Central and Eastern European startups - under the radar, but flying high

Special thanks to Valentina of Founder's Factory for helping me with some research on this topic.

Having a digital business means you can set it up anywhere - from the wilderness of northern Norway to the beaches of Tangier in Morrocco. However, most digital startups still congregate around the hubs of Paris, Berlin, London, and Barcelona. Access to funding, incubators, conferences, and possible M&A options mean that digital businesses are still location-bound.

That has not deterred entrepreneurs from outside the main startup hubs from setting up global businesses. Many of the barriers to setting up a startup outside the hubs are actually the positive points. Lack of funding means they have to become cash flow positive as soon as possible. Lack of locally available talent means they learn how to work as lean, agile businesses. And lack of B2B clients and business partners within their vicinity means they have to promote and market themselves more aggressively.

That is why a wide range of Polish, Hungarian, Romanian, Czech, Slovak, Slovenian, and Croatian startups have been on the rise, occupying a vacuum in underserve fields such as software for industrial automation to developer tools for niche technological areas. Their progressive is impressive, considering most are bootstrapped and have teams half the size of their Western equivalents.

SaaS and developer tools

Many people are aware that Eastern Europe is filled to the brim with app development agencies, who take over the repetitive testing and integration work and charge good money for it. The reason for the increasing number of agencies is that this process can only be done manually, and can not be avoided. That is when a group of Hungarian developers realized it is better to make this time-consuming process easier and simpler. That is how Bitrise was born - a platform for automating app testing and integration, so that devs can focus on coding and not the manual processes that come with creating an app.

Bitrise is easily the most successful Hungarian startup - it is the only Hungarian startup to have entered the Y Combinator and then raise three rounds of financing from international investors. Unlike most venture funded startups, they were profitable from first year and then tripled their sales each year.

It is not only app testing that has been simplified by Eastern European startups. Even building 3D models, without prior expertise has been simplified by VECTARY. This new model designing tool from Slovakia allows you to build 3D models inside your browser and have them saved inside the cloud.

Meanwhile, UK/Bulgarian startup Gtmhub is getting renown for helping its customers focus and align teams to support company goals by setting and managing OKRs, or Objectives and Key Results, supported by live KPIs from any business system. Gtmhub informs us that its customers achieve 86% goal attainment after implementing its SaaS solution, and that its customer base includes SAP, Techstars, and many other startups and larger enterprises from every continent.

Online platforms and marketplaces

Once a marketeer wanted to publish her thesis on how music affected the image of a country. Unfortunately, she had no means at her disposal. So what did she do? She created the book publishing platform herself?

That was the brilliant idea of Kinga Jentetics, the Hungarian founder of PublishDrive, an ebook publishing platform powered with business intelligence, artificial intelligence and machine learning to increase ebook sales globally. Her first test pilot was with her own book which managed to receive purchases in Brazil, Mexico, and China.

Today, PublishDrive works with 900 publishers in over 40 countries, and also offers its own marketing and intelligence tools to get the widest audience.

Outside of the publishing sector, some startups are trying to make a dent on the travel sector. One good example is GoAvio, from Slovenia.

Let's say you want to go from Ljubljana to Amsterdam. Most people do not know this, but they can fly from Ljubljana to Brussels using Wizzair, and then take a bus from Brussels to Amsterdam, and pay only 50 euros for the whole trip. Unfortunately, there is no single resource for finding this out. Except GoAvio.

GoAvio was created to find the flight, train, and bus combinations that could get you the shortest and cheapest routes between two cities in Europe. Think of it as a Skyscanner that combines flights, buses, and trains in one.

Industrial hardware and automation / deeptech

Most 3D imaging systems use multiple cameras and specialized processors to create an image of an object. A new kind of laser scanner now exists that uses structured laser light. The result is a high-resolution 3D image as you can see in the picture. 

 The technology has been pioneered by the Slovak 3D machine vision company Photoneo, who recently inked an agreement with Multipix and is expanding globally very quickly. Last year, Photoneo opened their office in Shanghai, and 2018 is to mark their growing presence also in the US.

The structured light projection projects one or more patterns onto the scene, thus greatly simplifying computations to calculate the 3D surface geometry. Photoneo? PhoXi? 3D Scanner thus allows fast 3D scanning, with low noise, high accuracy, large scanning volume and is easy to integrate.

PhoXi? 3D Scanner was developed with the aim to advance automation and is widely used in industrial and robotic applications (object handling, 3D matching). Besides the top-notch hardware, Photoneo customers receive the PhoXi Control application. Those implementing robot navigation and object handling projects acknowledge the quality of Photoneo's localization SDK. Photoneo is a provider of complete bin picking solutions, the well-known automation application compatible with all major robot brands.

Meanwhile, in Slovenia, a group of inventors came up with an ingenious solution to have a network available anywhere and everywhere through a simple portable device that creates its own network. That is the vision of Gotoky, Its founder launched a Kickstarter for this idea when he was hiking in the mountains and discovered there was no way to call for help. That is how he came up with a device that when paired with a smartphone can send and receive calls and texts anywhere in the world.

Cybersecurity is also getting an upgrade in the east. Czech startup Greycortex offers an AI called MENDEL that detects hacking threats and protects them from not covered by normal security products by using behaviourial analysis on the entity that enters the networks. Without needing human intervention, it acts against any entity which seems unusual in its pattern of actions.

This startup was so successful, it launched an Asian office by opening a branch in Japan. and is building alliances with major cybersecurity leaders in the industry.

As you can see, there is an entire world of startups east of Berlin that are changing the landscape for technology, and many of them do not even have a serious competitor in the West. While the funding and talent handicap means these companies are competing with one hand tied behind the back when compared to their western rivals who can hire developers for six figure paychecks and eight figure rounds, it is also clear that if their western rivals ignore them, they are being very complacent.

Are you an investor looking to scout startup opportunities in Eastern Europe? Would you like to find potential partners and clients in this region? Or are you trying to expand business intelligence on this region? If any of these, send me a connection request and drop me a message straight away!