CEE, with a GDP of €2.56 trillion and housing 167.47 million people in 2024, is a region that contributes to the economic growth and cultural diversity within the EU.
The European Bank for Reconstruction and Development (EBRD) forecasts a 3.2% GDP growth for its regions in 2025. In Central Europe and the Baltic states, GDP growth is expected at 2.7%, while South-Eastern EU countries, including Bulgaria and Romania, are projected to grow by 2.1%. In comparison, Eurozone’s projected average is 1.1%.
Tracking key financial metrics like inflation, debt, and economic health is crucial for understanding regional trends. These factors shape business opportunities and influence market dynamics – essentials for startups and venture capital investors looking to identify opportunities and manage risks, as CEE has 3,800 VC backed startups.
The state of VC and startups in CEE: A report by Eleven Ventures and JEME takes an in-depth look at the state of the ecosystem in the region. Their aim – to showcase the potential, the trends but also the threats in the current startup and VC funding environment.
“By breaking down these financial metrics, investors and entrepreneurs can get a clearer picture of the CEE market and make decisions that drive innovation and sustainable growth,” shared Eleven VC’s representative.
The report is suitable for anyone unfamiliar with the CEE ecosystem and looking for a first overview.
Take a peek at the report findings:
This growth is powered by the region’s unique combination of technical talent, cost efficiency, and increasing innovation capacity. The combined enterprise value of CEE startups reached €213 billion in 2023, representing a 2.4x growth since 2019. The region is now home to 52 unicorns (8% of Europe’s total), with Poland, Estonia, Ukraine, and the Czech Republic emerging as key contributors to this success.
➡️ Sectoral Concentration: Enterprise software dominates the CEE landscape with a combined enterprise value of €80 billion, followed by fintech (€30B), transportation (€19B), and e-commerce (€19B). AI has become a powerful growth driver, capturing 45% of total investment in Q1 2024, while climate tech attracted 26%.
➡️ Public Capital Dependence: Government funding remains crucial for the CEE ecosystem, accounting for approximately 34% of total startup capital in 2023. While public funding has been crucial to the CEE ecosystem, its role may evolve as private investment grows and government priorities shift toward strategic sectors.
➡️ Early-Stage Focus: The region demonstrates particular strength in early-stage funding, with 92% of all VC-backed deals in the pre-seed and seed stages. This pattern diverges from Western Europe’s emphasis on later-stage investments, reflecting CEE’s still-developing ecosystem.
➡️ Pragmatic Approach: CEE founders typically demonstrate a more practical mindset than their Western counterparts, focusing on early revenue generation and profitability rather than rapid scaling and future potential. This conservative approach yields higher capital efficiency but potentially limits ambition.
➡️ Growing Cross-Border Activity: Increasing internationalization characterizes the ecosystem, with 91% of Polish startups planning European expansion and 60% targeting North America. Headquarters relocation to Western markets remains common for scaling companies.
Major trends
Despite global venture capital contraction (down to €248.8 billion in 2023), the CEE ecosystem has demonstrated resilience. While experiencing a 15% decline in deal volume compared to Western Europe’s 35% reduction, CEE startups raised over €900 million in early-stage funding in 2023. International investment in the region continues to grow, with non-European investors increasing their share of total fundraising from 9% in 2022 to 21% in 2023.
Economic forecasts for the CEE are highly optimistic. In particular, development speed vary across individual countries, with Serbia (4.1%), Montenegro (3.7%), and Poland (3.5%) projected to lead in growth rates.
Read more in the report.
