Hungarian capital is among the Top 25 European Ecosystem in Affordable talent
Hungary
Budapest
MEMBERS:
Express Innovation Agency
HUNBAN
NRDIO
“Hungary is well known for its tech talent and deep tech expertise, and as it gets paired with sales and marketing talent from the West, we get a powerful combination. As an undervalued ecosystem, there's room for growth, which also means opportunities for startups, investors, and ecosystem players alike.”
Highlights
Hungary’s lively capital boasts a long history of cutting-edge research and scientific progress, a deep pool of innovative talent, and excellent connections to European markets. Hungary is home to around 2,900 startups that together employ more than 10,000 people. Collectively, these startups have raised over €1.4 billion in funding. Besides Budapest, Debrecen, Győr, Pécs, and Szeged are also growing startup launchpads. Success stories from Hungary include online fraud prevention SEON, GoTo (which was acquired by LastPass), and mobile DevOps platform Bitrise.
Foreign investors brought €6.5 billion to the country in 2022, an all-time record. In total, 92 large foreign direct investment deals were closed. The battery industry is a particular hotspot for investment, with 38 projects from South Korean, Japanese, Chinese, and American companies.
Hiventures, from the Hungarian Development Bank, is one of the largest government-backed VC funds in Europe, managing over $220 million. It invested HUF 24 billion ($67.7 million) in domestic companies in 2022. Express Innovation Agency supports the innovation ecosystem from youth education to accessing international markets. Hungary ranked #21 in innovation in the European Commission’s European Innovation Scoreboard 2022, the best result among emerging innovators in the E.U.
Startup Hungary is an entrepreneur-led organization that supports the startup community and high-growth potential tech companies. Incubator Design Terminal helps innovative Hungarian startups enter the international market, and CEU iLab’s incubator provides founders with mentorship and funding opportunities. In 2022, more than 4,000 students enrolled in Express Innovation Agency’s Hungarian Startup University Program.
Ecosystem by the Numbers
NUMBER OF UNICORNS
(H2 2020 - 2022)
Sub-Sector Strengths
AI, Big Data & Analytics
Bosch is building a new 3,500 square meter R&D complex near ZalaZone, Hungary’s proving ground for cutting-edge mobility solutions. The complex will be home to 200 engineers working on autonomous driving, e-mobility, and AI. The first module of an AI supercomputer, built in partnership between the Ministry of Innovation and Technology and OTP Bank, was inaugurated in January 2022.
Fintech
As of January 2023, there were 106 Fintech startups in Budapest. Approximately 26% of Hungarian Fintech companies work in financial software development and system integration, 19% in payment services, and 17% in data analysis and business intelligence services.
Life Sciences
Hungary is well known for its Life Science sector. Home to approximately 300 Life Sciences startups, 80,000 people work in the sub-sector. Eight of the top 10 global drug and biotech companies have manufacturing facilities in Hungary. Fourteen Hungarian universities graduate more than 5,000 students in Life Sciences-related fields per year. Cell-behavior simulation platform Turbine raised a €20 million Series A in November 2022.
Reasons to Move Your Startup to Budapest
Skilled, Affordable Workforce
The education system in Hungary produces high-quality, workforce-ready graduates. 90% of students speak English and two-thirds of the startup workforce are STEM graduates. This has led many companies in sectors including pharmaceuticals, engineering, R&D, and IT to look to Budapest when searching for talent. In 2022, labor costs were among the lowest in the E.U.
Tax Incentives
Hungary has the lowest corporate income tax level in the EU at 9%. Dividends paid to owners both within Hungary and abroad are not taxed. Local business tax is levied on the gross profit of the company up to 2%, depending on the municipality. There are special taxation schemes for small companies that meet specific criteria.
Strategic Location
On the national scale, Budapest benefits from a unique centralized infrastructure providing exceptional opportunities for those who would like to operate in the country. Moreover, thanks to its geographical location, Hungary and its capital serves as the perfect place to reach out to CEE and Western European countries.
Selected Startup Organizations
Startup Genome Members
MEMBER
Express Innovation Agency
The Express Innovation Agency (Xi Agency) is the innovation agency of the National Research, Development, and Innovation Office. Its mission is to support the innovation ecosystem actively, from youth education to the gateway to international markets. It reaches out to the youngest through new talent programs, innovation promotion, training, and mentoring. The Xi Agency promotes growth through valorization, incubation support, and encourages reaching the next level of innovation via international contacts and offers preparation for accessing European funding. The Agency aims to help the whole ecosystem by creating a supportive environment that, regardless of discipline, serves as an information and support hub, from planting the seeds of innovation to successful market entry. The Agency also operates the Hungarian Startup University Program (HSUP) which is Hungary’s first tertiary education level startup program.
MEMBER
HUNBAN
Hungarian Business Angel Network (HUNBAN) is the official angel investor association of Hungary. Incorporated in April 2017, its aim is to welcome and unite all business angels who are interested in investment opportunities not only on a local, but a regional level as well. The network’s mission is to integrate Hungary into the international circulation of business angels and truly represent both the companies and the investors’ interests. The purpose of the association is to increase the efficiency of the Hungarian business angel market, the quantitative and qualitative development of startup investments, and the development of the startup ecosystem in the region.
MEMBER
NRDIO
The National Research, Development, and Innovation Office (NRDIO) is a central budgetary body operating as a central office under the direction of the Minister responsible for the coordination of science policy. The NRDIO participates in the preparation of the government’s decision on its research, development, and innovation strategy and contributes to its implementation; prepares the decision of the Minister responsible for the coordination of science policy; performs the technical tasks of international and European integration-driven cooperation in the field of research, development, and innovation; contributes to the utilization and coordination of foreign research, development, and innovation support provided to Hungary and monitors and controls funded projects.
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