Andrei Dudoiu, co-founder and managing partner of SeedBlink, expects 2024 to be a much better year for tech startup funding after 2023 was the worst in nearly a decade. The change will be driven by declining inflation and interest rates, the return of venture capital investment, and positive developments in the global stock markets.

Seedblink is a leading venture investment and equity management platform dedicated to technology startups in Europe.

“After the exuberance of 2021 and 2022 that was marked by the war in Ukraine and the energy crisis, monetary policy measures have emerged which have raised the interest rates, causing investors to choose fixed-yield instruments with low or very low risk,” Andrei Dudoiu said in a recent analysis.

He believes that the declining inflation of recent months could be a sign that 2024 will be the year of global adjustment in monetary policy, and investors, local or international capital holders, will no longer have high-interest rates at their disposal, which will restore the appetite for other forms of investment.

The stock markets and private markets are also indicators, but the SeedBlink co-founder also pointed to the fact that some projects did survive 2023 in a highly constrained funding market.

“Many of those that have shown resilience now have better prospects because they have reached a break-even point and have managed to put the business in a healthy operational frame. And now, if funding returns, they will have the fuel to become even more competitive. So, I think projects have also self-filtered during this period, and funders will have to choose from a smaller market, but from more mature and healthier businesses,” he said.

“The United States sets new trends, and it takes about six to nine months to see the pattern in Europe. Romania is very well connected to Europe and the trends appear in the same period, but it also depends on the maturity of the businesses,” Andrei Dudoiu also stated.

For example, he further explained, the more mature ones, coupled to large European or regional funders, feel the changes quickly, while early-stage startups or those that rely on local funders may be at a gap of another two to three months.

“A lot of people expected a general recession in the last two years, and that has not happened. On the other hand, there have been several crises - political, military, and a medical one - and these have generated technical crises or technical recessions, but not generalized ones, and it seems that the macroeconomic indicators in the most important economy, that of the United States, are surprisingly good,” Dudoiu said.

On the other hand, a black swan like the pandemic or armed conflicts can appear at any time, influencing the investor appetite.

The SeedBlink managing partner also said that AI has been a very exciting and confirmed driver in 2023, an extremely bullish vertical even in this regressing funding environment.

“This segment will grow exponentially, but I think it will matter enormously which companies or products keep in mind the ethics around the use of Artificial Intelligence. It will matter the connection to the human area, to what humanity wants to get from AI. Specifically, not to invest in technologies that, as we see so often now, create deep fakes or generate chaos and problems rather than added value. On the other hand, AI will generate huge opportunities for other verticals in technology and beyond, which can become much more efficient thanks to the benefits that AI can add,” he explained.

Tech innovation in the defense industry and space technology also show potential, while as far as blockchain technology is concerned, Dudoiu believes it will have “an interesting evolution, because once it can prove its usefulness in terms of automation and transparency, it will become adopted by the government, by the authorities.”

“I’m not talking about cryptocurrencies, I'm talking about the blockchain technology that can help so many industries from the public sector to financial services,” he noted.

“At the other end of the spectrum, if we look at verticals where investment will stagnate or even decline, we should probably look at companies that offer remote working solutions because already in this segment, there are a few winning players and the rest, if they don’t have a very disruptive solution, either will get swallowed up or disappear. This is an example that is already visible. At the same time, e-signature solutions have become mainstream, and companies that are now setting out to innovate in this segment probably have much less chance than those that have become mature and have captured the market,” Andrei Dudoiu also stated.

Andrei Dudoiu is co-founder and managing partner of SeedBlink, a company founded in 2020 and which has since become one of Europe’s leading investment and equity management platforms dedicated to technology startups. 

2023 was the company’s most active year, with 53 deals closed in 20 different technology areas. For the four years of activity, the platform reported assets of EUR 815 million and mobilized EUR 342 million for investments in over 250 startups in 15 countries.

irina.marica@romania-insider.com

(Photo source: SeedBlink)