Budapest Letters #12
👋 Hi All! Great to have you back! Before we jump in, big shout out to our new subscribers, good to have you on board. And more thing before we roll, if you like what you read, subscribe to Budapest Letters (if you had not done it) and spread the word.
Cheers, Aron
📢 TL;DR
Top stories this week: ✍️ Klein Vision’s flying car completed a 35 minute test flight from Nitra to Bratislava ✍️ Sonarwork, Nethone and Eurora Solutions raised 💵, ensuring another big week for Baltic startups ✍️ Single.Earth, also from the Baltics, re-thinks the fight against climate change with tokenization ✍️ New report sheds light on the impact of COVID-19 on the Romanian startup scene
🔥 Story of the Week
AirCar, a hybrid car-aircraft developed by Klein Vision in 🇸🇰, succesfully completed a 35 minutes test flight from Nitra to Bratislava. Yes, you read it right, like a vehicle straight out of a James Bond movie. Futuristic, to say the least.
According to Stefan Klein, its maker, the AirCar’s total development cost was ca. € 2M; not a crazy sum, especially compared to self-driving car research projects.
So keeping this in mind and the fact that based on an estimate by Morgan Stanley, an investment bank, the flying car market could be worth $1.5 trillion by 2040, Klein Vision is well positioned to be a leading player in this field. Impressive.
Show Me Da 💶
👏 Sonarworks, an audio software maker from 🇱🇻, raised €5M from investors, led by Almaz Capital. According to the company, the fresh money will be used for international expansion (US and Asia) and to enhance its audio precision technology, making integration with consumer electronics devices smoother.
👏 Nethone, a fraud prevention startup from 🇵🇱, closed a €5.6M funding round led by Aria and Atmos Ventures, well regarded local VC firms. Funding will be used in two ways: firstly, to strengthen its existing technology and secondly, to expand. And considering that e-commerce (i.e. Nethone’s focus) is a dramatically growing area, and along with it fraudulent activity, the company’s outlook seems bright.
👏 Eurora Solutions from 🇪🇪, another e-commerce software startup, bagged ca. €2.5M from investors, led by Change Ventures. Eurora’s solution assigns HS codes to e-commerce product transactions, calculates appropriate VAT and duty amounts, and automatically creates electronic declarations for EU duties and taxes. Which is 🔥 for large marketplaces operating outside the EU, especially considering the new EU trade rules that put huge burden on non-EU merchants.
Congrats to all teams!
🚨 Startup Alert
Single.Earth, a crypto startup hailing from 🇪🇪, aims to offer a completely new and cutting-edge approach to help tackling the negative and ever growing effects of climate change. Their solution is simple: they tokenize valuable lands based on how much CO2 they can absorb and provide these, so-called MERIT tokens, to landowners whom can sell or trade them on their propriatory marketplace.
This is great in many ways but two crucial adventages stands out: first, this approach incentivizes caring for ones land (i.e. forests, wetlands) which would otherwise be sold or neglected; and two, this makes it possible for individuals to invest in instruments that, while delivering profits, help nature heal 👌
PS: And just how great the company’s solutions is, roughly 2 weeks ago it raised a seed round worth ca. €6.9M, led by EQT Ventures from 🇸🇪, one of thes biggest in the countries history + cherry on top: it also a women lead startup with Merit Valdsalu as its co-founder/CEO (✅ interview with her on Single.Earth’s origins).
🧠 Food
ROTSA (Romanian Tech Startup Association) recently published a cool and gap filling report on the impact of the COVID pandemic on the 🇷🇴 startup scene. Thankfully though, the questionnaire behind this report not only focused on the impact of COVID but also on profiling the surveyed 130+ businesses / industry.
In this light, selected main findings are as follows:
The pandemic’s effects were very non-linear depending on the industry and on the start-up size, however over 70% confirmed some effect re: COVID.
Most thriving local start-up ecosystems: Bucharest, Cluj, Timiș and Bihor.
Study revealed a Romanian tech start-up profile: locally incorporated, under 4 years on the market, max. 4 employees and €150K annual turnover.
Biggest startup employers/industry: Fintech (35.2%) & Automation (35.2%)
Self-financing is main source of funding, while 36% raised private funds.
When making decisions to mitigate the impact of the pandemic, founders consulted with the entire team (50%) or the advisory board, mentors, and coaches (49%), while 39% took advice from other entrepreneurs.
Romanian start-ups are identifying and pursuing opportunities in markets such as North America and South-East Asia = but currently their main outside markets are in Europe, principally France, Spain and Italy.