In the first quarter of 2024, global startup funding decreased to the second-lowest level since 2018, amounting to only $66 billion, representing a 6% QoQ increase but a significant 20% YoY decrease. Meanwhile, after significant growth from 2014 to 2021, European startup funding has stabilized at pre-2021 levels following a surge in 2022.
AI maintained a top sector for investment, representing approximately 17% of global funding, according to the latest VC funding in CEE 1Q24 report presented by Vestbee. AIN analysed the report and shares the key points.
VC investment trends in CEE
- In the past five years, the value of startups in the Central and Eastern Europe (CEE) startup ecosystem increased from €89 billion in 2019 to €213 billion in 2023.
- However, the number of funding rounds dropped between Q4 2023 and Q1 2024. The overall investment volume remained stable, with a slight increase in Q1 2024.
- In Poland, there has been a noticeable decrease in venture activities, particularly among seed funds backed by public capital, highlighting their crucial role in the market.
- The availability of VC funding remains much better than it was pre-2019, although difficulties in securing financing are expected to continue into the second quarter.
Startup investment rounds in CEE in Q1 2024
- Number of funding rounds: 157 (134 fully disclosed in terms of amount, month, investors, and company details);
- The biggest disclosed investment rounds:
- Mews closes Series D round of €101.3 million;
- Project 3 Mobility receives €100 million in a Series A round;
- Starship Technologies raises €84.6 million of funding;
- Bob W closes Series B round of €40 million;
- CloudTalk raises Series B round of €26.3 million;
- Tuum received a €25 million in a Series B round.
- Total value of funding closed in CEE is over €640 million.
- Estonia leads with 31 funding rounds, followed closely by Poland with 30 rounds, and Czechia with 18 rounds.
- The most active VC funds were: New Vision 3, Credo Ventures, EIT Digital, Vitosha Venture Partners, Presto Ventures, FundingBox Deep Tech Fund, Inventures, Launchub Ventures, Movens Capital, PortfoLion Capital Partners, Practica Capital, Tera Ventures, Baltic Sandbox Ventures, CofounderZone, KAYA VC, Sunfish Partners, Techstars, ZAS Ventures, Coinvest Capital, DEPO Ventures, DOMiNO Ventures, Inovo VC, J&T Ventures, N1 Fund, Reflex Capital, Startup Wise Guys, Taiwania Capital.
- Enterprise Software, AI, fintech, healthcare, energy, SaaS, cloud are among the most popular industries for VC investments.
New VC funds from CEE in Q1 2024:
- OTB Ventures raised its second deeptech fund, amounting to $185 million, targeting Series A investments, with a small portion (up to 10%) designated for seed investments.
- Lithuanian-based Practica Capital finalized its third fund at €80 million, focusing on seed-stage tech startups in Lithuania, Latvia, and Estonia. This fund provides initial investments up to €3 million and can offer additional support up to €8 million.
- SMOK Ventures from Poland secured its second fund, valued at $25 million, aiming to support approximately 35 pre-seed and seed-stage startups across Central and Eastern Europe, including regional founders operating abroad. Investment amounts from this fund typically range from $100,000 to $1 million.
- Romanian GapMinder launched GapMinder Fund II, an €80 million venture capital fund. This new fund is dedicated to investing in seed and late-seed stage tech companies in Romania, Moldova, Serbia, Croatia, Slovenia, and Bulgaria.
You can also read the highlights of the CEE market report of 2023 prepared by the Vestbee team:
