Budapest Letters #15
π Hi All! Great to have you back! This is Budapest Letters, a newsletter covering startup and small business stories from Central and Eastern Europe, or interesting developments that might have something to do with this part of Europe. I do hope you enjoy it!
Before we jump into this weekβs edition, big shout out to our new subscribers, good to have you here. And one more thing before we roll, if you like what you read, subscribe π
Cheers, Aron
PS: Next week and the week after Budapest Letters will be out. Well deserved vacation, before gloomy autumn hits. Edition #16 drops on 6 September. Take care people!
π’ TL;DR
Top stories this week: βοΈ CEE economies expanded strongly in Q2 with Hungary, Slovakia and Poland leading the region βοΈ Mahana Therapeutics, HUGO.legal, Trickest and Spaceit raised π΅, while Avast is set to be acquired for $8.6 billion βοΈ EU-Startups, one of the leading media sites for European startups, collected the most promising companies from Warsaw, Bucharest and Vilnius βοΈ Balaji Srinivasan gave a superb interview to Sotonye, a popular writer on Substack
π₯ Story of the Week
Despite a looming 4th wave of COVID, the week also some good news when the fresh quarter-on-quarter growth rates were published for CEE economies.
According to figures, ππΊ saw the biggest expansion with 2.7% from the April to June period, with πΈπ° (2.0%) and π΅π± (1.9%) coming in at 2nd and 3rd, respectively.
In terms of year-on-year terms, again ππΊ leads the region with 17.9% growth, with π·π΄ trailing its next door neighbour with an impressive 13% growth rate.
Of course, while we can and should be proud of these results, it must be underlined that CEE economies declined sharply when the worst days of the COVID pandemic hit Europe, meaning the base to grow from was not high.
Still, one must compliment where its due and I feel (slightly biased, for sure), that CEE is taking off and if all goes well, growth will even expand in Q3 and Q4.
Show Me Da πΆ
π Avast, a popular cybersecurity software developer from π¨πΏ, is set to be acquired forβ¦ wait for itβ¦ a sexy $8.6 billion by NortonLifeLock, a πΊπΈ competitor. The soon to be established new entities president will be OndΕej VlΔek, the current CEO of Avast, while the founders of the Czech company, Pavel BaudiΕ‘ and Eduard KuΔera, will solidify their seat on top of CEEβs imaginery βMt. Olympusβ for tech visionaries. An unbelievable journey that started in 1988, under communism.
π Mahana Therapeutics, a digital health startup from πΊπΈ, bagged ca. β¬52M, led by Jazz Venture Partners and Gurnet Point Capital, local VC firms. But the interesting case with Mahana is that one of its lead investorβs (JazzVP) main shareholders are KKCG, the investment group of π¨πΏ billionaire, Karel KomΓ‘rek.
π HUGO.legal, a legaltech startup from πͺπͺ, had a big few weeks. First, the company signed a grant agreement (β¬3.5M) with the Estonian government to provide legal assistance for local citizens. Then it announced its plan to raise fresh funding (β¬1.5M) to fuel its expansion in the EU and Africa. Pretty nice prospects.
π Trickest, a workflow automation startup from π·πΈ, raised β¬1.4M from Credo Ventures (π¨πΏ) and Earlybird VC (π©πͺ), with Daniel Dines and Marius Tirca (UiPath) participating in the round as angels. Big names voted on the future of Trickest, providing an additional positive reinforcement for the Balkans tech scene.
Congrats to all teams!
π¨ Startup Alert
This weekβs alert is on three CEE capitals with buzzing startup scenes, full of promising and innovative companies looking for success at home and abroad.
However, these great overviews are not from me but from Antonia Guarian, a talented biz journalist and startup sourcing manager at EU-Startups. Check:
CEE startup capital to watch #1: Vilnius (π±πΉ)
CEE startup capital to watch #2: Warsaw (π΅π±)
CEE startup capital to watch #3: Bucharest (π·π΄)
π§ Food
Just as I did in this weekβs βStartup Alertβ, instead of writing, I will share a brilliant interview done by Sotonye via his Time Well Spent substack with Balaji Srinivasan (ex-GP @ a16z, ex-CTO @ Coinbase, serial entrepreneur and business angel) because it is so great, insightful and thought-provoking that you should have a go. Despite not remotely connected to the CEE region. At least directly.
Friendly warning: it is lenghty and requires focus (i.e. some complex topics there to digest) but it absolutely worth the time and the effort. Trust me, I have read it.
In the piece, btw, Sotonye and Balaji is talking about βtechnology as determinant of historical cycles in market and government influence, why culture has stagnated despite advances in the tools that make it, how wokism will lose, and more.β Go for it!