Hungary for growth – an under-explored emerging startup hub
Central and Eastern European countries’ startup ecosystems are increasingly being noticed as home to under-explored and untapped emerging startup hubs. Hungary is no exception, now showing bullish growth through its emphasis on micro-networks and talent hubs. Home to a large pool of highly skilled tech talent, strong research institutes, and an upward trend in startup investment. With more than 1.5K startups and scaleups supported by 140+ investors, Hungary’s buzzing startup ecosystem is expected to continue growing.
Startups currently headquartered in Hungary are now worth a combined enterprise value of €2.4B in 2022, up from €584M five years ago.
A high-growth pipeline
There is a strong pipeline of rising stars startups headquartered in Hungary. Seon, bitrise, and AImotive, among others are securing funding from world-class investors. B2B fraud detection startup, Seon leads the ecosystem’s most valued startups, having recently raised €87.1M in Series B.
It is a common narrative that CEE-born startups tend to relocate overseas, but in one of our recent reports “ Coming of age: Central and Eastern European startups”, we noticed some of the countries’ biggest ecosystems are retaining their startups. Hungary proved to be particularly good at retaining their startups with less than 10% of companies with €>1M funding having relocated outside CEE.
Report - Coming of age: Central and Eastern European startups
Untapped by international investors
Hungarian startups raised €89M in 2022 alone and are thus well on their way to surpassing the already record-breaking last years. The ambition of Hungarian founders is high, but they struggle to find international growth. Investment growth in Hungary has been driven mostly by domestic investors, who account for 80% of funding rounds since 2017.
Early-stage investing is blossoming. Pre-series B funding grew 3.9x between 2017 and 2020. Local investors underpin the early-stage investment landscape, but at a later stage, companies look overseas for bigger cheques.
A world-class technical talent pool
Because of the strong STEM education and world-class technical talent pool, the verticals where Hungary tends to produce most of the success stories lay in deep tech-related verticals such as data analytics and data science, artificial intelligence, and cybersecurity. Startups in the field of fintech and blockchain have shown great development over the last few years.
The abundance of local talent combined will most likely continue to contribute to innovation in Hungary and strengthen an already vibrant startup ecosystem.