STARTUP ECOSYSTEM

Hungary Funding volume

Hungary’s Venture Capital Landscape in 2023: A Year of Challenges and Adaptation

Hungary’s startup ecosystem experienced a significant contraction in venture capital investment in 2023, mirroring global trends of economic uncertainty and reduced funding. After a record-breaking year in 2022, investment volume dropped by over 60%, reflecting the downturn across Europe.

Total Venture Capital Investment: Declining but Evolving

  • In 2023, Hungarian startups raised approximately €65 million, a sharp decline from €180 million in 2022.
  • The decrease was driven by the lack of large-scale investment rounds. The biggest round in 2023 was Commsignia‘s $15 million Series B, whereas 2022 had five rounds above $10 million, including SEON’s record-high $94 million round.
  • This places Hungary in a weaker position within the CEE region, as the country ranked lower in total VC investment compared to previous years.

Key Sectors and Budapest’s Role

  • Despite funding constraints, AI, SaaS, and Fintech continued to dominate Hungary’s startup ecosystem.
  • Budapest remains the central hub for Hungarian startups, home to the majority of VC-backed companies.
  • The total estimated value of Hungary’s startup ecosystem is now significantly below the €10 billion figure reported in earlier years.

Key Deals of 2023: A Shift to Smaller Rounds

Unlike previous years, there were no €80M+ deals. Instead, early-stage funding rounds were more prominent:

  • Commsignia: Raised $15 million (Series B), making it the largest funding round of the year. The company specializes in vehicle-to-everything (V2X) communication technology.
  • Turbine AI: An emerging biotech AI company, raised a multi-million-dollar round, cementing its position in computational biology.
  • Colossyan: A rising AI-driven multimedia company, secured funding for further growth.

These smaller but strategic rounds highlight the changing nature of Hungarian startup funding, where early-stage companies are attracting international investors despite the decline in overall funding.

Investment Landscape: Smaller Deals, Pre-Seed Growth

  • The average deal size in Hungary in 2023 was significantly lower than in previous years.
  • The majority of investment activity shifted to pre-seed and seed-stage startups.
  • Government-backed and EU funding programs declined, leading to increased reliance on private and international investors.

Hungary’s Funding Ecosystem: Challenges and Future Outlook

Hungary’s startup ecosystem faces several major challenges:

  • Fewer High-Growth Startups: The number of “champion” startups (high-revenue, fast-growth companies) declined from 23 to 17 in 2023.
  • Fewer Startups Being Founded: A drop in new startup creation and an increase in “zombie startups” indicate a demographic slowdown.
  • Early-Stage Startups Struggle: Despite some success in pre-seed rounds, many startups report difficulties in securing follow-on funding.
  • International Expansion is Essential: Nearly half of Hungarian startups have moved or plan to move their headquarters abroad, particularly to the U.S. and the U.K., for better funding opportunities.

Despite these difficulties, Hungary’s focus on deep tech, AI, and SaaS is promising, and international investment interest in select high-growth companies continues.

Sources

2025-02-11T16:41:07+01:00

Hungary Startup density

Hungary’s startup ecosystem has evolved into a key player in Central and Eastern Europe (CEE), driven by a supportive business environment, strategic government initiatives, and a growing pool of entrepreneurial talent. The country's dynamic ecosystem has attracted both local and international investors, fostering innovation across diverse tech sectors.

2025-02-11T16:50:14+01:00

Hungary Export/Import Ratio

Hungary, a Central European nation bordered by Slovakia, Ukraine, Austria, Romania, Serbia, Croatia, and Slovenia, experienced notable trade dynamics in 2023. The country exported goods worth US$160.8 billion, marking a 31.6% increase from 2019’s $122.2 billion and a year-over-year rise of 7.3% from $149.9 billion in 2022. Simultaneously, Hungary imported goods valued at $148 billion, a 6.55% decline from $159 billion in 2022. This trade activity resulted in a $12.8 billion trade surplus, reversing the previous year’s $9.1 billion deficit.

2025-02-11T16:47:36+01:00

Hungary Innovation index

Hungary continues to strengthen its position in global innovation through strategic investments in research and development (R&D), patent activity, and high-tech industries. The Global Innovation Index (GII) 2024 ranks Hungary 36th out of 133 economies, a slight decline from 35th in 2023. Despite this small drop, Hungary remains one of the most innovative economies in Central and Eastern Europe (CEE) and maintains a strong high-income economy status.