Report: Almost half of AI startups in Romania, SEE target funding of more than EUR 1 mn in the next two years
Almost half of the AI startups that want to attract funding in the next two years aim for amounts of over one million euros, mainly to expand internationally, increase the team and launch new services and products, according to the second edition of the RO AI MAP 2022/2023 report, conducted by Techcelerator and Google for Startups to promote Artificial Intelligence startups in Romania and South-Eastern Europe.
The report aimed to identify and map artificial intelligence startups in the region and to collect information about their evolution starting from 2022, such as development stage, attracted or targeted funding rounds and future goals.
In this edition, more than 150 startups using AI from Romania were identified, up from 100 last year, and 100 startups from SEE. More than half of the identified startups were launched after 2020. Also, 10% of the startups in the previous edition of the report exited the market, more precisely, under ten entities.
A third of survey respondents said their main goal for this year is to attract more customers. Other important objectives of founders are to attract a new round of investment, to expand their team, to enter new markets or to launch services and products, the report found.
More than half of the responding entrepreneurs have already attracted investments, and a third of the already-funded startups obtained rounds between EUR 500,000 and EUR 1 million. More than 10% attracted amounts between EUR 50,000 and EUR 100,000. Less than one third of participants did not attract investment.
The biggest challenges startup founders face is that they can't find the right employees, they can't attract the financing they need, and they can't secure the cash flow they need to operate, according to the report. They also consider it challenging to expand internationally, and they find the bureaucratic process difficult in Romania and in other countries where they are present.
"Even in the face of adversity, Romanian AI/ML startups continue to secure substantial funding rounds. As per a recent study by Activize, of the EUR 69.2 million accumulated by Romanian startups in H1 2023, the three highest contributions came from AI/ML enterprises: FlowX with a EUR 35 million Series A, Kubeark with a EUR 2.7 million pre-seed, and Techcelerator graduate Veridion with a EUR 5.5 million late seed round. This strongly suggests that companies in this sector, including those established as recently as 2020, like Veridion, are successfully reaffirming their worth," Cristian Dascălu, managing partner of Techcelerator and partner of GapMinder, said.
Fifty-two startups responded to this edition of the survey, around 80% of them from Romania and the rest from Greece, Croatia, Bulgaria, North Macedonia and Turkey. The survey was carried out between October 2022 and January 2023.
The "RO AI MAP 2022/2023" report is available here.