Romania Startup density

Romania: a Rising Hub for Startups and Innovation in Eastern Europe

Romania is emerging as a hub for innovation and entrepreneurship in Southern and Eastern Europe. Known for its historical richness and scenic landscapes, the country is making waves in the global startup scene. Over recent years, Romania’s startup ecosystem has gained significant momentum, attracting investors, skilled talent, and global corporations. The following insights highlight Romania’s global and regional rankings, startup growth, funding achievements, and overall ecosystem value, showcasing its growing importance as a destination for startups and investors alike.

In the 2024 Global Startup Ecosystem Report, Romania ranks 44th globally and 8th in Eastern Europe, underscoring its rising importance (StartupBlink). Key sectors driving this growth include robotic process automation (RPA), cybersecurity, health tech, and fintech. The country has also produced three unicorns:

• UiPath, a global leader in AI-powered business automation, valued at $20 billion;
• eMAG, Romania’s largest e-commerce platform;
• MultiversX (formerly Elrond), a blockchain innovator valued at €1 billion.

Romania ranks 5th in enterprise value growth within Central and Eastern Europe (CEE), experiencing a 7.8x increase from 2017 to 2022. By 2023, its startup ecosystem reached a combined enterprise value of €19 billion, fuelled by significant funding rounds. Some of the most notable include:

• 2022: €127 million for Green Group, €69.2 million for ZoidPay, and €32.3 million for FLOWX.AI.
• 2023: €86.3 million for Z3, €46.1 million for MaintainX, and €27.6 million for DRUID.

According to the Dealroom CEE Report 2024, Romania’s total enterprise value of €19 billion contributes to the region’s combined startup valuation of €213 billion, positioning it 5th in the CEE. While the CEE region hosts over 50 unicorns, accounting for 60% of the region’s enterprise value, Romania has demonstrated promise in nurturing both VC-backed startups and unicorns, solidifying its role as a rising player in the region.

Source: Dealroom, Central and Eastern European Startups, page 6.

Romania’s startup ecosystem reflects its growing potential but lags behind regional leaders such as Poland (€49 billion), Ukraine (€28 billion), Estonia (€28 billion), and the Czech Republic (€23 billion). Currently, Romania accounts for approximately 9% of the region’s total enterprise value.

To bridge the gap with leading CEE countries, Romania has the potential to:

• Attract more late-stage and international investors.
• Continue nurturing its high-growth sectors, including fintech, health tech, and cybersecurity.
• Strengthen its startup infrastructure and funding ecosystem to drive long-term enterprise value growth.

According to start-up.ro’s documentary, ‘Romanian Startups – Roaring Tigers of Europe’, there are 2,500 startups actively operating in Romania, spanning diverse industries. Fintech, RPA, health tech, and cybersecurity remain the key sectors driving growth. The ecosystem has seen consistent funding activity, with over 70 funding rounds annually between 2019 and 2023. Notably, 2021 set a record with €882.17 million invested, reflecting the increasing interest in Romania’s potential.

Romania’s startup ecosystem benefits from a strong supportive infrastructure, including 13 incubators and accelerators, such as Techcelerator and Rubik Hub, alongside flagship events like How to Web and Techsylvania. Government and venture capital funding play crucial roles, with 59% of funding in 2021 coming from government agencies. Prominent venture capital firms, such as Catalyst Romania, Gapminder VC, Early Game Ventures, and ROCA X, are actively shaping the landscape.

The country also boasts a robust talent pool, with 180,000 IT professionals supported by top technical universities and high foreign language proficiency. The growing popularity of remote work allows startups to access skilled professionals both locally and internationally, strengthening Romania’s competitive edge.

Bucharest serves as the central hub of Romania’s startup ecosystem, hosting 24% of the country’s startups and benefitting from a robust network of universities, accelerators, and investors. Other key cities, such as Cluj-Napoca, Timișoara, and Iași, play vital roles in fostering collaboration and driving local innovation.

Challenges and Opportunities

Despite its rapid growth, Romania’s startup ecosystem faces notable challenges:

• Low VC investment as a percentage of GDP compared to regional peers.
• Regulatory complexities, hinder smooth progress and scalability.

However, significant opportunities lie ahead:

• Rising international investor interest.
• Emerging support networks such as RoStartup and ROTSA.
• A growing focus on innovation-friendly policies and increased private investment.

Resources

• The Global Startup Ecosystem Report 2024
• The Recursive: Romania’s Startup Landscape in a Nutshell: 6 Key Figures.
• Vestbee: Romanian Startup & VC Ecosystem Report
• Startupblink