The members of TechAngels, Romania’s first and largest angel investor network, invested EUR 1,013,000 in the first half of 2023, a third of the investments made in H1 2022. Caution was the key word for investors worldwide, with Europe seeing both lower investment volumes (down 60.7%) and fewer financing deals closed.
The volatile macroeconomic context has led to both investors and founders hitting pause in the fundraising round process. Some of the startups have shifted towards bridge rounds and announced their intention to launch rounds late this year or next year, while investors have focused on backing existing portfolio companies.
13% of TechAngels investors funded startups they did not have in their portfolio, 22% opted for follow-on investments, 65% did not invest at all in H1, and only 11% plan not to invest at all this year.
“Our internal evaluation shows the willingness of TechAngels investors to double the amounts invested by the end of the year, with more than EUR 2 million indicated by group members to be available resources, if promising projects are identified. We are witnessing a shift to a new phase: we are seeing macroeconomic conditions somewhat stabilizing, inflation is decelerating, and energy prices are showing some stability. The ecosystem is seeing acclimation to uncertainty and there is potential for leaving the stand-by stance behind,” underlines Marius Istrate, new President at TechAngels.
Tech startups continue being committed to solving a wide range of problems that basically address every aspect of life. In the first half of 2023, business solutions dominated in terms of volume, with more than 25% of the evaluated startups offering new ways for companies to streamline their operations: whether it’s logistics (fast delivery, ensuring efficient supply chains) or tools for collaboration within teams and for employees. Marketing and user experience customization solutions ranked third in the segment of business ideas pitched by startups in the first half of this year.
Healthcare and B2C solutions, pertaining to personal life management options (finance, activities, fashion), each accounted for around 10% of the total solutions undergoing screening, ranking second and third in the overall classification of pitches. An overall increased focus on sustainability was noticeable during this period, both in terms of business and individual environmental footprint (such as fashion, choice of various food products, durables, etc.).
“This year, several startups that were already part of some of our members’ portfolios have reaped the benefits of investment appetite by successfully convincing new investors within our group. Generally, there is some seasonality to this, as investors typically assess their personal portfolios towards the end of the year and make investment decisions more quickly. This and signs of economic thawing make us optimistic about the second half of the year. However, it is key for startups to submit strong pitches, to document and demonstrate the need for the pitched solution, and to have a realistic business plan,” says Istrate who will head TechAngels for the next two years.
Istrate has more than 18 years of experience in the IT industry, where he has led and grown teams, with a focus on talent acquisition, internationalization and leadership team development. In that position, he has familiarized himself with the startup environments in Romania, France, Germany and the United Kingdom. In the period from 2017-2020, he was Chief People Officer with UiPath, where he helped expanding the team from 100 to 3,000 people globally. For three years, he has assumed an angel investor’s role.
TechAngels celebrated in June its 10th anniversary. During this time, the group infused more than EUR 40 million in the Romanian tech ecosystem. The association has grown from an initial membership figure of 18 to 132 members, while its extended community includes more than 240 startups in its aggregate portfolio, as well as more than 1,000 startups met in pitches hosted by the organization or through its various acceleration programs.