10 startup predictions for 2019 in Romania

An early-stage investor’s perspective on what will happen on the tech stage in Romania this year

Several factors are working together towards creating a favorable context for launching a startup in Romania. Firstly, is the recent abundance of VC and PE money: four funds launched in ‘17 and ‘18 and another one or two are announced for this year; €220–250 million in total to be deployed in the market within the next 5 years. Add to this the positive press for tech startups, the success stories of the first Romanian unicorns, the relative availability of tech co-founders and the ever-growing sex appeal of being a startup CEO and you’ll get to the same conclusion:

There’s never been a better time to start a startup in Romania.

2019 announces itself as a year of growth for the local entrepreneurial ecosystem — here are my 2 cents on what will happen next year.

1. A good year for shared office space

The growth, both in number and in market capitalization, of shared office space operators that we noticed in 2018 will continue in 2019. This is the natural reaction of the office space operators trying to onboard small size teams that would otherwise work from Starbucks.

In the not so distant future, I expect building owners to start behaving as shared office space operators, in terms of building and monetizing their captive communities of tenants.

2. The emergence of 5G startups

This is more like wishful thinking — more startups will show up with solutions that would leverage the incoming 5G technology and would empower home users and businesses in new and unexpected ways.

The increase of speed that 5G brings should make us think of 5G more like a new platform than an upgrade of the existing telco infrastructure — this opens a new world of possibilities and I just hope that founders will be bold enough to engage this opportunity.

3. The ever-growing e-commerce will… continue to grow

This is supported by several favorable factors such as the increasing usage of card payments, urban lifestyle, heavy in-city traffic and limited available time to spend doing traditional shopping.

Yet, the Romanian e-commerce ecosystem still needs end-to-end fulfillment services like Shipwire in the US.

4. Still a bad year for GDPR

At the beginning of 2018, GDPR compliance was the one problem that dozens of Romanian startups rushed to address. But reality proved that GDPR was not the game-changing law that everyone feard. Instead, it became the source of annoying pop-ups and ever-larger banners that we now need to close on any website.

Most probably, nothing much will happen in 2019 either. And even if some fines will make the headlines for a few days, GDPR will only take its place among the many other regulations companies have to comply with in order to do business in the EU.

5. PSD2 will be the new GDPR

PSD2 will be the GDPR of 2019. Because, just as with GDPR, PSD2 is neither an actual problem for the incumbents (banks) to solve nor an opportunity for startups to monetize. Yet, many startups will throw themselves headfirst into trying.

6. Low M&A activity

This is a subject I need to elaborate on — it is simply too large to address in the economy of this blog post.

7. Corporations will continue to fake innovation

The number of corporate accelerators, incubators, innovation programs, startup competitions, corporate-sponsored conferences, pitching contests, and events will increase even further in 2019.

As startups continue to grow more and more popular, especially with younger generations, corporations will continue to invest in faking innovation as a mean to improve their image and rejuvenate their recruiting base.

8. Not yet the time for agritech

In my opinion, agritech is one of the most promising opportunities for Romanian startups and one vertical that should become a national priority in the years to come. I have already met several teams, unfortunately working on similar ideas, which is never a good sign. Common ideas, think-alike solutions, already-seen products, these are signs of laziness and choosing the easy way. Rarely the recipe for success.

9. The year of infrastructure projects in mobility

Maybe this is just something else that I need to hear, but 2019 should mark the beginning of a deep transformation for the mobility industry in Romania. Corporate giants in energy, oil & gas, and automotive as well as local authorities announced their intentions to build charging stations and to contribute to the electrification of the auto industry. 2019 should bring the first concrete actions if not even the first results in terms of increasing the EV adoption.

10. Corrections caused by the economic downturn

I met more than 100 startups in 2018 and the record for the highest valuation is being held so far by a startup that was trying to raise at €100 million pre-money. Childish, TechCrunch-induced dreams that are quickly corrected by the reality of life.

2019 should bring a correction to the unsubstantiated valuations that we’ve seen lately. One possible reason is the economic downturn, the other is the natural reaction of entrepreneurs to repeated rejection.

I promise to come back to this blog post at the end of the year and laugh at how bad I am at predicting the future.