Startup ecosystem in Poland
The Polish startup ecosystem is considered one of the strongest among the CEE (Central and Eastern Europe) region. It is developing and growing at a fast pace, making Poland an attractive place to start a business as well as to invest in one.
Below you find an outlook of the startup ecosystem in Poland, with a deep dive in the major stakeholders — VC (venture capital) market, unicorns, exits, accelerators, VC investors, BANs (business angel networks), business communities as well as governmental support programs.
Venture Capital (VC) market
Over the past 10 years, the Polish VC market experienced continuous growth. Total VC funding increased from €29m in 2015 to €477m in 2020 at a CAGR of 75%. On average, during the period 2010–20 VC funding increased by more than 100% every year.
The significant increase in VC funding in 2019 and 2020 was mainly driven by a few late-stage deals. In 2019 the VC market was dominated by one funding round by DocPlanner, which raised a Series E round of €80m with Goldman Sachs and One Peak Partners as lead investors. DocPlanner is a platform that enables patients to find local physicians online and book an appointment.
The largest transactions in 2020 were €74m Series C round of Polish and Finnish company ICEYE, €67m Series D round of Brainly, and €59m Series C round of Booksy. The top 3 transactions accounted for 42% of the total VC funding raised during the year. ICEYE provides a constellation of radar micro-satellites to offer access to near-real-time imagery from space. Brainly is an online learning platform where students and parents get homework and study help from peers and experts. Booksy is a beauty marketplace for finding, scheduling, and managing appointments, anchored by a SaaS App for business management.
Year-to-date 2021, total VC funding amounts to $40m, of which the biggest rounds are Packhelp ($12.7m), Spacelift ($7.6m) and Telemedi.co ($7.0m).
Unicorns
At the moment, there are only two unicorns in Poland with valuation higher €1bn, Allegro and CD Projekt RED.
Allegro is an online marketplace giant that is now the most recognizable e-commerce brand in Central Europe with 20 million MAU (monthly active users). In Sept 2020 Allegro went public with a $11.2bn valuation, which became the largest IPO in the history of Poland. According to Bloomberg, its shares rose 63% on the first day of trading, yielding Allegro a market value of almost $19bn.
The second unicorn is a computer game development company located in Poland and founded in 2002. CD Projekt RED developed and commercialized world-famous games such as The Witcher and Cyberpunk 2077. According to Dealroom, the company’s valuation has reached €6.1bn as of 2021.
However, Allegro and CD Project RED are not exactly unicorn startups in the usual sense since both companies were founded about 20 years ago. Among recently founded startups, there are several that could potentially reach unicorn status and currently have valuations higher than €250m:
● Booksy, a beauty marketplace for finding, scheduling and managing appointments (€255–382m)
● Brainly, an international edtech platform for peer-to-peer learning (€291–436m)
● Polskie ePłatności, a fintech startup for payments processing technology and solutions for business customers (€405m)
● DocPlanner, a healthcare online booking platform (€320–480m)
Source: Dealroom, Bloomberg, Business Insider.
Exits
Between 2015 and 2020, there were more than 100 exits in the Polish market overall. The sectors with the highest number of exits include Enterprise Software, Marketing tech, Fintech and Media & Telecom (please refer to the chart below).
The table below lists the top 10 exits among Polish startups founded no earlier than 2010 by transaction value (based on the available information). The largest deal happened in 2020 (€405m), as Nets, one of the largest payment providers in Europe, acquired Polskie ePłatności. This acquisition will help Nets expand its presence in Poland, one of Europe’s most attractive countries in terms of card payments growth, supported by government incentives.
Accelerators & Venture Builders
In Poland, there are more than 30 accelerators. Here is a list of the most notable ones:
ReaktorX
What is it?
It is a pre-acceleration program for first-time founders, founded by Diana Koziarska and Borys Musielak. ReaktorX is a part of Reaktor Warsaw project that includes a startup coworking space in Warsaw.
For whom?
It is for i) industry experts looking to start their first company, ii) ambitious students with an entrepreneurial mindset and iii) anyone with an idea and a strong will to make it happen.
Program duration: 10 weeks
What is the aim of the program?
To take startups from the idea stage through customer development and first version of the product (MVP), ready for customers and investor funding.
StartUp HUB Poland
What is it?
It is a Warsaw-based organization with a vision to create a hub where international and Polish startups work with corporates and experiment with pilots that can be scaled globally.
For whom?
StartUp HUB Poland invites startups worldwide with good technology and a sound business model to set up teams in Poland and work with corporate partners.
MIT Enterprise Forum CEE
What is it?
It is a CEE-based, equity-free startup acceleration program affiliated to the worldwide recognized Massachusetts Institute of Technology that provides financial, legal, and consultancy support to startup founders from the CEE region.
For whom?
It is for technology startups from CEE region and beyond that have innovative solutions or services in one of the following areas: Health, New Energy, Industry 4.0, Fintech & Insurtech, Sustainability, Martech, and Smart Cities.
HugeThing
What is it?
It is a global innovation hub that helps corporations discover their inner face of innovation.
For whom?
HugeThing supports companies at every stage of the innovation process, from setting the framework and strategies of innovation teams, through support in the implementation of programs and initiatives whose goal is to acquire and create innovations that meet their needs.
NextGrid
What is it?
It is a Warsaw-based accelerator, focused on startups.
For whom?
It is for startups at all stages that are based on modern AI technologies.
Program duration: 3 months
Akcelerator Technologiczny Gliwice
What is it?
It is an accelerator that provides co-financing of R&D projects in the early stages of development (Proof of Principle and Proof of Concept). Technology Accelerator Gliwice supports the seed stage concepts where the risk of investment failure is the greatest, but it can be effectively verified by the fund.
For whom?
The creators can be both entrepreneurs and higher education institutes as well as research institutes, scientific institutes, and individual innovators.
Daftcode
What is it?
It is a venture building company which creates tech-focused startups — from the concept stages, thought development, up to market launch.
For whom?
It is for everyone who has a bold idea and wants to turn it into a fully-fledged business. It helps entrepreneurs develop their ideas, create and launch their own projects from pre-concept to full-scale operations.
Foodtech.ac
What is it?
It is an accelerator combining tech and food to serve the world. It supports portfolio companies with connection with business, access to the ecosystem, training and workshops, and financing.
For whom?
It is for entrepreneurs who are working on a solution in one of the following fields — food, alternative proteins, packaging, food waste, lifestyle and agritech.
Venture Capital investors
According to Crunchbase, there are more than 150 foreign and more than 100 active local VC funds. This number is growing as the Polish startup ecosystem is becoming more and more attractive.
The most active Polish VC funds are SpeedUp, MCI Capital and IQPartners.
SpeedUp Venture Capital Group
SpeedUp Venture Capital invests in the founders of companies at early stages of development and cooperates with companies within the investment horizon of 3 to 8 years and the investment amount is between 50 thousand and 4 million Euro. SpeedUp is interested in companies from mainly CEE region, that create solutions in areas: consumer internet, electromobility, energy, fintech, martech, adtech, medtech, IoT and hardware.
Notable portfolio companies include bNesis, InStream, Legimi, Fitatu, Unamo, ZenCard, and others.
MCI Capital
MCI Capital is one of the most rapidly growing Private Equity groups in the European region. MCI Capital invests in areas such as early stage VC, growth stage VC, private debt and expansion/buyout stage in the countries of Central and Eastern Europe as well as in selected countries of Western Europe.
Notable portfolio companies include Sidly, Spark Software, Focus Telecom, HOJO Clean.
IQ Partners
IQ Partners is a leading fund specializing in investment in enterprises during their initial growth phase. It is focused on seed investments, while also investing in start-ups. Company profile consists of investments in innovative firms functioning in the areas of Internet, Media, mobile technology, e-commerce and IT.
Notable portfolio companies include Prowly, PunkPirates, EvilPort, Odbierz, GetLaunch.
The most notable foreign VC funds are Point Nine Capital, Credo Ventures, Hoxton Ventures, Runa Capital and Enern.
Point Nine Capital
Point Nine Capital is a Berlin-based venture capital firm focused exclusively on early-stage internet investments in areas like Software-as-a-Service (SaaS), online marketplaces, and mobile.
Notable portfolio companies include Brainly, DocPlanner, Oferteo, Pomocni.
Credo Ventures
Credo Ventures is a venture capital company focused on early-stage investments in Central and Eastern Europe.
Notable portfolio companies include Archdesk, Continuum Industries, DataFeedWatch, Displate, Explain Everything, Kontakt.io.
Hoxton Ventures
Hoxton Ventures focuses on startups that either disrupt existing industries or invent entirely new market categories. Hoxton typically invests between $500,000 and $5 million into pre-seed, seed, and Series A stage companies, and supports portfolio companies with follow-on investments. The firm is based in London and invests across Europe.
Notable portfolio companies include NoMagic and Spacelift.
Runa Capital
Runa Capital is a global VC firm investing in early-stage tech companies and focusing on deep tech (machine intelligence, middleware, open-source, mixed reality, etc), cloud business applications, fintech, edtech and digital health.
Notable portfolio companies include Brainly and Kontomatik.
Enern
ENERN is a multi-stage venture capital firm focused on building internet companies and backing entrepreneurial talent in the CEE region, predominantly Berlin, Prague, and Warsaw. Enern invests in projects with an angle on Marketplaces with network effects, Fintech & eCommerce.
Notable portfolio companies include Brainly and DocPlanner.
Business Angels Networks (BANs)
The Business Angel investments market in Poland also demonstrates growth over the years. In 2019 there were 5 Business Angel Networks and more than 500 Business Angels, with an average investment per angel at €3m. In comparison with other CEE countries, Poland has a very strong performance and ranks at second place after Russia by total business angel investments.
Business Angels Networks help attract private investment in early-stage projects and provide consulting, connections, and successful business development experiences. Such communities include COBIN Angel, the largest professional Business Angel network in Poland, which invested in more than 10 startups, including Growbots, Salesbook and Prosoma. In addition, there is Pomerangels, which is designed to invest alongside business angels and syndicates, and Polonia Angels the United States based BAN with focus on funding early stage startup companies founded by Polish or Polish-American entrepreneurs.
Government Support
In Poland, the government actively supports the development of the startup ecosystem. There are both general initiatives and specialized ones.
Among the general support measures, we can highlight “First Business — start-up support” program, which provides low-interest loans to young entrepreneurs and one-off measures for starting up a business at different age categories. There are also grants from the European Union supporting young people and people who are over 30 years old.
In addition, there are specialized startup development instruments that have been initiated by the Polish Development Fund (PFR). Start in Poland is the most important and extensive program, aimed at enhancing and expanding startup ecosystem in the country by developing favorable environments for young, creative companies, enabling foreign citizens to start and grow ventures in Poland, and assisting the most talented entrepreneurs with capital and further global scaling. The program assumes instruments for every stage of the venture: idea, development and international expansion stages.
In addition, Poland actively supports and develops relations with entrepreneurs from neighboring countries of the former Soviet Union. Polish — Ukrainian Startup Bridge, a special mentorship program of the Ministry of Investment and Development of Poland for young entrepreneurs from Ukraine. The main goal of the Polish — Ukrainian Startup Bridge is to expand the knowledge about the business ideas commercialization in Poland and the opportunities of capital attraction from the Polish capital market, including venture capital or private equity funds. In addition, there is the Poland. Business Harbour supporting program for Belarusian entrepreneurs from the ICT sector: IT specialists, startups and established companies.
Communities for entrepreneurs
Poland has a fairly well-developed network of communities of entrepreneurs throughout the country. The largest one is represented by a Polish startup ecosystem Polska Przedsiębiorcza.
Many of the accelerators and incubators mentioned above also have such communities and provide platforms for collaboration and experience sharing, for example, StartUp HUB Poland and OpenReaktor (Reaktor Warsaw project).
In addition, there are quite a few independent communities. Among them we can highlight:
It’s a series of meetings all over Poland that encourages a technological entrepreneurial culture. The central idea is targeted at emerging technology, creative concepts, and online ventures.
In addition, there are branches of international startup communities in Poland, such as Startup Grind and Geek Girls Carrots. Startup Grind is the largest independent startup community in the world and unites over 200,000 founders in 185 cities. Geek Girls Carrot is a community for women passionate about technology, innovation and entrepreneurship.
Conclusion
In conclusion, it is fair to say that the Polish start-up ecosystem is only at the beginning of its development and has high potential to become one of the most attractive regions for entrepreneurs and investors not only in the CEE region, but in Europe in general. We at Contrivance Ventures are very excited to support early-stage start-ups in Poland. If you are an entrepreneur, business angel or innovation enthusiast, feel free to reach out at info@contrivanceventures.com.
