👋 Hi All! I am finally back after vacation, fully charged and energized. I sure hope that you had a pleasent time too while I was gone, but now you are ready for a fresh dose of Budapest Letters, a newsletter covering startup and small biz stories from the CEE region, or interesting developments that might have something to do with this part of Europe.
But before we jump into edition #16, 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 🙏
Top stories this week: ✍️ Coinbase got into a heated exchange with the SEC, that might have consequences outside the US, as well ✍️ Printify, Simplicity, EstateGuru, Memby and Twigsee raised 💵 ✍️ Twigsee aims to disrupt the preschool management market, making parents with small children über happy ✍️ Vilnius, the Lithuanian capital of ca. 600k people, is becoming an international tech hub, but what is its secret (nice overview via TechCrunch with local insiders)
🔥 Story of the Week
Coinbase, a popular crypto exchange platform from 🇺🇸, got into a well publicized Twitter brawl with the Securities and Exchange Commission (SEC), the powerful agency overseeing the workings of US capital markets, incl. listed companies.
In short, the crypto startup announced that it intends to launch its new lending service (Coinbase Lend) soon, a product that would allow Coinbase users to earn interest on certain digital assets held on the platform, starting with 4% annual percentage yield on USD Coin. A very solid value proposition, if you ask me.
However, despite having meetings with Coinbase for several months (or at least that is what the startup alleges) re: the new lending product, the SEC is not convinced; to put it mildly. According to them, Coinbase’s Lend doesn’t qualify as a security (i.e. making it an actual, regulated lending programme) and users won’t be “investing” in it, but rather lending the USD Coin they hold on Coinbase.
Final outcome? Brian Armstrong, Coinbase’s founder and CEO, took to Twitter and bashed the SEC for “sketchy behavior“ and attacked the agency for having a hostile attitude towards the crypto community, while the SEC simply threatened to sue the startup, should it still go ahead with its lending plans. O-U-C-H.
Hard to tell what comes next: escalation or de-escalation. But it is telling that Coinbase postponed Lend’s launch until October so maybe all will be settled at the table and this frenzy was just a show. Or maybe not. We ougth to see it soon.
PS: And what about the impact for CEE? Well, the final SEC decision could easily influence regulation in the EU, and this in turn could very well impact future plans of local crypto superstars, such as Austria’s Bitpanda. So a big issue what we have here.
Show Me Da 💶
👏 Printify, an on-demand printing startup from 🇱🇻, bagged ca. €38 million, led by Index Ventures, a VC heavyweight. But the investment round also included H&M Group, Virgin Group and several other regional startup superstars, like Wise and Vinted. The fresh money will be used for global expansion as Printify is well positioned to be a leader in this space (i.e. supporing the creator economy).
👏 Simplicity, a smart communication startup from 🇸🇰, received around €7.2 million, led by Zero Gravity Capital and Venture to Future (two well established local VC firms), with additional participation from angel investors. The company’s app collects, aggregates, and delivers relevant information from public authorities (e.g. municipalities, hospitals, police) to citizens, directly. While it also provides opportunity for citizens themselves to get in-touch with local government / issues. The solutions is already used by roughly 100 cities across Europe but further expansion is planned both within the continent and outside, especially to the US.
👏 EstateGuru, a real estate financing startup from 🇪🇪, nabbed €5.8 million from various international investors, including TMT, Verve Ventures and Immo Lab. According to the company, that operates a highly succesfull real estate financing platform that makes investing in secured property loans easy, fresh funding will be used for expanding its business and team, plus strenghting its technology.
👏 Twigsee, a workflow and smart communication startup from 🇨🇿, raised ca. €500k from local investors, on top of its ca. €320k funding round not long ago. The company offers a digital platform that simplifies how preschools work and interact with parents. A superb solution I can tell you as a practicing parent.
Congrats to all teams!
🚨 Startup Alert
This week’s alert is on Twigsee, a god send to all parents with children in preschools. Of course, I can talk only about my experiences with Austrian and Hungarian nurseries / kindergardens, but based on these, Twigsee is tapping into a market that is set for digital distruption. Everything is paper based, outdated and slow. Tracking of payments, events and important issues, or just keeping in-touch with educators are a pain in the back. A postcard from the 1970s, at least.
But in comes Twigsee, the startup of Vanda Seidelová, a Prague-based entrepreneur, that basically solves all key pain points a parent might have:
School and meal fees,
Absence and event notifications,
Instant communication with parents, etc.
The app is already available in 6 languages but with the fresh funding, Ms. Seidelová and Twigsee aims to distrupt CEE, South America and Africa, regions that are similar in terms of preschool digitalization, i.e. low to nothing that is 😄
Maybe it is just a Hungarian thing but when it comes to “becoming an international tech hub”, “when will we have a unicorn” and such discussions, most people here view the US, China and Israel as countries to learn from and replicate their doings in order to be a successful startup nation.
Funnily though, there are some countries much closer to us, even within the CEE region, that we could easily look for inspiration. And these our Estonia, Latvia and Lithuania; or the Baltics, as they are collectively referred to. Tiny nations in the North with oversized success in the technology industry and global startup scene.
When it comes to cybersecurity, fintech, health teach, edtech or sustainability, it is hard to find startup stories nowadays (let it be innovative ideas or big investment rounds) that are not linked to this particular part of Europe. Baltics are killin’ it.
That is why I was super excited that Mike Butcher from TechCrunch dedicated a whole article to Vilnius, the Lithuanian capital, and how and why it is becoming an international tech hub, based on local feedback. Mike interviewed 11 insiders from the city whom each have a unique view of these developments. Check it!