🇲🇩 The Untapped Market: Explore The Moldovan Startup Ecosystem, Key Players & 10 Reasons To Invest
When VC Funds search for promising startups to invest in, they often look to well-established tech hubs like Silicon Valley, London, Tel Aviv, or Berlin. While these regions undeniably offer a wealth of opportunities, there are hidden gems in less-explored markets waiting to be discovered. One such 💎 is Moldova — a small Eastern European country with an emerging startup ecosystem that’s ripe for investment.
I am about to give you ten compelling reasons why a VC Fund should consider investing in startups born and nurtured in Moldova. Curious to dive into the most captivating part? Here’s a breakdown of the article’s sections.
🇲🇩 Section 1: Moldova At A Glance
💡Section 2: Key Facts About The IT Industry In Moldova
🦄 Section 3: Startup Ecosystem In Moldova
🚀 Section 4: Reasons To Invest In Startups From Moldova
🤞Final thoughts
🇲🇩 Section 1: Moldova At A Glance
The Republic of Moldova is a small European country, bordering the European Union and Ukraine. Ex-member of the USSR, Moldova gained its independence in 1991 and from then on is charting its own course on the global stage.
Moldova’s GDP per capita is 6,410 USD and, with a population of 2,521.8 million people, most of its citizens are multilingual, speaking Romanian (78,6%) and Russian (14,5%), followed by Gagauz, Ukrainian and Bulgarian languages.
FDI inflows to Moldova in 2021 recovered from the pandemic-induced drop and reached 264 million USD which represents a +76% increase compared to 2020. The total stock of FDI represents cca. 35% of the country’s GDP.
With an average monthly labour cost of 725 USD per employee, Moldova provides investors with a competitive advantage in terms of operating expenses. Foreign investments are primarily channelled into manufacturing, financial services, and trade sectors. In recent years the IT industry has strongly gained attention as a key driver of economic growth.
The Global Innovation Index 2023 positions Moldova at the 60th spot globally (out of 132 economies globally) and 35th within Europe. The country’s performance surpasses expectations considering its level of development, maintaining a record 🚀 of innovation overperformance for the 13th consecutive year.
Despite the growing reputation of Moldova’s :
🍇 emerging wine-making industry and the World's Largest Wine Cellar,
🌳 a picturesque landscape that attracts tourists, and
🍅 exceptional agricultural produce — a derivate of fertile land and abundant sun, our country gained a new appreciation in 2022. It earned the title of ‘small country with a big heart’ due to the unwavering dedication of our citizens who went above and beyond to aid Ukrainian refugees in escaping the war and seeking refuge in Moldova.
We even had a documentary about it, check it out 👇
And great news ❗️ — in June 2022 the European Council granted EU candidate status to Moldova, igniting our optimism for a prosperous future. However, it also came with a set of tasks that we must diligently undertake to progress. These tasks encompass, among others, economic development, the promotion of innovation, and the enhancement of access to financing for business development.
💡 Section 2: Key Facts About The IT Sector In Moldova
🟢 The IT Sector’s Contribution To Moldova’s Economy Is On The Rise
The IT sector’s contribution to the country’s GDP increased from 2.7% in 2015 to 5.1% in 2022 and continues to grow. In terms of revenue, the IT sector has grown more than threefold since 2014, reaching cca. 471 mil. USD in 2021. The initial growth of the IT industry was driven by the country’s advantages as an outsourcing destination for IT services, such as internet accessibility, cost-effectiveness, location, and skill availability.
The IT businesses provide an extensive range of services, such as consulting, development, customer support services, operations management, cloud services, and more. Over the recent years, the IT community has started shifting more towards becoming developers of proprietary software and establishing tech startups.
🟢 Moldovan IT Companies Export About 80% Of Their Production
Over 80% of the total production of IT companies is destined for export. Moldova has succeeded in increasing its IT exports 10 times in the last 15 years. In 2022 the export volume of the IT sector reached 469 mil. USD, with an annual increase of approximately +32%. This growth has been driven by the country’s advantages as a subcontracting destination for IT services, based on cost, skills and location.
Moldovan IT companies contribute to a wide range of American and Western European products for various verticals such as fintech, gaming, automotive and telecommunications. Major external commercial partners are the United States, Romania, the UK, Germany and Italy.
🟢 We Have One Of The Cheapest Internet Connections In The World
Moldova has one of the best internet connections in the world, and ranks third among countries with the cheapest fixed broadband, having an average monthly price of 7.03 USD and a download speed of 105.92 Mbps.
The largest providers of xDSL and FTTx cover almost the entire country with the World Wide Web which provides fast and reliable internet connection. Fibre optic and wireless broadband internet, including mobile internet, is available in most urban and rural areas of the country (PoP-98%) at some of the highest speeds in Europe.
🟢 Europe’s First e-Park — Moldova Innovation And Technology Park
To create favourable conditions to boost the development of the IT industry, and promote research and digital innovation in various sectors, the government created the first e-park in Europe called Moldova Innovation Technology Park (MITP).
MITP offers numerous advantages for its residents, among which are virtual presence, reduced tax burden (7% flat tax on revenues), simplified administration, IT visa program and state guarantees. Some of these incentives are addressed in the article below.
As of today, MITP reunites more than 1,500 entrepreneurs from 38 countries, accounting for 85% of the entire Moldovan IT sector in terms of sales, exports, and jobs. Check here for more statistics on MITP residents.
🦄 Section 3: Startup Ecosystem in Moldova: Bird’s Eye Overview
We are a relatively new entrant to the startup scene. According to the Global Startup Ecosystem Report 2023, Moldova’s startup ecosystem occupies 85th place (out of 100), jumping up 3 spots compared to the previous year, primarily driven by investments in IT infrastructure, co-working spaces, and specialized acceleration programs tailored to startups at different growth stages.
There are 100+ startups in the country and counting, out of which just over 50 are actively fundraising. Here are some of the most prominent startups from Moldova operating globally and with significant traction in both local and international markets. Some of them are already worth billions of dollars.👇
Chisinau — the capital of Moldova — benefits from the most vibrant startup community, and two more cities that joined this ‘club’ recently are Balti (north) and Cahul (south). There are 11 coworking spaces in the country: Tekwill, Fintech Hub, iHUB, Artcor, Mediacor, IT Digital Park, Orange Digital Center, 404 Moldova, Community Business Center and recently created Nortek (Balti city) and Inotek (Cahul city) that provide startups and IT professionals with essential resources and networking opportunities.
Moldovan startups are supported by an army of community builders to help them succeed, among which the most active are Startup Moldova Foundation, Dreamups, XY Partners, YEP! Moldova, and Technovator. They organise mentorship, hackathons, and accelerator programs, and provide networking opportunities, education, and research insights. These efforts are complemented by activities aimed at advocating for favourable startup development policies and promoting the startup ecosystem locally and abroad.
Access to local funding for startups is provided by two active business angel groups Business Angels Moldova and Mozaic, who together with the fundraising agency Investitii.MD, each plays a pivotal role in supporting startups in their investment journey.
🚀 Section 4: Ten Reasons To Invest In Startups From Moldova
While some of the above may seem modest to you, it’s essential to recall that a mere decade ago, the concept of “startup” in Moldova was perceived as a mythical creature 🦄. In just a few years, we’ve leapfrogged to put Moldova on the global startup map and advanced in international rankings.
I believe that investing in Moldovan startups allows angel investors and VC funds to capitalize on the rapid growth and potential that Moldova’s emerging startup ecosystem offers. I have identified 10 compelling reasons (but there are more for sure!) to consider it seriously.
⬇️ Here is exactly, why
🚀 Reason 1: Single Flat Tax Of 7% On Revenue
The Government of Moldova introduced a fiscal incentive in 2018, targeting businesses that derive a minimum of 70% of their revenue from IT-related activities. This incentive involves a flat tax rate of only 7% on sales revenue, effectively replacing various other taxes (as presented in the image below). To be eligible for this incentive, startups must be registered in Moldova and be residents of the Moldova Innovation and Technology Park.
Being the lowest tax burden in the CEE region, this incentive significantly lightens the fiscal burden for tech startups operating in Moldova compared to most developed economies. The introduction of this favourable tax regime can greatly enhance the financial viability and competitiveness of tech startups registered in the country.
❗Why it is important: For VC funds exploring investment opportunities in Moldova, the knowledge that tech startups here enjoy a substantially lower tax burden than those in developed economies serves as a compelling case. Even if a VC fund mandates relocating a startup's HQ to a different jurisdiction, retaining the startup’s IT developers in Moldova can still provide the advantage of this favourable tax environment, optimizing cost efficiency and fostering growth.
🚀 Reason 2: Growing Number Of IT Professionals - Potential Tech Founders
Having a strong pool of IT specialists with diverse skills enables startups to access a broader spectrum of tech expertise. There are over 18,000 active IT professionals in Moldova, including specialists in data analytics, UI/UX design, software development, application development, game development, etc. Most IT specialists are potential co-founders/CTOs for startups and there are a number of examples to confirm that. (e.g. EdooSitter, Unde.io, Respiro and others).
There’s also a notable uptick in the number of students graduating from universities in the IT field. Since 2017, this number has grown by more than +20%.
This increase is largely due to the growing interest among young people in considering careers in IT, which is in line with current global market trends. There is also a consequence of the government’s focus on fostering the IT industry in Moldova and the financial and technical support provided by international development partners.
❗Why it is important: VC funds should take note that local startups have access to a talent pool with strong IT skills. This resource fuels tech advancement, drives innovation, and makes these startups more competitive, which, in turn, makes them attractive investment opportunities.
🚀 Reason 3: Labour Cost-Effectiveness
Though the medium IT salary in Moldova is triple the national average (average gross salary in the IT sector is cca. 1,700 USD/month), it remains among the lowest in the region. For more information on salaries and benefits paid in the IT sector in Moldova check this PwC report.
The quality of local IT professionals is as high as in Romania, however, the value and productivity per IT employee generated by Moldovan companies is greater.
The cost of living in Moldova is, on average, 52.2% lower than in the United States. For example, the rates for essentials such as renting a decent apartment are at 400 USD, utilities at 100 USD, and food expenses at 200 USD per person on average. These factors combine to create a cost-effective environment for investing in startup teams in Moldova, potentially resulting in increased profit margins.
❗Why it is important: For VC funds the low IT salaries, the high-quality IT professionals, and the low cost of living make investing in Moldovan startup teams an appealing and financially rewarding opportunity, as they can get more value and potential return for the investment they make.
🚀 Reason 4: Linguistic And Cultural Diversity Of The Founders
Historically, Moldova’s population has demonstrated a remarkable ability to adapt to external threats and influences, which made us resilient, adaptable, and rapid learners. Just think of some of our past experiences: being part of Greater Romania, then part of the Soviet Union, then independent and now looking into EU membership. We’ve seen it all and managed to adapt.
Our startup founders are multilingual, fluent in Romanian, Russian, and often English and French, with a notable presence of Gagauz (a north-western dialect of Turkish with Bulgarian and some Russian additions) and Ukrainian (especially following the outbreak of war in Ukraine). Moreover, Moldova’s literacy rate exceeds 99%, and many young founders have received a Western education, often graduating from top universities in the EU, UK, or the USA.
❗Why it is important: Moldova’s unique historical, cultural and linguistic connections with neighbouring countries provide an advantage for businesses looking to reach into Eastern Europe, the European Union, and CIS countries. For VC funds that are looking for founding teams that can effectively navigate changing market conditions, adapt and innovate rapidly, and communicate effectively in multiple languages, the Moldovan teams will stand out by consistently going the extra mile to achieve their business goals.
🚀 Reason 5: IT VISA Program For Foreign Talents
In a global landscape where tech talent is highly sought after, Moldova became a welcoming destination for attracting top talent from around the world. The Moldovan government offers the IT Visa instrument, which provides a fast-track procedure, requiring minimal documentation and enabling application online.
While a non-resident IT professional, without an IT Visa, can work in Moldova for up to 90 days every 6 months, the IT Visa allows its holder to easily get a work permit for 2 to 4 years depending on the skills. The family members of the applicant obtain the residency permit for the same period. For detailed information on the procedure check here.
Together with other factors like
- fast and the cheapest internet connection in the world
- proximity to the EU market
- founders with English-speaking proficiency
- mild climate conditions
- affordable living expenses
- bountiful wine culture and other cultural perks
Moldova becomes an attractive choice for tech startups who can access top-tier talent without the need for a full-scale relocation to a more talent-rich market.
❗Why it is important: For VC funds considering new investment opportunities, Moldova’s facilitation of talent acquisition through the IT Visa program further strengthens the business case for investing in local startups. This incentive combined with safe and comfortable living conditions and proximity to the European markets, presents a compelling proposition for VC firms to explore investments in Moldovan startups.
🚀 Reason 6: Limited Access To Financial Resources Locally
The startup investment landscape in Moldova is relatively scarce. There are two business angel communities: Business Angels Moldova and Mozaic, investing from 10,000 to 250,000 EUR per startup.
There are no local venture capital funds in Moldova. Nevertheless, some of the regional VC funds are actively looking into this region and there are a few that invested, such as uVentures (UA), Credo Ventures (CZ), Inovo (PL), Gapminder (RO), and others (check the image below).
Additionally, in 2022, the Moldovan government launched a new program to support innovative and digitally-centred startups with non-dilutive equity funding of cca 27,000 USD per startup. To qualify for this assistance, a startup must develop an innovative solution with the potential to disrupt both local and international markets and be able to demonstrate a certain track record. So far 14 companies (out of which 12 are presented in the image below) benefitted from the state support in 2022 and are in the process of grant absorption. The program is currently accepting new applications for the competition of 2023.
Another financial support in the form of non-dilutive equity investment is offered by the Digital Impact Program for the region of Cahul, implemented by the Startup Moldova Foundation as part of the EU4Moldova Project. So far, 11 startups have been selected to receive up to of up 42,700 USD/ per startup in the form of grants. Here you can check out the pre-selected teams.
❗Why it is important: For VC funds, the limited availability of local funding in Moldova presents a compelling opportunity. By being among the first to invest in Moldovan startups, a VC can not only identify and support promising teams early on but also negotiate favourable terms. As the Moldovan startup ecosystem continues to evolve, establishing a VC’s presence at this stage can position the fund ahead of potential competitors, allowing it to build a strong foothold in the region and take advantage of the ecosystem’s growth and potential.
🚀 Reason 7: Attractive Startup Valuations
Startups operating in Moldova typically obtain lower valuations as compared to their counterparts in more developed countries. VCs can acquire the same equity share as in developed economies but for a more modest investment.
This presents a dual advantage. Firstly, it enables investors to spread their investments across a broader range of startups, thus diversifying their risk exposure. Secondly, it increases the potential for substantial returns when these startups flourish.
While financial support is crucial for local startups to scale, they require more than just capital. What makes foreign investors especially appealing to Moldovan startups, is that despite their dollars, VCs can bring guidance, access to networks and markets, and sector-focused know-how — resources that are often scarce within the local ecosystem.
Don’t hesitate to invest in Moldovan startups, as some VCs have already taken the leap and invested in some of the following startups: ⬇️
- XOR.ai raised an investment of 2.7 million USD in 2022 from Garage Syndicate, s16VC, Signal Fire and Gurtin Ventures and an angel investor. XOR develops technologies for human resource and talent acquisition workflow automation. It utilizes artificial intelligence and automation technologies to massively scale its customers’ recruiting efforts, speed the hiring process and lower overall costs.
- Brizy.io raised 2,4 million USD from Fuel Ventures, a leading early-stage seed, and from the EIS Fund, UK. Brizy is a headless visual page builder that’s available as a WordPress Plugin, a Cloud Solution, and an on-premise solution. Brizy’s solutions are available fully white-labelled and are used by some of the world’s largest hosting providers and leading providers helping businesses to thrive online.
- Greeno.ag raised 2 million EUR from Signet Global in 2022. They built a platform that connects farmers and enterprises to create a greener future by building the first and largest global geospatial data marketplace in agriculture. Their cutting-edge tech is deployed in 30 countries, millions of hectares and thousands of fields.
- Bloomcoding raised 1 million EUR in 2023 from Credo Ventures, Inovo and uVentures. It aims to become one of the leading providers of online coding education for K-12 children in Europe using a blend of Virtual and Augmented Reality Ed-Tech, in small live online classes, to re-imagine education, spark curiosity, and blend fun with learning. The startup has offices in Moldova and Bulgaria with main markets in Romania, Bulgaria, and Poland.
❗Why it is important: For VC funds, a lower valuation opportunity not only makes investment more cost-effective but also mitigates risk through portfolio diversification, opening doors to greater profit potential when Moldovan startups thrive. The combination of favourable valuations and the ability to provide critical support for startups can make it an appealing investment opportunity for VCs.
🚀 Reason 8: Vibrant Startup Ecosystem
As presented earlier in this article, our startups are strongly supported by an army of community builders (among which are Startup Moldova Foundation, Dreamups, XY Partners, YEP! Moldova, Technovator and MITP), universities, angel investors, the government and international development partners looking to nourish locally-born unicorns.
Due to significant financial support offered by USAID, the European Union, Sweden, WNISEF, EBRD, GIZ and others, as well as diaspora investors the community builders are able to provide a number of development activities and events aimed at startups at various stages of their business cycle: from early days ideation to scaling and expanding internationally. Annually these community builders help over 200 teams to try, (maybe) fail and then try again in the world of tech innovation and startups. The success rate is growing annually reaching 20% of teams who managed to break through.
❗Why it is important: For a VC fund, when contemplating an investment in a startup from Moldova, the fund can rest assured that the chosen team will enjoy all the needed support from this interconnected ecosystem. This collective effort from community builders aligned with the VC fund’s interest can potentially reduce risk and enhance the startup journey for success.
🚀 Reason 9: Our Startups Think Globally Right From The Outset
Startups in Moldova are limited by a small domestic market, which makes them hungry for regional and even global markets from the very beginning of their startup journey. Typically, our startups will first conduct initial testing and experimentation within the local market and then, after building the MVP, getting customers’ feedback and improving the product, will aim very fast to extend their reach and influence regionally and even internationally.
Another reason for startups to act globally and aim for international markets is the limited financial resources available at the local market. To be interesting for foreign angels and VCs, startups must scale abroad and get traction on the external markets.
A good example of that is a startup called Fagura — the first crowdlending platform developed in Moldova. Initially, with just 30,000 EUR raised from two business angels, Fagura ventured into raising additional funding from outside of Moldova via an equity crowdfunding platform called Seedrs. For that reason, it had to become an active player in crowdfunding in Romania, targeting the larger European market as well.
❗Why it is important: A reason for VC funds to consider investing in Moldovan startups lies in the entrepreneurial hunger and forward-thinking perspective embedded within the very DNA of these companies. Constrained by limitations such as a small market and limited access to local financial resources, the startups must test locally, but act globally. This ambitious outlook not only reflects their entrepreneurial spirit but also positions them for growth and competitiveness on regional and global stages.
🚀 Reason 10: Support from the Moldovan Diaspora
The Moldovan diaspora plays a pivotal role in bridging the local startup ecosystem with the global business landscape. Comprised of Moldovan individuals residing abroad in countries like the United Kingdom, Romania, USA, Germany, Estonia, Malaysia and other countries, the diaspora, intricately motivated by the desire to help, is strongly committed to assisting their home country by offering knowledge, mentorship, investment and guidance to emerging startups. Check below some of the active diaspora investors who provide smart capital to Moldovan startups.
A great example of the diaspora’s money invested in local founders is a startup called Self Talk, which is led by two accomplished female founders, Elena and Vio, who bring with them valuable experience from their work in the UK.
The startup developed a mobile app that allows users to generate cognitive behavioural therapy audio that feels like listening to a therapist talking about how to manage difficult emotions. Sefltalk’s first funding came from the diaspora. In 2022 the founders managed to raise 150,000 EUR from Moldovan and Ukrainian business angels based in the UK.
Besides money, the diaspora offers its support in the form of know-how and access to networks. Many members of the Moldovan community abroad have valuable work expertise from prominent multinational corporations and startups overseas like Meta, Bytedance, Amazon, MoneyLion, Delivery Hero, Parkopedia, Antler, Techstars, etc. They often volunteer as mentors and experts being invited by local organizations to help startups (e.g. by participating in Diaspora Entrepreneurship-in-Residence Program).
❗Why it is important: For venture capitalists and investors, recognizing the diaspora’s crucial role can be instrumental in understanding the potential of Moldovan startups. Diaspora’s business experience and industry-specific insights bring added value to local startups’ competitiveness, while their close ties to Western markets provide a significant advantage when expanding internationally. Leveraging this can substantially increase a startup’s chances of success, making investments in Moldovan startups an enticing opportunity.
🤞Final thoughts
Moldova’s startup landscape is rapidly evolving, offering both early-stage investment opportunities (such as lower valuation, or the first mover advantage) and the potential for a higher transformative impact.
🚀 If you are a VC Fund looking for resilient, hungry-for-success multilingual founders with global ideas;
🚀 if you are attracted by additional perks offered by the government to support tech startups (such as a single 7% tax rate, MITP residence and an advantageous IT visa for foreigners);
🚀 if you are concerned about investing in a highly skilled IT workforce at a competitive cost; or
🚀 if you just feel like being a discoverer of unknown startup land — you should consider meeting our startups and visiting Moldova. Investing in Moldovan startups comes with all the support the local ecosystem builders and the Moldovan diaspora will offer your investee to succeed.
💡 I’d love to know your thoughts. If you have any questions, comments or ideas, or maybe you want to meet the founders and learn more — leave me a comment here or let’s connect by LinkedIn or email.
👇 Wondering why I wrote this article?
I have a keen interest in the development of the startup ecosystem in Moldova and I see the immense potential within our vibrant community. I'm passionate about startups, driven by the belief that innovative ideas deserve the chance to thrive through guidance and strategic funding efforts. I’m keen to work with a VC Fund that shares the same passion!
Big thanks to
, Artemie Bilevici & Rena Kleine for your valuable feedback. Veronica T., Marina B., Natalia D., Mihai S. and Dmitrii N. — thank you for helping me gather all the valuable information to complete this article. And endless gratitude to Niki and Anu from for believing in me!
