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Central and Eastern Europe (CEE) has changed a lot in the last ten years. It went from being behind in tech to being a leader in new ideas. Even with all this quick growth, many people elsewhere still don’t see it that way. They think it’s a shaky, small market that can’t really expand. Serhiy Tokarev talked about why these old ideas stick around for business folks and how they can get past them.
Advantages of the Central and Eastern European startup ecosystem
Since 2014, the total value of startups in the region has grown 15.5 times. Poland’s doing great, pulling in over €2 billion in venture capital this year. They’ve got some awesome product companies too, like ElevenLabs and Docplanner. Even with everything going on, Ukraine still has a huge number of tech people – around 340,000. Romania has over 202,000 techies and a €19 billion tech world, where you can spot big players like UiPath and eMAG.
These different areas do share key benefits that make this region a strong rival:
- Depth of technical talent. A long-term focus on STEM education has created a stable stream of highly skilled engineers in Central and Eastern Europe. The region’s specialists are known for their combination of deep theoretical knowledge, discipline, and ability to solve complex technological problems in practice.
- Ability to scale at a lower cost. Dev salaries are much lower than in Western Europe or the US. When you’re just starting out, this lets teams expand, try more stuff, and get solid product results without burning through tons of cash.
- A culture of execution and resilience. Investors often describe founders in the region as extremely practical operators. Since they’re used to building companies on a tight budget, they put their energy into quick prototypes, steady improvements, and hitting clear goals.
- Focus on the global market. Since the domestic markets of CEE countries are relatively small, startups rarely seek to limit themselves to a local audience. Many teams start as remote-first and develop products for international users, which allows them to enter the EU, US, and global markets faster.
Myths that no longer correspond to reality
Serhiy Tokarev lists several of the most common assumptions that still guide some investors and funds.
Myth 1: CEE is primarily about outsourcing
Although outsourcing data is still important in our area, and throughout the world, companies such as Grammarly (worth around $13 Billion in 2021) and Eleven Labs (worth approximately €3.3 Billion in 2025) are demonstrating that we are also heading towards new and innovative products.
Myth 2: CEE lacks investment
Actually, the numbers tell a very different story. Poland got over €2 billion in 2024. And, the investment funds aimed at the area doubled between 2017 and 2023. Many investors are saying that the big issue isn’t a shortage of money, but not having enough startups that are ready to grow big.
Myth 3: The region is too politically unstable
Risks change a lot from country to country. The Czech Republic and Poland are in the EU, so they have pretty steady rules compared to newer markets. Even with the war, Ukraine is still holding up pretty well.
The main challenge: maintaining the founders’ connection with their native ecosystems
If there is enough money, what is holding the region back? Most often, it is the outflow of founders and the lack of return of their experience to local communities. Serhiy Tokarev says that for things to really grow, we need solid education and mentoring to help future innovators. He mentions Ukraine’s science and tech programs as a good example. Things like community programs, career advice, and organized mentoring can help build up talent so young experts will want to stay and work in Ukraine.
“Over 90% of Ukrainian innovative companies relocate their headquarters abroad; even in Estonia, a stable EU market, more than half of startups take this step,” notes Serhiy Tokarev.
Currently, the Central and Eastern European market needs to attract those who have already built successful international companies: retaining operational teams at home, mentoring, angel investments, or creating their own venture funds, as the founders of Glovo did in Southern Europe. The continued presence and practical assistance of experienced entrepreneurs can accelerate the development of the ecosystem much more than any additional funding.