Central and Eastern Europe (CEE) has emerged as a hotbed of innovation and investment in the rapidly evolving deeptech industry. Investments in various development stages have marked the year 2023. We followed up with startups from our Deeptech Ecosystem Map from last year to see who has been actively investing in Poland, Slovakia, the Czech Republic, and Hungary in the deeptech.
In 2023 over EUR 224 728M was invested in deeptech in the Central and Eastern Europe region in disclosed rounds with the following share between each stage:
- Late Stage: EUR 48.216M with 9 rounds
- Early Stage: EUR 140.25M with 8 rounds
- Seed Stage: EUR 34.15M with 17 rounds
- Pre-Seed: EUR 2.12M with 6 rounds
- Undisclosed were 7 rounds
Among the most active deeptech investors are all: VC, CVC, and governmental agencies.
- EUSPA (European Union Space Programme Agency): 4 investments investments
- Taiwania Capital: 3 investments investments
- APER Ventures: 3 investments investments
- EIC Fund (European Innovation Council Fund): 5 investments investments
- Slovakia Venture to Future Fund: 3 investments investments
- Level2: 2 investments investments
- Crowdberry: 2 investments investments
- Cassini Business Accelerator: 2 investments investments
- CASSINI Initiative: 2 investments investments
Which countries in the Central Europe region lead in deeptech?
Polish Pioneers in Food and Energy Tech Innovations
Poland has emerged as a hub for innovative startups in sectors like food and energy. Noteworthy investments include companies like Inuru and EcoBean. The former secured a remarkable €10 million investment from both industry angels and pharmaceutical CVC (as well as yours truly), reflecting strong industry support and investor confidence in Polish founders’ deep tech scene.
Hungary’s Potential in Deep Tech
Although data specific to Hungary might not be prominent in the dataset, it’s crucial to recognize the growing interest and potential within the country. The Hungarian deep tech sector, while in nascent stages, is poised for growth, inviting investors to explore untapped opportunities.
Czech Republic Remains a Leader in VR Technologies
The country has made notable strides, particularly in virtual reality. VRgineers stands out with its early VC funding of €5.38 million, showcasing Czechia’s strength in creating cutting-edge technological solutions and attracting substantial investments.
Not so Quiet Slovakia
Slovakia, though not extensively represented in the dataset, is an emerging player in the deep tech arena. With its growing startup ecosystem and supportive policies, Slovakia is gradually becoming a significant destination for deep tech investments.
At what stage should you coinvest in Central Eastern Europe?
Late Stage—The Big League
One of the largest groups of investments, late-stage funding, where ticket sizes exceed $10 million USD, is dominated by a combination of venture capital firms and strategic corporate investors. Entities include BOLD and Karma.VCs not only provide capital but also bring strategic expertise to the table. This level of investment is usually reserved for scaling operations, international expansion, and refining go-to-market strategies, indicating a mature product-market fit and a clear path to profitability.
Early-stage investments, ranging from 5 to 10 million USD, are critical because they often serve as the link between a validated product and market scalability. Investors such as MILLENNIALS Venture Capital and Quantic by TAIWANIA use their funds to promote growth and innovation. Incubators and accelerators in this space, such as PRUSZYŃSKI and Nation1 VC, offer mentorship and industry connections in addition to financial support.
The seed stage, which is defined by investments ranging from 1 to 5 million USD, is where the fundamental elements of deeptech companies are developed. It is a stage characterised by high risk and high potential for return. Bioactor and NutriLabs are likely to be in the product development stage, with a focus on technological validation and early-market entry. The diversity of investors, ranging from specialized funds like APER Ventures to regionally focused entities like CLOUDBERRY and JR Holding, demonstrates the strategic importance of supporting emerging technologies that have the potential to disrupt markets.
Pre-seed investments of less than $1 million USD indicate a high-risk, high-reward proposition – yet clearly did not attract many investors. Those who decide to invest, such as Altamira or JRHolding, are frequently startups’ first external equity backers and their support is critical during the ideation or prototype stage.
Pre-seed deeptech funding in 2023 saw a significant increase compared to previous years. According to Dealroom, the total amount of pre-seed funding for deep tech companies in Europe increased by 40% in 2023. Yet, still difficult situation of deeptech at this stage was driven by a number of factors, including:
- Deep tech is often seen as a riskier investment than other types of startups, but it also has the potential for high returns.
- This is because deep tech companies often need more time to develop their products and technologies than other types of startups.
- The lack of dedicated pre-seed funds for deep tech companies is which makes it more difficult for these companies to raise money.
Here are some of the key trends in pre-seed deeptech funding in 2023:
- Focus on foundational technologies: Investors are increasingly interested in companies that are developing foundational technologies, such as artificial intelligence, machine learning, and robotics. These technologies have the potential to be used in a wide range of applications, and they are becoming increasingly important for the future of the economy.
- Emphasis on user experience: Investors are also placing a greater emphasis on user experience in deep tech companies. This is because deep tech products often have a more complex user experience than traditional products, and investors want to ensure that companies consider making their products easy to use.
- Global opportunities: Deep tech companies increasingly seek to expand into global markets. This is because there is a growing demand for deeptech products and services in all parts of the world.
The Foreign Investment Landscape in the CEE
Across the Atlantic, American investors such as Qualcomm Ventures and Cultivian Sandbox bring capital and global market access, regulatory insights, and technology transfer capabilities to the CEE deeptech scene. Their participation indicates a readiness for global expansion and brings to the table much larger tickets. Asian investors, such as LG Electronics and SAMSUNG CATALYST FUND got interested in the CEE region – although clearly later stage funding.
Aper Ventures backs deep tech and hardware firms with global potential. The team launched Meta Ventures in 2014 with 100 million PLN, investing in 20 companies. As of 2019, it invests under Aper Ventures alongside Aper Angels’ network. The fund has invested 130 million in assets since 2019. Inuru, Reef Factory, and VUMO AI are among its companies.
To learn more about our mindset behind deep tech investment learn about our portfolio company – The Batteries.
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