A survey conducted by The Recursive in early 2025 revealed that 62% of CEE investors anticipate a more favorable investment climate compared to the previous year. Investors are particularly optimistic about opportunities in AI, cybersecurity, and deep tech sectors, viewing the current period as an inflection point where short-term challenges coexist with promising long-term growth.
The surprising (but also promising) trend is that the region’s enterprise value is growing faster than in Western Europe, with the CEE startup ecosystem now valued at €243 billion, according to the CEE Startups 2025 report.
Nevertheless, the current instability is impacting the venture capital ecosystem, with economic and geopolitical uncertainty slowing funding. “It’s much harder to raise during a recession — VCs are focused on protecting their portfolios,” Robert Herscovici, Investment Director at GapMinder, recently shared.
How are VCs approaching investments today? We see Q1 of 2025 as a window into the region’s shifting dynamics – where capital is being deployed, which sectors are heating up, and which investors are taking the stage. In the following analysis, we reflect on the quarter from our perspective as active participants in the CEE venture space. The spotlight is for CEE-focused VC funds, investing in regional ventures, with rounds over €1M.
Cybersecurity and AI set the pace in January
January was marked by strong early-stage momentum and a clear focus on cybersecurity and AI-driven platforms. Leading the month was Poland’s Fudo Security, raising €9.4 million from bValue Growth Fund to expand its privileged access management solutions.
Two Croatian startups, OUTFINDO and Hypefy, each closed €1.7 million rounds, both backed by Interactive Venture Partners, making the firm the most active VC of the month. Their double-down on influencer marketing automation signals a growing interest in niche AI verticals.
J&T Ventures also made moves via their investment in Wultra, a Czech startup building post-quantum authentication tools. Their co-investors included Tensor Ventures and Elevator Ventures, pointing to rising demand for financial-grade cybersecurity in the region.
SMOK Ventures kept up its consistent early-stage strategy, leading a pre-seed round in Poland’s Wonder Legends Studio, a transmedia gaming startup, and participating in Ukraine’s LetsData, a disinformation-fighting AI firm.
Other active firms included PortfoLion and Fil Rouge Capital, showing a strong appetite for B2B AI and SaaS-focused plays across Hungary, Romania, and Croatia.
A regional investor, remaining anonymous, shared previously for The Recursive: “The AI hype cycle is messy, but B2B AI startups that help businesses cut costs and improve efficiency are getting real traction.”
Local funds co-investments
February witnessed larger Series A and B rounds, with Polish robotics startup Nomagic securing one of the largest rounds this year, €42 million.
Catalyst Romania took part in two major rounds. The fund co-invested in Footprints AI and had earlier backed .Lumen, a startup developing AI-powered glasses for the blind.
Bulgarian LAUNCHub Ventures drew attention through its participation in Bulgarian-founded UVIONIX, a company developing autonomous AI-powered drones for inventory monitoring. Their co-investors included local presence from Budapest-based PortfoLion and Bucharest-based Underline Ventures.
On the global side, True Ventures and Play Ventures co-led a surprising €13.4 million Series A into Romania’s Bible Chat. This round was joined by Romanian Early Game Ventures and Underline Ventures, as well as Slovenian Silicon Gardens.
Rockaway Ventures, a newer fund from Rockaway Capital, entered with a smaller but strategic ticket into US-Slovakian CulturePulse.
J&T Ventures doubles down on health and logistics
In March, J&T Ventures appeared to be among the more active VC firms in the region. They made back-to-back investments in Austria-Hungary’s XUND (AI-powered medical diagnostics) and Czech Republic’s Grid.online (logistics cloud network).
Their involvement wasn’t isolated either — J&T had already invested in Wultra in January, making them one of the few firms to show consistency across all three months.
KAYA VC, Inovo VC, and RIO ASI co-invested in the €12 million round for Poland’s Jutro Medical, another indicator of VCs leaning hard into AI-driven healthtech. This round also involved a debt component from mBank.
PROfounders, Day One Capital, and Keen Venture Partners teamed up for Hungary’s Qneiform, continuing a trend of UK and Dutch firms collaborating with CEE-based investors on AI-enabled HR and talent tech.
Another significant AI investment was the €6.49 million round in seed funding for Croatian SplxAI, backed by a couple of local VCs – LAUNCHub Ventures, Inovo, and South Central Ventures, together with other international investors.
AI remained the dominant theme, whether in medtech, talent analytics, or cybersecurity, while cybersecurity and defense are on the growth trajectory.
“Even in a downturn, businesses cannot afford to cut corners on security. Startups that can automate security workflows or provide better threat intelligence are in a strong position,” pointed out Bogdan Pasca from Early Game Ventures, previously for The Recursive.
