LFP198 – Tech/Fintech in Central and Eastern Europe w/Adam Niewinski co-founder OTB Ventures

There are at least 70 cities in Europe which have at least one unicorn in them – a very different pattern from the US/UK ecosystems. Over 20 of these cities are in Central and Eastern Europe (CEE). There is thus far more to CEE than a place to near-offshore your tech or dev team. In […]

There are at least 70 cities in Europe which have at least one unicorn in them – a very different pattern from the US/UK ecosystems. Over 20 of these cities are in Central and Eastern Europe (CEE). There is thus far more to CEE than a place to near-offshore your tech or dev team. In this episode Adam gives us both a tour de force et tour d’horizon of the vast region that is CEE –  – I was certainly impressed with my lack of knowledge of the tech landscape in the region which has developed super-fast. 

Adam is a rara avis having been a multiple-times founder, bank CEO and now long-term regional VC so has a super-good 360 degree perspective on the area which he leads us through.

Five years ago Adam co-founded OTB Ventures, an early-stage CEE VC based in Warsaw, who invest $1-15m in their CEE portfolio companies,

Topics discussed include:

is tech concentrated in Warsaw or is it spread around Poland?
other tech hubs in Poland
Adam’s career journey – from great anecdote about how he started at BCG through founding several companies including perhaps of the first Fintech in the region in 2000 and Bank deputy CEO-ing
experiences in Ukraine [in passing the podcast was recorded before the recent troubles]
Angel-investing experience
pivoting from Angeling to VC with a buddy who had been in Intel Capital for 18 years
Kiev back in the day
when was the CEE tech boom?
reviewing the major features of the tech landscape in:

Poland – 15-20yrs ago gaming industry was the early market leader with global reach; other sectors increasing over past 5yrs.
the mid-size country gap – market big enough to get some success but not so small that one has to globalise right away
Finland (some count as CEE (?!)) – very key
Estonia – the largest number of tech unicorns per million people in the world
Lithuania
Ukraine– less local market and more connected to the US market
Czech – cyber-security especially
Slovakia – developing fast
Romania – UiPath listed on the Nasdaq is now worth $20bn…
Bulgaria – eg Payhawk (who were the guests in LFP187)

the importance of local successes in encouraging other entrepreneurs to believe that they too can create a success in the country
reasons to offshore in CEE:

price – pre-pandemic techies 1/3-1/4-ish of London rates, now ~1/2 London rate
quality
quantity
longevity as market less hot

how to use CEE

less about offshoring and more about putting the whole tech team in the region
centering on a co-founder moving back into the region
centering on a key tech guy in the region
key-person-centric rather than “map centric”
importance of not just regarding people as “interchangeable resource” hence importance of deep cultural insight into the country one chooses in CEE

importance of global market thinking – eg Klarna, Transferwise
outlook for next 5-10yrs
“innovation is no longer happening in corporations but in startups by entrepreneurs”
funding is now available in CEE countries
“if the tech is good it is global not local”
the long-view as the current tech boom marking the end of the WW2 period with CEE back as part of the continental economy
OTB Ventures stands for Outside of The Box Ventures
supporting founders not telling them what to do
what he role of an investor is
OTB focuses on real/deep tech – disruptive technologies that scale globally

And much much more

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