Fintech in CEE: Startups, Focus, Market Comparison, Funding Trends

© Fintech Atlas, Raiffeisenbank International
© Fintech Atlas, Raiffeisenbank International

More than two-thirds of the people in Central and Eastern Europe will be using digital banking services by the end of 2020 and this will lead to a growth of the digital markets in the region, states the latest Fintech Atlas Report by Raiffeisen Bank International. The annual report gives insights into 19 fintech ecosystems across CEE and their performance in 2019. According to it, the differences in digital banking penetration between Western European markets and CEE are melting significantly in the past years, a process which is accompanied also by the development of more and more fintech solutions in Eastern Europe that also attract more investors’ interest.  

The research shows that, thanks to massive efforts in the field of digitalization, Central and Eastern European markets are attractive for fintechs as well as for partnerships between fintechs and banks established in the region, reads the report.

CEE fintechs: focus and funding trends

The Fintech Atlas gives an overview of the CEE fintech markets in terms of the number of startups, cumulative funding they’ve raised since 2008, and also the areas in which most of the active startups are working, which are not necessarily the same areas that attract most of the financing. 

Retail and SME banking, followed by technology (e.g. dev tools, internal banking systems, etc.), are the areas in which most of the 1138 featured CEE fintech startups work, according to the data. Since 2008, the fintech-related funding in the region is around €1.65B, whereas technology and retail banking are the most funded segments. 

The figures show that 2019 recorded a new peak in the level of fintech investment in many CEE markets. Compared to 2018, the markets in Lithuania, Bulgaria, Hungary, Romania, Slovakia and Ukraine showed strong growth in investment. 

Notable investments (over €5M) were made in companies such as SME Finance in Lithuania, Software Group in Bulgaria, Twisto in the Czech Republic, Minit in Slovakia, and XOLO in Estonia. A visible trend is that local funds are increasingly focusing on the fintech vertical, note the authors of the report. Among the funds that close deals in the space are Speedinvest from Austria, Startup Wiseguys from the Baltics, Eleven Ventures from Bulgaria, ENERN from the Czech Republic, Hiventures from Hungary, Speedup Group from Poland, Gapminder from Romania and Revo Capital from Turkey. 

Here’s what else the data collected by Raiffeisen Bank International says about the region:

# active fintech startupscumulative funding 2008-2019 in million eurosfocus areasmost funded areasfunding trends
Austria8748retail banking, technologywealth managementseed, series A
Estonia162108retail banking, SME bankingSME bankingseed, series A
Latvia71667retail banking, SME bankingretail banking
Lithuania10138retail banking, SME bankingSME bankingseed, debt
Bulgaria5262retail banking, technologyTechnologyseed, debt
Czech Republic7144retail banking, technologyretail banking
Hungaria4640retail banking, technologyTechnologyseed, series B in 2019
Poland15479retail banking, SME bankingRetail bankingseed/angel investments
Romania5014 (*excl. FintechOS 12.6M deal)retail banking, technologyinsuranceseed/angel investments
Russia178458retail banking, technologyRetail bankingSeries A
Slovakia3814SME banking, retail bankingtechnologySeries A
Turney1986retail & SME bankingSME, corporate bankingseed/angel investments
Ukraine1064Retail banking, technologyRetail banking


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