April 18, 2021

An Inside Look at the Slovakian Startup Ecosystem

In the last couple of years we’ve been hearing a lot about the rise of startup ecosystems in Berlin, Vienna or Prague but there has been a lot happening around in Bratislava too.

Slovaks are inherently a very creative and entrepreneurial nation and the forefathers of the Slovak tech scene started to work on their first business ventures not long after the collapse of communism in 1989. The country has a very long innovation culture and Slovaks historically invented several innovative products including helicopter or parachute. More recently Slovak engineers routinely ace finals of international coding competitions including Google Code Jam.

The startup scene opened up more broadly about 5-7 years ago with introduction of well-established international initiatives like BarCamp, Startup Weekend, Startup Grind and locally-grown Startup Awards competition. Currently, there is a strong and vibrant community of young motivated entrepreneurs meeting in over a dozen of incubators, accelerators and coworking places in Bratislava and other regional centres mainly around major technical universities (Zilina, Kosice). A big advantage is the very manageable size of the country. Everyone knows everyone, and mentors, angel investors and VCs are easily approachable at events or at parties. It is also a great test market for your B2B products since you can easily meet top level executives, corporate partners, VCs or angel investors. Slovakia works on 3 degrees of separation, which is perfect for getting things done.

Importantly, Bratislava – the capital of Slovakia is in a unique position in Europe. It is in a within a 1-hour drive from 3 major cities (Vienna – Austria, Budapest – Hungary, Brno – Czech Republic). As a result, vibrant startup ecosystems of these cities are becoming more and more interconnected which is further amplified by the so-called Danube Valley project. The renowned Pioneers festival in Vienna recently headlined Slovak AeroMobil (the world’s most advanced flying car) as one such example. There are two emerging regional clusters in security (3 out of top 5 global antivirus players) and cartech (Czech, Slovakia and Hungary are among the top producers of cars per capita globally). The close proximity in Danube Valley also means flying into Bratislava is very easy via the major airport of Vienna (only a 40-minute drive to Bratislava centre) combined with numerous low-cost flights connecting major European cities directly to Bratislava airport.

Additionally, the iGaming industry has emerged as a vibrant component of the startup scene in Slovakia, diversifying the entrepreneurial landscape further. With the digital revolution reshaping how people engage in gaming and betting, Slovakia has seen a surge in startups focused on iGaming solutions. These startups are leveraging cutting-edge technologies to offer innovative online gaming platforms, sports betting apps, and online casinos, tapping into the global iGaming market.

The regulatory environment in Slovakia has been adapting to accommodate and foster the growth of these digital gaming enterprises, making it an attractive hub for iGaming startups. This sector not only complements the existing startup ecosystem but also attracts a new wave of tech-savvy entrepreneurs and investors to the country. The presence of iGaming startups in Slovakia is a testament to the nation’s adaptability and its commitment to embracing new digital frontiers, further cementing its status as a burgeoning center for technological innovation and entrepreneurial activity.

The biggest challenge is to take Slovak startups to a global level. There are several companies that succeeded globally such as ESET (among the top 5 antivirus softwares globally with over $1bn valuation), Sygic (#1 offline navigation worldwide) and Pixel Federation (among the Top 20 Facebook games globally). However, many of the Slovak startups are still relying on bootstrapping and VC culture is not fully penetrated yet. In addition, despite very skilled engineering resulting in great products, Slovak startups often miss strong marketing/sales necessary to succeed globally.

On a positive note, Slovakia is one of a few European countries where public-private partnerships work really well. On the private side, SAPIE (Slovak Alliance for Internet Economy) a major driver of innovative and internet economy in the country was formed 3 years ago with over 20 members ranging from multinational players like Google and Facebook to Slovak icons such as Eset, Neulogy, Websupport and Martinus. What helps on the public side is that the Slovak President Andrej Kiska, a former serial fintech entrepreneur himself, is also avidly advocating an innovative agenda and uniting ecosystem with a strong vision. In addition, recent positive changes in the Slovak government and the cooperation with SAPIE enabled passing of the 1st wave of pro-startup legislation this year. Among the key elements are new forms of enterprise structure tailored for the needs of high-growth companies, tax incentives, startup visas and educational reform.

As Burton Lee, Head of the European Innovation and Entrepreneurship at Stanford University put it: “I was very pleased to see such strong progress in Slovakia in building out the startup ecosystem, in a relatively short space of time. I was also delighted to see you all cooperating and collaborating together, with government, universities, industry, associations, NGOs and other key stakeholders sitting around the same table, discussing the difficult issues, and seeking real results and changes, in a way that seems somewhat rare in CEE and other parts of Europe today.”

Slovakia startup scene is still waiting for its unicorn, however we had several inspiring early exits among Slovak tech companies included internet portals Azet and Zoznam, both started in 1997. Azet was acquired by Ringier Axel Springer in 2010 as one of the most popular websites in Slovakia (rumored to be valued at over $35 million). Zoznam was the first search engine and listing site in Slovakia, acquired in 2005 by Deutsche Telekom Group. In addition, Quatro and Triangel – later consolidated into Consumer Finance Holding with its large online route-to-market was bought by leading VUB bank for over $60 million in 2006. One of the two founding entrepreneurs is the current President of Slovakia Andrej Kiska.

More recent examples include 2013 GoDaddy acquisition of Czech-Slovak startup, a mobile website-builder app, for over $15 million. In 2014, Creative Web, exited its restaurant-aggregator portals and to Indian-American company and one of the leading retail design consultancy firms in Europe called 3070 exited for an undisclosed sum (allegedly over $30m valuation) to investment banking firm Genesis Capital.

The great thing about Slovakia is its manageable size, even the capital Bratislava is compact and easy to move around. When in Bratislava you should not miss visiting The Spot –accelerator (the member of CEED Tech consortium) and the coworking space full of tech Startups located in the city center or the Connect Coworking in the old textile factory Cvernovka that is also the home of the creative industry.

Last but not least, hang out in one of the cafes around town (such as Foxford, Gorila Urban Space or Kontakt) where you can always meet an innovative crowd.

For more info have a look at KPMG startup survey.

Startup Ecosystem
About Mary Frost

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