Search for...

Romanian startups raised three times more capital in 2021

Bucharest, Romania, Canva
Image credit: Bucharest, Romania, Canva
, ~

In 2021, Romanian startups raised a three times larger volume of capital compared to 2020, going from €30M to more than €116M, according to the recently published Romanian Venture Report 2021 by How to Web, a leading European conference on entrepreneurship and innovation. With a 13x increase from 2017, the growth has now been trending for several years.

The total number of transactions in the market has also increased with 20%, reaching 71. The report only tracks equity investments of companies with Romanian headquarters

“Romanian startups were empowered by the local success stories such as UiPath (born in Bucharest and IPO-ed in the US) and more recently by the spectacular growth of FintechOS. Founders can articulate a clearer vision of growth for their companies and products and can attract the right investors in their journeys,”Alexandru Agatinei, CEO of How to Web tells The Recursive.

Below, The Recursive summarizes the key findings from the report. More insights to follow soon.

The geographic boundaries to building tech success stories are fading

For the first time, the total Romanian venture capital volume reached a three-digit figure, showing signs of maturity. The market grow rate is keeping pace with the European standard. According to Pitchbook, European startups raised €100.4 billion across 9,419 deals by December 2021, up 115% from 2020.

Yet this should also give the perspective that there is room for VC funding to grow in the region. CEE accounts for just 5% of all funds in Europe, despite representing 10% of the European GDP and 27% of the population, Alexandru Agatinei explains, adding:

“I believe now that smart investment, a good understanding of the marketplace, a solid growth plan, and founder determination are more important than where you are based. Last year showed that the region can offer many more success stories in the upcoming years – just looking at our next-door neighbors, Bulgaria, well done to Payhawk ($132M raised) and Gtmhub ($150M raised) to name a few of the startups that are moving the needle.
Renowned European investors, such as Irina Haivas (Atomico), Carlos Espinal (Seedcamp), or Ondrej Bartos (Credo Ventures) emphasize that this is the time for European founders to thrive and that there are no real geographical boundaries when it comes to building successful tech companies.”
Alex Agatinei, CEO of How to Web
Alex Agatinei, CEO of How to Web

Early-stage deals grew in volume and average transactions

Consistent with international VC trends, Romanian startups have raised a bigger first cheque, with an average of €647K in 2021 from €357K in 2020. The total transaction volume at early stages has also increased by ~70%, showing a growing investor confidence in financing new projects.

Read more:  Vote For The Future Shaper 2022 in Central and Eastern Europe and Win Awards at Wolves Summit Vienna

At the pre-seed stage, the average deal size also increased by 33% to €163K. But the biggest growth was seen at the seed stage. Both the total transaction volume and the average deal size have doubled to €47.37M and €1.07M, respectively.

Later stage deals and follow-up investments are accelerating

Series A transactions also increased by 30% vs. 2020 to three transactions in total, led by crowdfunding platform SeedBlink’s €3.01M Series A. By comparison, the average Series A round at the European level sits at €11.4M, showing an opportunity to increase capital at this stage.

The mega deal of the year was made by FintechOS, with a €51M Series B round led by Draper Esprit. Yet other startups raised significant amounts, too, with 68% of total investment volume represented by rounds above €1M. These include FLOWX.AI with €7.28M seed money, crowdfunding platform SeedBlink with €3.01M Series A, influencer marketplace FameUp with €2.6M seed round, and chatbot platform DRUID with €2.5M.

Founders at later stages facing scaling goals also received more support from investors, with a 157% increase in overall volume of follow-on investments vs. 2020, reaching 43.35M.

Finally, 37% of all capital raised and 79% of the total number of transactions were represented by Romanian capital. This represented twice more Romanian capital raised vs. 2020, while international investors brought around 10 times more capital vs. the previous year. Romanian investors participated in 14 of the total 18 deals with international capital.

+++Take a peek at how the Greek startup ecosystem grew in 2021. +++

Thank you for reading The Recursive!

Over 1 million people from all over the world have learned about the tech ecosystem in Central and Eastern Europe thanks to The Recursive. In order to keep our content free for everyone, we need your help. If you believe what we do is important and have the means to do so, support us in giving a voice to Central and Eastern Europe with as little as €7. Thank you!

DONATE Keep reading this article

Help us grow the emerging innovation hubs in Central and Eastern Europe

Every single contribution of yours helps us guarantee our independence and sustainable future. With your financial support, we can keep on providing constructive reporting on the developments in the region, give even more global visibility to our ecosystem, and educate the next generation of innovation journalists and content creators.

Find out more about how your donation could help us shape the story of the CEE entrepreneurial ecosystem!

One-time donation

You can also support The Recursive’s mission with a pick-any-amount, one-time donation. 👍

Antoanela is a Sustainability Communications Specialist and Deputy Editor at The Recursive media. From these roles, she is helping organizations communicate their latest sustainability goals, strategies, and technologies. She writes about climate tech, ESG, impact investment, sustainability regulation, and related topics.