Romania

THE ECOSYSTEM

The Romanian tech start-up market is at a rather incipient stage with strong hubs in Bucharest and Cluj-Napoca, while other cities are growing fast as well. In the past 3-4 years, the ecosystem has been quite vibrant supported by a fast-growing ICT workforce, strong programming skills in IT, excellent connectivity infrastructure, and a booming outsourcing industry. Graduates of tech schools are increasingly choosing to go work for startups (or start one) instead of joining a multinational company. At the same time, those who worked in multinationals or for big companies abroad decide to set-up their own company initially with a focus on outsourcing services complemented by several products’ development. ICT industry reached 7% of the GDP and forecasts show a growing trend.

The size of the country makes it so that the number of ICT professionals grows at a faster pace, compared to Serbia, Hungary or Bulgaria. At the same time, EU membership makes travelling, business deals and collaborations easier. Romania has one of the best internet speeds in the world, thus providing an infrastructure conducive to start a business in tech. Estimates show around +600 startups and the majority (75%) are tech-enabled. The most common ideas are in the following verticals: Mobile Apps, SaaS, Web-based (marketplaces, speciality websites), Hardware/ IoT. Nevertheless, even though only a fraction of start-ups is deep tech, this portion refers to entrepreneurs who managed to attract large investment rounds from international VC funds (UiPath), sell their business to international players (Vector Watch acquired by FitBit) or are steadily growing in a national brand renowned worldwide (Bitdefender).

Romania Romania

Although the Romanian startup scene builds on strong tech skills and a drive towards entrepreneurship, it has to face with some major challenges with funding, regulations, and business skills. Angel investors have a limited capability, typically up to 150k and their networks are still underdeveloped, seed funds were unavailable on large scale before 2018, national startup programs are not customized for tech startups peculiarities, and local accelerators had few available funds for stage startups.

The latest study “Start-ups, Scale-ups and Entrepreneurship in Romania” shows that even if there are some “islands of excellence” and a well-educated talent pool, structural obstacles are hindering the development toward an innovative economy. To the blockers mentioned above, the study adds brain drain, a low entrepreneurial culture at universities, lack of trust, inadequate communication among ecosystem stakeholders and poor coordination among government policymakers. The study concludes that only by leveraging national shortcomings with its diaspora, EU networks and funds, along with strong connections with global trends, Romania will be able to switch from a modest innovator into a digital and innovation prone economy.

Spherik is interested in connecting to European and global networks of accelerators and incubators; collaboration opportunities with major stakeholders in the area of innovation at the EU level; offer policy input and gather support for new national advocacy initiatives; looking support from international VC funds interested in Deep Tech startups and in need of support in learning about EU funds targeting startups and acceleration programs. 

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