Native content supported by SeedBlink.
How equity crowdfunding develops Romania’s Tech Sector
Stimulated by the success of UiPath – the first Romanian unicorn, the local tech start-ups ecosystem is experiencing a radical transformation. 2020 was the Year of Angel Investments in Romania - we’ve seen double-digit growth in the ecosystem indicators: number of start-ups, new accelerators, capital raising rounds, total funding amount. While in 2019, approximately €3 million have been invested in Romanian start-ups, by Romanian business angels, with about 20 start-ups receiving pre-seed and seed funding, 2020 has seen a breakthrough: 54 start-ups received funding, totaling approximately €18 million of angel investments and equity crowdfunding campaigns.
In this positive investment context, Romania should take advantage of its second largest economy in Central-Eastern Europe and its long tradition in IT education, to strengthen its position in the region. The pipeline of local and international ventures is no longer led by a few small-sized E-Commerce companies and their marketplaces; it rather shows now a balanced mix of innovative ideas in FinTech, E-Health, Blockchain, Artificial Intelligence and some HR related solutions. Romanian start-ups are significant growth drivers, contributing to economic dynamism,spurring innovation and stimulating competition. The Romanian Software Industry Association (ANIS) states that the objectives of the local IT industry for Digital Romania in 2025 are for the IT&C sector to reach 10% of the GDP, from about 6% currently, stimulating the digital economy.
Funding of Romanian start-ups became more sustainable and diversified. The ability to invest & the collaboration spirit, are constantly increasing in the communities of investors, business angels, mentors, accelerators and incubators. In the last year, most pre-seed and seed funding were driven by a blend of local Romanian VC funds, micro-investors and international investors, connected by the SeedBlink investment platform. The top of the locations for Start-ups & investors shows Bucharest as leading, followed by Cluj-Napoca, Iasi and Timisoara where new tech hubs are emerging.
Equity crowdfunding mobilizes the communities of micro investors, and the ecosystem accelerates exponentially its development, due to their collaboration. Not being focused on angel investors, the equity crowdfunding platform SeedBlink had a serious contribution to the start-up ecosystem in 2020, by hosting 26 crowdfunding campaigns with a total value of more than €8M, out of which more than half sourced from equity crowdfunding investors.
Moreover, the impact of the platform determined start-up founders living abroad, to return to their home country to raise funds, gain trust and benefit from local support.
Plant an App – the low-code platform – successfully completed a €720K pre-seed funding campaign on SeedBlink in just 3 hours from its public listing, while it was listed in the same time on the Republic (a US equity crowdfunding platform), as well.
Oveit, a start-up in E-Commerce, falls into the same category: although established in the USA, they’ve returned for funding in Romania, raising €500K, needed to conquer the US market with their innovative live shopping product.
We have noticed quite strong support from the Diaspora when it comes to investments in Romanian founders, with 5.4% of all active investors on SeedBlink living permanently abroad.
"Romania is at the beginning of a very interesting wave of accelerated growth of the IT / HighTech industry. This wave must be "ridden" right from the start, from the young age of start-ups. For any private investor, angel or even family investor, can be extremely interesting to have access to young deals in Europe (with a focus on Romania for now), which are vetted by the (subjective) quality filters of SeedBlink. In addition, the excitement of reinvesting in young Romanian companies is irreplaceable.” said Radu Georgescu, Chairman of the Board at SeedBlink.
“The Romanian community of investors is extremely relevant for Plant an App and vice versa. Whether we are talking about independent investors, Angel Investors, or we are talking about Venture Capital funds, Romanians have in common the closeness and openness to digital technology. So far, most of the people we have met have connections in the tech industry, either through the start-ups they have invested in or through established companies they belong to or have been part of at some point. We see a lot of potential in the Romanian investor community by the fact that it is made up of people able to correctly and completely understand the value proposition of low-code and Plant an App, and in the end, this only means that we get to have closer relationships with investors who can become ambassadors of Made in Romania technology.” said Bogdan Litescu, CEO & Co-Founder of Plant an App.
The European Crowdfunding Regulation’s spirit is to protect investors, by offering access to transparent & relevant information and raise their awareness that investing in start-ups involves high risks. This regulation, which will come into effect on 10th of November 2021, builds a unified framework for all European countries, meant to stimulate this alternative financing method for start-ups and SMEs. We hope for positive regulatory changes in equity crowdfunding and investing procedures, aiming to encourage investors to get involved.
Start-ups are the driving force behind our economy — we must advocate for the start-ups and the entrepreneurs behind them and continue to foster innovation. Removing barriers, facilitating connections & access, and empowering start-ups, are just few ways for civic leaders, to give a better edge to the entrepreneurs.
This is native content supported by SeedBlink.