Poland saw an almost 70% jump in VC funding in 2020, with €477m flowing into Polish startups throughout the year, according to a new report by PFR Ventures and Inovo Venture Partners. This marks a new record for a country that’s increasing emerging as an important startup hub.

The number of Series A funding rounds in Poland also doubled in 2020 to 26, with Series B rounds tripling — albeit still at the low number of six. “Despite the uncertain market environment, 2020 was undoubtedly the best year in the Polish startup scene,” says Tomasz Swieboda, a partner at Inovo Venture Partners.

Healthtech focus

According to the report, a quarter of Polish startups that received VC funding in 2020 were involved in or around healthcare — perhaps unsurprising given the global pandemic — with enterprise software (15%) and fintech (9%) also highlighting the current focus of investors.

“Some of the startups have been around for a while, but the pandemic has increased significantly the demand for these kinds of services, and VC funds have started to invest in more of them,” concluded Aleksander Mokrzycki, vice president of PFR Ventures.

Meanwhile, 258 out of 310 transactions were based on public-private capital, which represented 62% of total financing. These were dominated by EU and government-backed programmes such as PFR Ventures and the National Centre for Research and Development, the latter playing an important role in seed funding rounds.

Polish ecosystem: Phase 2

Overall, the rise in VC funding flowing into Poland points to the growth of the startup landscape in the country and echoes similar developments elsewhere in the region.

“We are at an early stage of the ecosystem, but we have a huge potential in terms of the number of startups, and we have 40m citizens, so we are a big market,” says Mokrzycki. “We have entered a second phase,” he adds. “In previous years it was a try-to-create-the-market, but right now the market is created, but it is still in an early development stage compared to other countries.”

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