Romanian Tech Startup Association’s (ROTSA) fresh report on the COVID-19’s impact on Romanian tech startups reveals that the pandemic effects were very nonlinear depending on the industry and on the startup size, however over 70% of the startups confirmed that COVID-19 affected their business to some extent. The study also draws an up to date image of the Romanian tech startup profile and highlights some key findings.
“The impact of COVID-19 on Romanian Tech Startups” is the latest research conducted by ROTSA, dedicated to tech startups founded no earlier than 2015. The study wanted to identify the impact, needs and opportunities of tech startups related to COVID-19. Thus, the study aims to highlight how technology startups in Romania adjusted their business strategy and what decisions they took in managing their business.
The Romanian tech startup profile
The startup ecosystem in Romania started to grow in 2017, when the number of newly founded tech startups tripled compared to the previous year, with the most thriving local tech startup ecosystem being based in Bucharest, followed by Cluj, Timiș and Bihor. It was shown that the highest earners were in Automation (38.1%), Fintech (31.8%) and Marketing (12.1%).
Regarding the tech startup profile, the study revealed that usually the new businesses are locally incorporated, with under 4 years on the market and no more than 4 employees.The annual turnover is of €150K and the biggest employers in domaine such Fintech (35.2%), Automation (35.2%) and Marketing (14.2%).
Regarding the startup’s expansion, the responders of the survey identified France, Spain, Italy and Poland as the main represented markets in Europe, while indicating and pursuing opportunities in markets such as North America and South-East Asia.
The study also looked to find more about the business model used by tech startups. The result showed that a significant part of startups included are providing their services / products to other businesses (B2B, 43%). More than that, the study revealed 1 in 4 startups uses a mixt business model, addressing its services / products to both individual and organizational consumers, while also using subscriptions.
Given that the growth of a startup requires funds, in order to sustain the operations and expansion, for Romanian tech startups, self-financing is the main source of funding, while 36% of them have raised private funds. Due to the lack of information in this area, accessing funds is a main challenge for tech startups. The main need expressed is the access to funding. Be it public or private, the surveyed startups are looking for investments to fund their operations and expansion.
Startup life is very dynamic and requires a lot of stamina, flexibility, vision and capacity to adapt. The pandemic brought not only a lot of challenges and constraints, but also opportunities for medtech startups, fintech or tech startups using AI technologies, revealing also some good examples of reinventing and coming up with new products.
The study was meant not only to look into the past, but also to see a bit in the future, to cherish this growing startup community, the organisations coming together to support the startups and the people behind them.
“We want to help Romanian tech startups in the next period of time to connect on European level, which could be a huge opportunity for regional scaling of business ideas”, said Cristiana Bogățeanu, Executive Director Romanian Tech Startup Association (ROTSA), upon the launch of the report.
The full study can be downloaded from here.
Romanian Tech Startup Association
Romanian Tech Startup Association has risen from the need of bringing together and building a community around technology startups in Romania. Even though the name and public communication were created this year, the organization is assembled on a foundation started in 2010. Since then, the organization has joined as a partner or implemented a series of large-scale projects in the area of entrepreneurship development in Romania.
ROTSA’s vision is to develop and support the ecosystem of technology startups, aiming to become at the same time a connector for its main actors and a link with other already existing international ecosystems. Consequently, the organization has a catalytic role and aims to become the unitary voice of Romanian Technology Startups, built on programs of practical education, transparency, mutual trust, collaboration and knowledge sharing.