According to the latest report “Polish Startups” issued by the Startup Poland foundation, the current revenue situation of startups is better than a year ago. More than half (51%) of them generate significantly higher revenues than last year, and 26% achieve at least slightly better revenues than a year ago.
As many as 55% of startups have not yet used external funding, and those that did have most often raised a total of PLN 1-2 million (31%).
Artificial intelligence (AI) is the most often indicated keyword by Polish startups, best describing the nature of their main product or service. Every third startup (33%) considers AI, deeptech, and IoT (Internet of Things) as their keywords.
The 9th edition of “Polish Startups” report is published annually by Startup Poland foundation. There is a slight cool-down in mood in the market, despite half of the startups generated significantly higher revenues compared to the previous year.
The president of the Startup Poland Foundation, Tomek Snażyk, admits that the current year is less optimistic when it comes to VC funding. Despite these challenges, he proposes solutions such as investment incentives, further simplification of starting a business and its operations, reduction of bureaucracy, support programs for foreign expansion, or easier access to participating in public tenders.
Foreign markets, especially the US, started to show a negative trend in 2022. However, Poland has not yet been hit by it. Interestingly, the total value of investments in each of the three full quarters amounted to PLN 420-450 million, a total of almost PLN 1.3 billion, more than in 2019. Importantly, the number of A and B rounds has also increased, which means that Polish innovative companies are developing and raising capital for expansion.
An interesting development direction for Polish startups may be a noticeable rotation towards globally popular segments like AI. Polish startups consider AI, deeptech, and IoT as the keywords best describing their main product or service.
Notably, AI also has applications beyond the innovative IT companies, as it is also making gains in the agricultural-food market sector.
However, running a startup in Poland is not without its challenges. The key barrier to growth is the costs of employing a worker, as indicated by 54% of respondents. The second most frequently mentioned barrier, signaled by almost every second startup (49%), is the problem of raising funds in the subsequent development phases.
In addition to struggles with securing financing and increasing hiring costs, startups claim that a large problem is too much bureaucracy in running operational activities (37% of respondents).
The profile of an average Polish startup founder shows that they are based in the Lower Silesia or Masovian voivodship, aged 26-35, hold a master’s degree in hard sciences, and have prior experience either running their own non-startup company or working in a private company or corporation. The study also highlighted the importance of gender parity within startups. While there is a disparity with more men than women in these companies, the market already has a significant group of companies (22%) where the majority of the team are women.
