Insiderblog.hu: Summer startup news
There is no summer heat that could stop the creators of Insiderblog.hu publish a range of exciting posts. Here is a quick roundup of selected news from June and early July. What is going on in the Central European startup scene? What are the latest trends? The Jeremie II program has arrived, Budapest needs to catch-up in biotech & investment culture, while a university in Sopron does its best to support talent.
DayOne Capital’s first investment
DayOne Capital has invested HUF 70mn (approx. USD 305k) into Flan Technologies Ltd. The Hungary-based company is developing tag-based online advertisement solutions and audio-visual applications. György Simó, general manager of DayOne has told Insiderblog.hu that the startup company has a very talented team and they have a great chance to build up an international success story with their products. Flan Tech’s flagship product is AdFlan, an ad-campaign manager software.
Hungarian biotech sector lagging behind in international rankings
In the last three years only 3 new companies were founded in the Hungarian biotech sector. This number is very low in contrast with pre-crisis level growth from 53 to 83 between 2004 and 2008. According to the Hungarian Biotechnological Association, at the moment it is very unlikely that the Central European country could catch up with leading biotech innovator countries like Germany and the UK, but not even with Norway or Austria. The current size of the industry in Hungary is more comparable to that of certain regions, i.e. Vienna or Berlin.
In 2009, with the help of EU funds a Technology Transfer Office was opened in Sopron at the campus of University of West Hungary. As dr Katalin Walter, director of the office told Insiderblog.hu, there have been profound changes during the past three years: more and more students and researchers knock on the office’s door, asking for help to realize their ideas. They receive infrastructural and financial help. Surprisingly, the highest number of ideas come from the Department of Applied Arts, mainly in the form of new design ideas and product ideas.
Levente Zsembery: analysis of the Jeremie II program
Insiderblog.hu has published a post by Levente Zsembery, managing director of Biggeorge’s-NV Equity, a venture capital fund. The upper limit of seed capital has been raised to EUR 300,000, however, it might still not be enough for building a competitive development team. On the other hand, funds might not be able to find 20-25 investment opportunities of this type until 2015. For growth funds, now it is possible to use the invested capital for acquisitions. The income limit for target companies has been raised to HUF 5 bn (~USD 22 mn). The yield above the EU base rate will now be cashed in by private investors.
Budapest startup spirit – why is it different?
What are the characteristics of the Budapest ecosystem? What makes it different? For instance, founders tend to “diminish” overtime (for the exceptional Prezi). Also, investors potentially demand a 70-80% ownership of the startups – i.e. the trend is showing an overwhelming tilt towards a majority stake. Also, investors are keen to use their power to remove the management. It would be extremely important for investors to not only seek short-term profits, but also to have long-term plans and lay the foundations of a fruitful startup scene in Budapest.
