Budapest’s Tech Ecosystem By the Numbers
Hungary
Budapest
MEMBERS:
HIA (Hungarian Innovation Agency, NIÜ in Hungarian)
"The Hungarian Innovation Agency works closely with key players in the startup ecosystem to break down the regulatory obstacles faced by startups and investors, ensure early-stage financing, and increase the international visibility of the ecosystem."
Highlights
Sustainable growth with high employment is predicted for Budapest. Hungary's vibrant capital is projected to outpace average EU growth with a 2.4% GDP increase in 2024 and 2.8% in 2025. Following its record $94 million Series B funding, SEON remains Budapest’s most funded tech startup. Founded in 2017, SEON is a leader in fraud prevention, offering scalable solutions to help online businesses combat fraud.
The Hungarian Innovation Agency (HIA), formerly Express Innovation Agency, is a subsidiary of the National Research, Development, and Innovation (NRDI) Office, a central budgetary body responsible for funding RDI. HIA aids businesses in development and global market entry, encourages technology transfer and the supply of innovative entrepreneurs and researchers, and promotes a culture of innovation. The 2023 edition of the Startup Factory program launched by the NRDI Office offered a budget of $15.9 million for technology incubators. The 12 selected incubators can receive $700,000-$2.5 million for co-investment into startups, combined with a 24-36 month incubation program. Approximately 80 early-stage startups have secured further funding through the program. The 24th annual Investment Conference by the Hungarian Venture Capital and Private Equity Association convened top players in the Central and Eastern European VC/PE sector in September 2023 to discuss market trends, including non-conventional venture debt and startup growth.
Standout 2023 deals include Biotech firm Turbine's cell simulation technology for cancer R&D securing a $6 million Series A. VRG Therapeutics received a $5.5 million Series A in August 2023. Corporate AI-chatbot provider Talk-A-Bot raised a $3.8 million Series B in January 2024.
Ecosystem by the Numbers
NUMBER OF UNICORNS
(H2 2021 - 2023)
Sub-Sector Strengths
AI, Big Data & Analytics
Budapest has risen as a key player in global AI-powered autonomous driving, marked by the achievements of domestic startups such as aiMotive and Commsignia has raised $75 million in total funding. Commsignia, now headquartered in California, specializes in Vehicle-to-Everything (V2X) technology and raised a $15 million Series B funding round. The HUN-REN Wigner Research Centre for Physics is advancing a quantum microscope and creating AI software to boost quantum computing efficiency, aiming for significant advancements in quantum technology by 2026.
Fintech
There are 175 active Fintech companies operating in the country, employing nearly 9,000 people. In October 2023, Hungary and the Industrial and Commercial Bank of China signed a cooperation agreement to bolster financial and trade relations, with a focus on advancing FinTech and AI sectors. Budapest-based Fintech firm Peak and the Philippines' RCBC bank are partnering to create a digital remittance solution for Filipino workers in Hungary, enhancing cross-border financial transactions and services.
Life Sciences
Hungary's role in global healthcare innovation was showcased with biochemist Katalin Kariko (graduate of University of Szeged) jointly winning the 2023 Nobel Prize for Medicine for groundbreaking mRNA discoveries that revolutionized COVID-19 vaccine development. The 6th Global Summit on Microbiome was held in November 2023 in Budapest, themed on "Technologies of Beneficial Microbes for Human and Animal Health." Budapest’s most significant investments in 2023 took place in the Life Sciences sector with Turbine and VRG Therapeutics leading the funding rounds.
Reasons to Move Your Startup to Budapest
Growing Workforce
Alongside Budapest’s vibrant digital nomad community, the city's potential is further amplified by Hungary's labor market dynamics. With over 4.7 million people employed and an additional 500,000 workers needed nation-wide, Hungary is broadening its recruitment scope to include more non-EU countries, adjusting immigration policies to meet this demand and fuel economic growth.
Tax Incentives
Hungary’s corporate tax incentives include a foreign tax credit of up to 90% of income tax paid abroad, tax holidays for SMEs, a tax credit on R&D activities, and a 13-year development tax incentive program. Investments in energy efficiency benefit from a tax credit of up to 45% of eligible costs. Simplified ESOP tax rules for startups ease application and new regulations were introduced for convertible notes.
Strategic Location
Budapest's centralized infrastructure and strategic location make Hungary an ideal base for business operations, offering easy access to CEE and Western Europe. Additionally, company formation in Hungary provides EU market access and visa-free mobility within the Schengen region.
Selected Startup Organizations
Startup Genome Members
Key Ecosystem Players
Hungarian Business Angel Network
Startup Forum
Sponsored by the Hungarian Innovation Agency, Startup Forum comprises the most influential organizations, outstanding thought-leader individuals, and HIA representatives of the ecosystem. It deals with regulatory/taxation and educational issues and plans activities to enhance the Hungarian Startup Ecosystem.
Hungarian Venture Capital Association
News from the Ecosystem
10 super promising startups from Hungary to keep an eye on in 2023 and beyond!
The rise of Hungarian startups: How Budapest is becoming a hub for tech innovation
Cooperation among all stakeholders would help the country create a start-up culture that could generate some 30,000 high-value-adding jobs and up to €1.3 billion in additional direct local spending.
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