Vestbee: VC Funding in CEE With A Notable Dip in 2Q 2023

Vestbee, one of the leading European platforms for startups, VC funds, accelerators, and corporates, has just published VC Funding In CEE Report - 2Q 2023. According to this quarterly overview, VC trends in the CEE region have been closely mirroring the global downturn as the total value of disclosed funding rounds settled at €560M. While this reflects a slight decrease compared to the previous quarter's €600 million, the disparity becomes striking when compared to the same period last year - in 2Q of 2022, the region boasted over €2 billion in startup funding.

Global Downturn and Cautious Investors

The second quarter of 2023 marked a significant downturn in venture capital investments worldwide, with an 18% drop compared to Q1 and a substantial 49% YoY decrease. Europe also noted a cooling of investor sentiment. Despite the availability of dry powder, VCs exercised caution, funneling a total of .5 billion into 1861 transactions in the continent.

According to Vestbee's analysis, the CEE region was similarly affected. Across 250 transactions, VCs invested €560 million. Notably, the number of transactions in the quarter remained similar to the previous year, but funding plummeted by over 70%. Several factors contributed to this decline, including increased macroeconomic uncertainty, reduced foreign investor participation, and limited availability of public funds. Furthermore, the continuous absence of mega-rounds added to the challenge, with only one secured by Estonian unicorn ID.me.

'The second quarter of 2023 has proven to be a challenging period for Central and Eastern European startups. This can be attributed to various factors, including changing market dynamics, concerns about future fundraising...