How did 2015 go with Hungary’s startups?
At the start of the year, we kick off with a pioneering topic. In our first issue, we focus on the world of the startups, among others. Below is a compilation picked from computerworld.hu’s earlier articles.
In March, we wrote about SongArc, a Hungarian music app, already downloaded by 1.6 million people worldwide, presented at one of the world’s biggest independent film and interactive festival South by Southwest in Austin. The company was founded in July 2014 and became a real startup with the USD 55,000 investment realised by Traction Tribe and PBG FMC Venture Capital Fund Manager.
In April we ran the story about Comforce Ltd. hitting Red Herring’s list. Red Herring, a media company, lists Europe’s leadding startup companies at its Amsterdam event. In 2015, a Hungarian startup, cloud-based contact centre services provider Comforce Ltd. featured on the list. Since the foundation of Red Herring Europe Top 100 in 1996, only one Hungarian company could get listed and that was iData Ltd. in 2013, specialising in GPS tracking. In 2007, Hungarian online marketplace Vatera got to the final.
May’s big story was route planner Route4U, winner of the startup contest arranged by one of the most famous Hungarian startup Prezi. At this event, contestants had three minutes to present their startup. After the pitch, they answered the jury’s questions in two minutes. The jury looked into the concept’s originality, its market potential, the receptibility of the target group and the feasibility of the business model. Route4U created a clean route planner app for disabled person using wheelchair.
A help from an investment angel… is it not?
There is a problem we often face in Hungary that companies want to make use of a financial source right at their launch as they can’t wait until a life cycle when the financial injection would serve them most. However, investors ask after companies only when they become successful so as to minimise risks, said Gábor Vincze, head of the SME department at the Association of IT, Telecom and Electronics Ventures (IVSZ). It is a widely perceived problem that starter companies get help from only local investment angels, he added. This practice therefore restricts beginner companies also in Hungary. Global thinking and the use of the English language, however, can boost competitiveness. It is favourable that company founders come from different scope of activities. A marketing executive, a tech guru and an industry expert can turn out as a very fortunate and prosperous team. A challenge in the life of a startup company, however, is its ability to cope with uncertainty, a natural factor in the startup world. As for the timeframe, startuppers can only foresee a 3-6 month period, and, as a consequence, they have to keep adapting to different conditions.
If we look at the international arena, the Silicon valley and a couple of Asian countries have an edge on other competitors. And if we look at ourselves within Europe, our startup horizon can not be considered as being independent from our economic status. Of course, London and Berlin are ahead of us by all means. Nevertheless, the progress made by the Hungarian startup community is significant, Gábor Vincze said.
Investment, educational course, competition
Euroventures’ investment to RisingStack with the help of EU JEREMIE and the Swiss Contribution is in the range of 100 million forints. „We will use this to employ Hungarian software developers to serve rising customer demands. We will kick off the first quarter with opening our London office. Our mid-term goal is to get many Fortune
500 clients, said RisingStack chief executive Gergely Németh. Trace, a product to be soon presented by RisingStack offers a visualisation of system processes for internet services involving high-volume data traffic while giving fast error detection and correction mechanisms. In November, we wrote about „Get in the Ring”, a startup olympics in Hungary, where the best ventures competed to win the attention of the international investors. Like in a box match, two startup teams got to the ring to convince the jury of the excellence of their own concept or venture. The international final will be arranged in March 2016, in Medellin, Columbia.
Fully 20 startups were after financial executives, marketing personnel and sales managers at a management fair held on November 30. The event dubbed KarrierHub was organised by RoadRun-R incubator founded a year ago by the alumni of the Corvinus University’s Rajk College.
Startups based at the Technical University of Budapest are mentored by the methods of MIT (Massachusetts Institute of Technology) as of January this year – we reported in December. The story began two years ago when László Korányi, then deputy chairman at the National Innovation Office, got acquainted with the venture mentoring programme of the top university. At the announcement of the project closure, Mr. Korányi took part in his capacity as chief executive of Technopolitan Ltd. Lou Goldish, representing MIT VMS (venture mentoring service), said that the programme had so far mentored almost 2000 ventures and more than 3300 entrepreneurs. The aggregate sum of the injected capital is USD 1.95 billion.
Startup Success Club kicks off with UStream, Computerworld reported in December. The club, founded just recently, had its first club meeting on December 21 at Miniatűr Piano Bar in Budapest.