Eastern European tech entrepreneurs draw global interest

PRAGUE: Tech entrepreneurs in central and south-eastern Europe, many of whom already have the experience of launching their own businesses, are now having more success at enticing global investors the second time around.

Until recently, the region’s tech start-up scene was stagnant, failing to rank among Europe’s top dozen countries for investment and lagging western and northern European countries, as well as decades-old tech hub Israel.

But that’s changing fast. By last year, investment in central Europe, while still modest, had jumped more than ten-fold since 2012, buoyed by a growing number of deals. And 2017 is on track for even stronger growth.

While an early wave of companies often lacked the international know-how and market savvy to develop into global businesses, their founders have absorbed lessons and are now able to generate more heavyweight investment.

“A lot of the bigger guys are now starting to take a look at the region,” said Credo Venture’s Andrej Kiska, whose Prague-based fund started in 2010 and has since co-invested with global venture capital firms Index Ventures, Accel and Baseline Ventures.

“It’s still a small market but it’s growing fast. First time founders have gained experience and are now starting their second and third companies with higher ambitions.” Take Warsaw-based medical appointment booking platform DocPlanner, founded by serial Polish entrepreneur Mariusz Gralewski.

On Wednesday, the company said it had closed a new round of US$15mil to help fund international expansion in Latin America following its merger a year ago with Spanish rival Doctoralia.

Previously, Gralewski turned a dorm-room idea into Poland’s leading business social network, GoldenLine.pl, which he sold before setting up DocPlanner. The medical booking company now employs 300 and says it is making 340,000 appointments per month in its six core markets of Poland, Spain, Italy, Turkey, Portugal and Mexico.

The new funding underlines how entrepreneurs such as Gralewski are attracting global investment.

DocPlanner has raised US$46mil to date with international investor Target Global, Germany’s ENERN Investments and Londonbased One Peak Partners leading the latest round.

“We have a first generation of entrepreneurs who quickly sold their companies and then were able to start new ones after building up trust and experience,” Gralewski said.

“The funding in the region is not comparable to when we were trying to raise money for my first company.”

Countries in the region offer a host of advantages for start-ups, including a long tradition of producing graduates strong in maths and computer science and a low cost base that allows entrepreneurs to do more with less as companies grow.