Almost half of the AI startups that want to attract funding in the next two years aim for amounts of over EUR1 million, mainly to expand internationally, to increase the team and to launch new services and products.
“Even in the face of adversity, Romanian AI/ML startups continue to secure substantial funding rounds. As per a recent study by Activize, of the EUR69.2M accumulated by Romanian startups in H1 2023, the three highest contributions came from AI/ML enterprises: FlowX with a EUR35M Series A, Kubeark with a EUR2.7M pre-seed, and Techcelerator graduate Veridion with a EUR5.5M late seed round. This strongly suggests that companies in this sector, including those established as recently as 2020 like Veridion, are successfully reaffirming their worth”, said Cristian Dascalu, Managing Partner of Techcelerator and Partner of GapMinder.
The report had two objectives: the first was to identify and map artificial intelligence start-ups in the region, and the second objective was to collect information about their evolution starting from 2022 (development stage, attracted or targeted funding rounds and future goals).
More than half of the identified startups were launched after 2020. Also, 10% of the startups in the previous edition of the report exited the market, more precisely, under ten entities.
A third of survey respondents said their main goal for this year is to attract more customers. Other important objectives of founders are to attract a new round of investment, to increase their team, to enter new markets or to launch services and products.
More than half of the responding entrepreneurs have already attracted investments, and a third of the already funded start-ups obtained rounds between 500,000 and EUR1 million. More than 10% attracted amounts between 50,000 and 100,000 euros. Less than one third of participants did not attract investment.
The biggest challenges startup founders face is that they can’t find the right employees, they can’t attract the financing they need, and they can’t secure the cashflow they need to operate. They also consider it difficult to expand internationally and they find the bureaucratic process difficult in Romania and in other countries where they are present.
For this survey carried out between October 2022 and January 2023, 52 startups responded, around 80% of them from Romania and the rest from Greece, Croatia, Bulgaria, North Macedonia and Turkey.