CEE's deep tech scene has gained a new accelerator — for round one, Ventures Thrive wants the best new climate startups

A new accelerator has emerged in a bid to spark more innovative CEE deep tech startups. With €1.5 million of equity-free funds at hand, Ventures Thrive aims to spur climate tech innovation with its initial cohort.
CEE's deep tech scene has gained a new accelerator — for round one, Ventures Thrive wants the best new climate startups

Taking a view on central and eastern Europe’s deep tech innovation pool is likely to be critical as the EU aims to address its long-standing innovation gap, in a context of looming macroeconomic recession.

As speculation on a post-pandemic downturn has grown, pressure has piled up on European policy makers to find answers to the continent’s long-standing innovation deficit against its biggest economic rivals, namely China and the US.

Since the EU was expanded in 2004-2013 to include several CEE economies, there’s been a need for more venture dollars to the east.

Untapped potential in the CEE region flows from the area's resilient economic growth. Of the EU’s 10 former-Soviet bloc economies (Bulgaria, Czech Republic, Estonia, Hungary, Lithuania, Latvia, Poland, Romania, Slovenia, Slovakia.), only Estonia is forecast to record below 1% GDP growth this year (at 0.1%). 

2022 is likely to mark the final year of a growth spurt across CEE, with many economies having at times been defined by surging 5-7% GDP annual growth.

A drag from energy and cost-of-living pressures in the global context has become increasingly apparent recently, particularly in the latter half of 2022. Even so, the OECD is still projecting above-5% GDP growth this year in Hungary, Romania and Slovenia.

A key challenge for European innovation leaders has been figuring out how to bridge the gap for venture investment to reach deep tech from these high-growth markets. Even when expanding in western Europe, EU startups are hampered by a deluge of growth barriers as languages and cultures fluctuate and legal frameworks differ.

Ventures Thrive accelerator

Now a new accelerator has emerged in a bid to spark more innovative CEE deep tech startups. The Ventures Thrive initiative is being formed on the back of the ongoing European Innovation Council summit (Dec 7 and 8), where EIC officials had a further chance to sit down with VCs active across the EU. EIC is providing funding to this new initiative.

Wolves Summit, organisers of the largest meetup for CEE-born tech, is officially announcing the Ventures Thrive accelerator today alongside its initiative partners  Acceler8 and Anthology Ventures. The programme is set to showcase 32 emerging deeptech startups from CEE, with the promise of “equity-free” gap stage funding.

The partners hope that by forming the accelerator they can help to resolve funding shortfalls faced by young CEE deeptech startups compared to their western peers, while also addressing key growth challenges inherent with each emerging deep tech concept.

Deep tech specifically is a sector in which the EU faces a considerable battle. Earlier this year, a joint report from the EIB and European Patent Office revealed significant lags in patenting activity by European SMEs, versus their US peers, from 2010 to 2018.

To start with, Ventures Thrive’s partners have sourced a €1.5 million budget to fund CEE deep tech for the next two years, without eating into each startup’s equity value so early in the game.

During that time, the team expects to raise a further €7.5 million in equity funds, as well as securing €10 million in public funding and more than €1 million from procurement opportunities.

Climate tech will provide the focus for the inaugural Ventures Thrive cohort. The accelerator covers CEE ecosystems in the EU’s common market (as mentioned above), but also in the bloc’s inner and outer orbits. For example much of the Balkans region is covered, and the initiative runs right up to Ukraine on the Russian border and Turkey down in Asia Minor.

Ventures Thrive is also looking to extend the accelerator’s value by taking on a selection of non-CEE startups. The full list of eligible countries also includes Portugal, Malta, Greece and Cyprus, along with 13 or so CEE markets.

Michael Chaffe, the CEO of Wolves Summit, said the programme would aim to embed strategic goals from its partners into the cohort’s growth plans. 

“A core element of the programme is matching selected ventures with key challenges defined by our programme partners, with the ultimate goal of increasing the chances of commercialisation,” Chaffe said.

Ventures Thrive is poised to provide a starting point for CEE startups in climate tech, bringing them to a par with western counterparts in pre-funding stages of their development.

The challenge then will be to convince early-stage climate tech investors. Given that CEE has produced relatively few startups in key climate tech verticals, that means the rewards are there for VCs who get involved early.

A recent Net Zero Future50 report from PricewaterhouseCoopers found the best is still to come in terms of the CEE climate tech ecosystem, particularly in comparison to “more developed” climate tech hubs.

While flows of climate VC funding have so far been highly dispersed across the CEE region, (Poland is the largest CEE economy, but accounted for 4.65% of its climate tech funding,) a deep dive into climate sub sectors shows plenty of space for new entrants. Some of the climate sub-sectors said by PwC to be substantially under funded include energy (1.29% of CEE climate tech funding), and food, agriculture and land use (2.26%)

Wolves Summit helped PwC prepare the climate tech report, giving it a sense of key sectors for emerging deep tech startups that enroll in its first programme.

The announcement of the first cohort, which is set to kick off in March 2023, says energy, food, agriculture and waste will all feature, along with other climate tech-related areas like transport/mobility and sustainable finance. 

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