Slowly but surely Europe is gaining ground on the US through the efforts of its disruptive entrepreneurs, with many seeing Central and Eastern Europe (CEE) as the region most likely to produce the next unicorn.
Here, Poland is making its power play, with a rising tally of digital success stories, a well-developed startup infrastructure, and the new Google GOOGL +0.92% Campus in its capital Warsaw set to provide a catalyst for innovation throughout the CEE.
Poland has already produced a number of global tech startup successes, social learning network Brainly being one of them. The company reports more than 40 million unique users every month across more than 35 countries. Filmaster, recently acquired by Samba TV for €1 million ($1.09 million), is another.
Last year online healthcare appointment booking platform DocPlanner closed a $10 million Series B round, bringing total funding secured to $14 million. It is now operational in 25 markets in Europe, Africa, and Asia.
Significant IoT startups include Krakow-based Estimote and Kontakt.io, trailblazers of beacon technology. Estimote has made its mark on the retail industry by using beacons and indoor navigation technology to provide an integrated offline and online shopping experience that allows retailers to develop a more targeted promotional strategy. It recently secured funding of $10.7 million in a round led by Javelin Venture Partners.
Growth in fintech activity has seen the emergence of startups like VoicePin, a voice recognition-based identity verification system. No two voices are completely identical and VoicePin software can differentiate the unique characteristics of one voice from any other, and because the technology works with the microphone built into a smartphone it is cost-effective to implement. A number of organisations, including some major banks in Poland, are now using VoicePin in a range of applications, including mobile retail and online banking.
Atsora is another notable fintech startup. Its software is designed to help financial services organisations communicate more effectively with small business customers. This includes providing help to clients with business planning and cash flow management, and a more interactive customer relationship.
Travel tech start-up AudioTrip developed an app that turns a tourist’s smartphone into their own local personal guide as they explore new destinations. Founded three years ago in Bielsko-Biala, the company now has a London office and has received £277,000 ($403,000) in two funding rounds.
What of the next generation of Polish tech startups coming through? Among the ones to watch in 2016 are Krakow-based CallPage, developer of a widget that aims to boost the number of calls that businesses received from website visitors by 75% by offering free callbacks, and KoalaMetrics, which provides psychographic profiling services to telcos and m-tailers to help them better understand their clients and improve customer experience.
A recent report from StartUp Poland shed further light on the country’s digital economy. Its poll of just over 2,400 startups revealed that 39% were software development enterprises, mainly selling their products as SaaS. Of the startups that were growing at more than 50% annually, most were doing so through the sale of mobile and big data services to large corporations. Over half (54%) of Polish startups are exporting, abroad, mainly to the US and UK.
Sixty per cent of Poland’s digital entrepreneurs had bootstrapped their startups, and reported being profitable from the outset. Others have used EU funding and domestic and overseas VC funding.
Poland is rich in tech innovation and tech talent and its economy is in reasonably good shape compared with other European countries. As many experts have suggested, the focus must now shift from startup to scalable startup if they are to attract the growth funding.
EU funding is helpful but short term. While there are VC funds in Poland, including Protos VC, IQ Partners and Black Pearls, but growing companies will need access to more funds from overseas investors for later stage investment rounds.
With European fintech and e-commerce startups attracting more venture capital last year than any other sector, €12 billion ($13.4 billion), according to European Tech Funding 2015 Report, Poland’s tech entrepreneurs have plenty to feel upbeat about.
Polish startup momentum is growing, trailing European powerhouses like Berlin, London, and Lisbon, and yet to rank in the top 20 best start-up ecosystems in the world, according to the Compass Startup Ecosystem Ranking 2015 report, but based on its current trajectory, rapidly become Europe’s new growth engine.