It is not a secret that the European VC market is considered to be more conservative and less addicted to high risks. However, there are some nuances and undercurrents that allow Europe to occupy the first positions on many indicators. About the present and the future of the European VC market says the Managing Director of incubator hub:ruam Krakow Jakub Probola
InVenture: What is the situation in the European VC market?
Jakub Probola: As we know, Europe was always more conservative in terms of many markets, than the rest of the world. The same situation is within VC market, which is less active in comparison to USA or Asian region, because of long procedures and due diligence. However, according to last KPMG report, in last quarter European VC-backed companies have raised more than $3,6bn. It shows a potential for market growth and more active involvement of public funds and corporate investment in Europe.
InV.: How do you think, what mood prevails among VC-investors? Whether are they ready to invest actively in innovative projects?
J.P.: European VC-investors are active in searching of the new big projects. They are more interested in early stage startups and focused on seed or round A investment. Fortunately, across the Europe there are very good conditions for developing of proactive ecosystem of incubators, accelerators and R&D infrastructure to grow innovations. On the other hand, Europe provides a huge public support. In the period from 2014 to 2020, the European Union expects to invest €121bn in R&D, innovations and ICT.
InV.: Which regions and sectors in Europe today are the most interesting for investment? Why?
J.P.: All Europe is interesting in terms of searching for investment, as you never know which project from which country will succeed. Usually investors focus in some particular region because of their expertise, legal issues and network, but it’s not obligatory. For instance, hub:ruam Krakow is looking for projects from CEE region, however we also have a startup from Portugal in our portfolio. As to the sectors, we are mainly interested in Mobile, IoT, Connected solutions, Cloud, Industry 4.0, e-Health, Big Data and Security, because in these sectors we can provide to our mentorship, infrastructure and marketing support to startups.
InV.: In which country of the region the startup industry is developed better / worse? In your opinion, why?
J.P.: As to the CEE region, I think Poland has a big potential to become a start point for early stage projects to test hypothesis and prepare them for boosting on international markets. Here there is a wide network of R&D centers, incubators, accelerators across the country with large number of experts from different sectors. Also, it is the biggest country in the region with almost 40 millions of people which could be a good test market for new solutions.
InV.: Please name the five most promising, in your opinion, startups in the region? Why are these projects?
J.P.: I would not like to name particular projects, but I believe in startups in our portfolio and think that they could succeed globally as we provide them with necessary resources to prepare a product or service to commercialization on markets thanks to T-Mobile and other Deutsche Telekom operators
InV.: How European investors regard about Ukrainian projects? What prevents to invest in them? What conditions need to perform to change this situation?
J.P.: We as a hub:raum Krakow started cooperation with Ukrainian startups from the very beginning. EcoisMe was the first Ukrainian startup, which was accelerated by the innovation center in 2014. Later they also got investment from hub:raum Krakow. This project was a finalist in the first WARP Accelerator. We notice every year that the number of promising Ukrainian strartups grow and invite them to our acceleration programs with potential follow-up investment.
InV.: In your opinion, what are the most promising trends of the European VC market for the next 5 years?
J.P.: I see a potential in Smart/Connected solutions, Information Security, Industry 4.0, Big Data and Internet of Things. Based on these trends we created together with Cisco and Intel an IoT accelerator ChallageUP! that offers European startups a go-to-market support leveraging the resources of three big corporations.
Biographical note about Jakub Probola
Jakub Probola is Managing Director of hub:raum Krakow, the Innovation Hub for CEE startups, baked by Deutsche Telekom. In the past he was heading innovation unit at
T-Mobile Poland – from the beginning of his career he was responsible for finding new potential value streams that could be delivered to customers. For many years associated with the startup environment. Was a mentor at How to Web, mentor and speaker at Wolves Summit and speaker during Impact’16. Working with startups he appreciates addressing new needs or old needs in new, innovative way and above all the ability to complete and pragmatism. As the biggest surprise in the industry over the past few years he considers many interesting projects from eHealth branch as well as emerging projects from aviation and space industries. Analyzing the situation on the market he foresees particularly bright future for innovations from medicine, robotics and transportation sectors.
Material prepared by Mila Lerner / InVenture Investment Group