Budapest Letters #38
👋 Hi All! Great to have you back after a short hiatus. Unfortunately, COVID-19 caught us bad, our whole family was on stand by mode up in the past 2 weeks but now I am back.
This is Budapest Letters, my newsletter covering startup and small business stories from the CEE region, or interesting developments that might have something to do with this part of Europe. Hope you will enjoy it!
Before we jump into edition #38, 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 + share 🙏
Cheers, Aron
📢 TL;DR
Top stories this week: ✍️ Glia, an Estonian scale-up, became the countries 10th unicorn after raising ca. €41M ✍️ euShipments.com, Nethansa, Aggero and Salarify raised 💵 ✍️ Croatia’s B!te Me Nutrition aims to break into the global healthy snack market with its organic products ✍️ Both the US and the EU released legislation that regulates domestic crypto assets and markets
🔥 Story of the Week
Glia, a digital customer service scale-up from 🇪🇪, raised ca. €41M, led by Insight Partners (🇺🇸), with participation from Wildcat Capital and RingCentral Ventures. The fresh funding catapults the company to 🦄 status, making it Estonia’s 10th overall (list of all such startups). Monster achievement from a country of 1.3M 👏🏻
Show Me Da 💶
👏 euShipments.com, an e-commerce logistics startup from 🇧🇬, raised €7.5M from local private equity fund, BlackPeak Capital. The startup, that offers an all-in-one digital logistics platform for e-com companies, will use the fresh money to expand within Europe and fine-tune its technology to fuel its growth.
👏 Nethansa, a SaaS startup from 🇵🇱, bagged €4M, led by local investors Warsaw Equity Group and Movens Capital. The company, that automates sales processes for e-commerce companies, will use the new capital for expansion to the Nordics.
👏 Aggero, a marketing technology startup from 🇷🇴, snatched ca. €1.8M, led by LauncHUB Ventures (🇧🇬). The startup, that provides a digital platform connecting brands with livestreaming creators (mostly e-sports and gaming verticals), will use the funding to widen its offering and strengthen its developer team.
👏 Salarify, an earned wage access startup from 🇭🇺, received €1.2M, led by HEWA Investments (🇺🇸), with participation from Hiventures, a local VC fund backed by the Hungarian government. The company, that delivers financial solutions for workers and employers (e.g. EWA), will use the fresh raise to expand in 🇪🇺.
👏 Additional investment news that you should know about…
B!te Me Nutrition (🇭🇷), raised €330k led by Feelsgood: more here
InRento (🇱🇹) merged with EvoEstate (🇪🇪), creating the No. 1 buy-to-let crowdfunding platform in Europe, serving ca. 12k clients: more here
Congrats to all!
🚨 Startup Alert
This week’s alert is on B!te Me, a foodtech startup from 🇭🇷, that just raised money from local VC Feelsgood Capital, a fund that specializes in impact investments.
The company, that produces healthy snacks from organic ingredients (no gluten, additives or added sugar) was founded 3 years ago by Edo Mujkic and Martin Kandus. B!te Me’s products are already sold in the United Kingdom, Germany, Poland, Greece and Estonia, besides its home markets of Croatia and Slovenia.
Currently, it has two types of product groups, raw bars and lava cookies, all produced in a sustainable way (i.e. no to minimal environmental impact).
Well, what else can can I say, then…
🧠 Food
Accidently or not, but definetly in an interesting turn of events both the US and EU dropped legislation that aims to regulate domestic crypto assets and market.
In the US, the Biden administration released an executive order (here) that says the following, roughly (or at least what I can understand from it):
The US needs to speed up developing central bank digital currencies (CBDCs) because other countries are doing so as well (e.g. China).
The administration acknowledges that the crypto industry is legit and huge, thus it needs to be regulated but also nurtured to succeed.
Crypto has risks to all stakeholders but this must be managed in an olderly fashion, avoiding suffocating it and loosing innovative edge to others.
Crypto could help with financial inclusion and make finance more efficient.
Overall, unlike the EU’s MiCA regulation, the Biden admins order is not a detailed legislative proposal, it is more of a position paper. Which is still worthy and good, especially as it clarifies points that were shady in the past; shady in a way that many people was unsure about the US government’s intentions (i.e. banning Bitcoin, over regulating the industry) but now it is clearer.
And now about MiCA, a true legislation that many feared, like in the US case, will kill the EU’s ability to be competitive in the crypto space. Well, it did not.
In-depth details via Simon Taylor’s crazy good Substack (Fintech 🧠 Food):
MiCAs stated aim is to create a unified legal framework for digital assets. (Europe is big, and in theory, one license would allow a business to "passport" into 27 member states).
The European Securities regulator (ESMA) and Banking regulator (EBA) will have supervision of "asset referenced" and "money" tokens.
"Asset referenced tokens" include tokens like DAI (from MakerDAO), the stablecoin that uses ETH and other assets to maintain a stable peg. This is also how Libra was initially intended to work. These would be licensed by ESMA, and this license could be withdrawn if there were any risks to financial stability or consumer protection.
Token whitepapers will be registered and reviewed by the securities regulator (ESMA) for any token offering over 1m Euros.
"Service providers" (e.g., exchanges or market makers) will have to be authorized with a license. This would also include minimum liquidity requirements to ensure they can safeguard funds and recover from hacks.
Service providers (e.g., exchanges) will also be expected to manage risks of insider dealing, market manipulation, disclosures, and regulatory reporting against these activities.
Service providers will also be expected to manage consumer protection, including appropriate advertising, custody (safeguarding), advice, and trading of Crypto assets.
Long story short - as usual - run up to the approval was packed with fearmongering (mostly founded) but in the end the EU introduced a legislation that while could be better, does a good job in providing a framework in which the many adventages of crypto might flourish. And hopefully, it will remain so.