitor to red hot startups like Plaid and Tink (recently acquired by Visa for $2B), in a red hot market domain, the deal probably did not come cheap.
But hey, that is how it is. So good for Nordigen’s founders and (hopefully) team. And good for Latvia and the wider CEE startup community. More of this please!
Show Me Da 💶
👏🏻 4Trans, a fintech startup from 🇨🇿, received €3M from Atmos (🇺🇸), Tera Ventures (🇪🇪) and local VC Lighthouse; but it also raised an additional €15M debt financing from Advanced Global Capital (🇬🇧), pushing its total seed funding round to €18M. The company, whose AI-driven factoring solution can provide financing in minutes to supply chain and logistics firms, will use the funding to boost its team, fine-tune its product and expand, for starters to the biggest CEE market, Poland.
👏🏻 Webshippy, a logistics startup from 🇭🇺, bagged €3M from local VC Day One Capital and a bunch of local business angels. The company, that operates an E2E logistics platform that helps e-commerce business in fullfilments, will use the newly raised sum to expand (Slovakia, at first) and enrich its offering.
🧐 Good to know: It will be super interesting to see how Webshippy, a clear leader on its home turf, compete against its regional rivals, like Photoneo (SVK), euShipments (BG), Omnipack and Linker Cloud (both from POL), all of whom raised larger rounds, earlier and thus are already active in more than one CEE markets. But as the age old Hungarian saying goes, it is more rewarding to win from here.
👏🏻 Pergamin, a legaltech startup from 🇵🇱, nabbed €1.2M led by Sunfish Partners (🇩🇪), with participation from FundingBox, a local startup accelerator, and DFRI, a local governmental investor. The startup, that operates a legal platform that clients can use for drafting, negotiating, signing and managing of contracts, will use the fresh raise grow its customer base and further improve its tech.
👏🏻 Additional investment news that you should know about:
WeBoard, an employee training startup from 🇨🇿, raised €400k from Nation 1 VC, a local venture capital firm: more on this via Forbes.cz
Heroify, a skill-testing platform from 🇵🇱, snatched €380k from SMOK and Movens Capital, both local VC funds: more on this via MamStartup
Blackpeak Capital, a VC fund from 🇧🇬, announced the closing of its €126M SEE Growth Fund that will help regional startups; more on this via The Recursive
🥂 to all founders and teams on the fresh raises!
🚨 Startup Alert
This week’s alert is on The Outfit, a fashion startup from 🇷🇴, that offers an online personal styling service to women. While this USP is not unique in its self, what is original is that the platform’s users can fine-tune the service based on individual style, body type and lifestyle. So no one-size-fits-all approach.
How this works in practice?
Users have the option to work with a selected number of stylists that present them products online, fitting their own preferences; for this, within profile setup, customers can also select favorite brands and price ranges.
After this, when product selections were made, clients can try these at home and will only pay for those items that they actually keep.
And that’s about it.
The company, btw, was founded in 2020 by Ciprian Dudulea, Serban Buliga and Horia Stupu (pic below), and as its founders claim, already in its first full year its revenue crossed €800k with ca. 16k orders delivered so not a suprise that the startup managed to raise €750k led by TSG Capital, a US-based investment firm.
🧠 Food
While in 🇺🇸 ex-founders of startups are heavily represented at VC funds, the same is not true for their 🇪🇺 counterparts. By far, that is. But this, even if just a bit, might change thanks to Plural, a new €250M early-stage venture fund started by Ian Hogarth (ex-Songkick), Sten Tamkivi (co-founder of Teleport), Taavet Hinrikus (co-founder of Wise) and Khaled Helioui (board member at various tech companies).
According to the founders of Plural, less than 10% of investors in Europe are former operators, while approximately half of them are in the US. This can, and probably already is, a crucial disadvantage of European startups vs Americans.
Of course, as you wold expect, not all incumbent VCs were overtly happy by the announcement, and especially with the framing of its launch by some media outlets; for example here is Mike Butcher’s piece on TechCrunch:
Oops. You notice that the Twitter lead still contains the original headline (that was later changed) that said Plural will kick the asses of traditional VCs, right 🤣
Well, some VCs did take this to heart, like Pawel Schapiro from TA Ventures:
Honestly, I love it. It is fun to see some action and brawl in startupland / venture finance that is normally a bit dull arena. Not anymore it seems. I do hope that Plural will succeed as it will make the VC landscape more colorful. But I also tend to agree with Pawel that not all ex-founders make good investors, like not all ex-footballers make good coaches. Still, boosting ex-operator numbers at European VCs is more than welcome, and I am super curious what change it will bring.