Quietly emerging as a hub for startups and investors, Moldova, a small Eastern European nation, with a population of 2.45 million and a GDP of $45.02 billion, is increasingly gaining traction in the tech startup ecosystem. Having gained independence from the Soviet Union in 1991, Moldova embarked on a mission to rebuild and prosper.
While many aspects show Moldova’s growth, one that is important for this article is thе flow of Foreign Direct Investment (FDI). In 2021, FDI surged to $264 million, up from $83 million in 2016, constituting about 35% of the country’s GDP. This signals a growing interest from global investors, showcasing Moldova’s potential on the international stage.
Despite being relatively unknown in the global business arena, Moldova possesses distinctive qualities that set it apart. Notably, it hosts Europe’s first e-park, the Moldova Innovation Technology Park (MITP), established in 2018. With 1200 active residents and 200 companies with foreign capital from 40 countries, MITP provides unique advantages for startups in Moldova, including access to a highly skilled IT workforce, competitive labor costs, favorable visa options, and one of the lowest taxes in CEE – 7% flat tax on revenue.
With a growth mindset and targeting international markets, Moldovan startups are increasingly drawn to the strategic advantages of collaborating with neighboring Romania, creating a mutually beneficial business dynamic. The shared language and the proximity facilitates cross-border ventures, providing Moldovan startups with access to the broader European market through Romania. Fagura and Planable are only a few examples of businesses that executed this strategy successfully. Simultaneously, Romania benefits from Moldova’s innovation and skilled talent pool.
For a closer look at Moldova’s startup scene, let’s delve into its initiatives and key stakeholders.
1. Number of Startups: 82 startups
Moldova’s startup scene has grown in recent years, with new companies emerging across industries. To date, Startup Moldova counts 82 names on their database, spanning from AgTech and InsureTech to WineTech.
2. Startup Funding: 11 Moldovan tech startups raised $11M in 2022
With heightened interest from both local and international investors, 11 Moldovan startups collectively secured $11M in funding, signaling increased confidence in the country’s entrepreneurial potential. VCs from the US, UK, Czech Republic, Poland, Ukraine, and Africa participated next to the local business angels. According to Startup Moldova, the average deal amount was €865k, with rounds ranging from €10K to $2.7M. In the ascending order of their raised amount, the startups that closed a round in 2022 are:
- XOR AI ($2.7M),
- Brizy.io ($2.4M),
- Greeno (€2M),
- ENABLD ($1.4M),
- Bloomcoding (€1.1M)
- Fagura (€786,845),
- SelfTalk (€150k),
- EdooSitter (€120k),
- EasyPlan (€90k),
- Doctorchat.md (€50k),
- UNDE.io (€25k).
3. Financing’s Landscape: 2 business angels groups & 6 other organizations
Moldova’s startup ecosystem is supported by a dedicated investor panorama who are there to support the founders with capital and experience. The business angel groups Business Angels Moldova, Mozaic, together with investiții.md, XY Partners, Startup Moldova, Moldovan Association of ICT Companies, Orange Moldova and Orange Systems, the European Bank for Reconstruction and Development, and the Western NIS Enterprise Fund play a pivotal role in supporting startups in their investment journey.
Besides this, CEE VCs like Gapminder, Credo, Fuel Ventures, Inovo, and others are often looking at Moldovan startups.
4. Tech Talent and Workforce: 20K+ IT professionals at MITP
With a robust pool of more than 20.700 IT specialists fluent in Romanian, Russian, and often English and French, startups can access unique skills in data analytics, UI/UX design, software development, application development, game development, etc. Also, taking advantage of tax reduction, the employer does not pay any additional taxes for hiring, all taxes related to salary income (salary, bonuses, benefits) being included in the 7% single tax paid.
5. Ecosystem Initiatives and Support: 8 incubators and supporters
The Moldovan government and organizations actively promote the startup environment. Initiatives such as conferences, incubators, and mentorship programs, created an enabling atmosphere for startups. Startup Moldova, Dreamups, Yep Moldova, Technovator, XY Partners, Moldova Innovation Technology Park, Future Technologies Activity, funded by USAID Moldova, Embassy of Sweden in Chisinau and a few others are the ecosystem builders mentioned on Startups Moldova’s community map.
Source: The Recursive
