In my last post I shared some data that showed Romanian diaspora founders have raised much more money than local founders in 2024. Now I’d like to share some caveats and observations that maybe were not that obvious + share why I think there are many opportunities at this moment for local founders.

Lack of series A rounds in Romania

In 2024, there were no series A rounds in RO. In the diaspora data series A represented about 60% of the volume ($60M). Hence, for pre-seed and seed diaspora volume was about $40M, hence about 2.3x higher. That’s easier to grasp.

This shows a gap in the local ecosystem - there are not enough companies constantly graduating to series A rounds. If we repeat the exercise for 2023 or earlier and include rounds of FlowX, Creatopy, Digitail and others, we might find that the difference against the diaspora volume is not as big as in 2024. Hence, 2024 data could be just a hiccup or it could signal a “still-to-mature” ecosystem. Everything comes in cycles / waves and this is much more obvious when the ecosystems are still emerging.

Some teams could raise anywhere

Most of the teams behind the diaspora data would have raised in Romania too. Take Datology (which makes almost 50% of the diaspora volume) as an example. Before starting, founders were leads of research / engineering at DeepMind, Meta, MosaicML and X. They are building a research based solution to improve AI by using less data. Their background speaks volumes and their timing is great. Of course they would have raised money anywhere in the world. Sure, maybe not the same amount, I agree. And why they didn’t do that in Europe is straightforward - they were already there.

The same applies for most of the other 8 startups. It’s not like they were in Romania, had some corporate jobs here and then decided to leave somewhere else for better investment landscape. There are few cases like these and most that I know are rather unsuccessful. If founders leave because the business makes more sense somewhere else, that’s great. But if they leave only because of the funding landscape, it’s quite questionable.

Good local founders will always find the money they need. They can pull off big checks too. We’ve seen that happening more and more in the past years.

And now let’s talk about the local context.

Local investors are not really happy with the local dealflow. “While few years ago there were maybe 5-6 good companies to invest per year, now there’s maybe 2-3 of them” is what I heard the other day from an investor (maybe the scale was a bit different, but magnitude of the difference is about correct).

There are some 3-5 years-old companies coming up again and again with new decks and little progress. Investors are kind of tired of them. Whenever there’s a new, ok team that starts working on something reasonable, it’s such a relief!

So here’s the bright side - I think this is such a good opportunity for new local founders. Local pipelines are not yet full - things might change soon btw! - and investors have to deploy capital. And if you’re one of the new teams around, it’s for sure going to be easier to at least be heard. Because you know - it’s all coming in cycles. And yes, past 2 years were not easy, last year there were almost no seed investments and most funds were at the end of their investment periods.

But hey, there’s new money now - Metis came up, Gap and EGV have new funds, Underline, Fortech, Catalyst and many angels are active, few other funds are still raising and of course there’s plenty of foreign investors waiting for you. Btw, foreign investors start lining up more and more - there are many that keep an eye on what’s happening here and Romania is one of the main countries they refer to when talking about CEE. Also, diaspora founders doing well do nothing but actually help build on the reputation of the Romanian founders.

That being said, please be ambitious - if you know what you’re talking about, have a plan, some validation and you are reasonable, you’re in pole position to find the resources you need!