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).
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.
KEY STARTUP ECOSYSTEM STAKEHOLDERS [FI1]
Ministry of National Education coordinates education policies, including the higher education sector.
Ministry of Research and Innovation is the coordinator for research, development and innovation policies.
Ministry of Economy is responsible with SMEs policy, IP reglementations and competitivity.
Ministry of Finance responsible with major tax breaks for R&D, foreign investments, minimis scheme and overall fiscal policy.
Ministry for Business Environment, Commerce and Entrepreneurship runs the Startup Nation governmental program for startups and implements the policies for SMEs.
Ministry for Communications and Digital Society coordinates the ICT infrastructure and policy in this area. At the same time it drives the Digital Agenda policy and programs while coordinating with all other ministries.
Ministry for European Funds is responsible with the implementation of several programs connected to competitivity and minism grants for startups & SMEs.
Ministry of Foreign Affairs with the delegate minister for European Affairs places ICT at the core of Romania’s agenda for the upcoming presidency of the EU Council in 2019.
UEFISCDI Established in 2010, is a public body under to the Ministry of National Education (MEN) responsible for funding projects in higher education, scientific research, development and innovation.
ANIS - Employers’ national association of the software and services industry
CNIPIMMR - National Council of SMEs
Concordia - ICT Trade Union
ARIES - Romanian Association of the Electronic and Software Industry (Transylvania)
Telenav, Bitdefender, IBM, Endava, Amazon, Telekom, ING, BRD, BT, Orange, Carrefour, Betfair, Accenture, Siemens, NTT Data
They sponsor events, specialized media, pre-acceleration and acceleration programs.
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.