With a financial commitment for investments totaling EUR5 million in the next five years, BCR Seed Starter is set to provide equity to a portfolio of innovative start-ups that have the potential to optimize internal banking processes, enhance the portfolio of services offered to BCR clients or support its ESG goals.
In exchange for a minority stake in the invested startups, BCR Seed Starter aims to stimulate sustainable growth by diversifying the available capital sources for start-ups, while offering a flexible alternative to the traditional bank financing model.
“We are proud that BCR Seed Starter opens a new chapter in the Romanian banking sector, becoming the first corporate venture capital company launched by a bank. This endeavor leverages BCR’s corporate assets to not only tap into new markets and build new business models, but also to enhance the innovation made in Romania. BCR Seed Starter will give start-ups the opportunity to develop, test, adapt and offer value-added products to the BCR and Erste ecosystem or directly to the bank customers. The collaboration will be on a non-exclusive basis, as our goal is to help startups grow in their target markets. Our aim is to invest an average ticket size of EUR 500,000, in exchange for a maximum of 24.99% non-controlling equity stake”, said Carmen Dibus, CEO BCR Seed Starter.
While venture capital activities in Romania have increased significantly from virtually nil in the last decade, it still lags behind the EU average and other CEE countries. Romania has placed as the fifth country in CEE for VC funding raised in 2022, behind Estonia, Czechia, Croatia, and Poland, which collectively account for 70% of the total funding volume in the region, according to Romania Venture Report 2022. Moreover, Romania has a funding shortfall of nearly EUR 7 billion for startups compared to its Central and Eastern European neighbors, raising only EUR 128.2 million in the period 2018 – 2021. This figure is overshadowed by a robust regional performance, as a study conducted by ROPEA and Deloitte highlights, which is based on data provided by Invest Europe, one of the largest global associations of PE and VC. BCR Seed Starter is thus positioned as a strategic partner in changing this dynamic, amplifying the innovative potential of Romanian startups, in a moment when the tech startup capital is scarcer.
The funding comes entirely from BCR. Equity investments in startups will be made from BCR Seed Starter’s own funds, two strategic investments being targeted in 2024.
BCR Seed Starter opens the door to the entire Erste Group ecosystem and potentially to its clients, offering not just financing via equity contributions but also a strategic partnership with its counterparts in the group, Seed Starter České spořitelny and Seed Starter Slovenskej sporiteľne, thus amplifying the impact on startups in the early, “pre-seed” and “seed” stages. With BCR Seed Starter entering the shareholding structure, startups will have the opportunity to collaborate directly with the BCR Group, benefiting from trust, expertise, network, and growth opportunities.