According to a new report by Reuters From July 31, a Slovakian blockchain startup will serve as a prime example the development of risk capital in Central and Eastern Europe (ECO) in connection with the pandemic.
In the old Eastern bloc, where Risk funding reached nearly $ 1.6 billion in 2019the uncertainty during the COVID 19 crisis hit startups hard, especially with regard to operations in the early stages.
Alftins, a Slovak startup that develops an online platform for trading digital assets, recently received funding from the publicly funded venture capital company Crowdberry. The latter had missed a version of the agreement last fall, but is said to this time he was able to achieve better conditions.
The founder of Alftins, Richard FetykoReuters said that Securing crowdberry funding was “the path of least resistance”. At a time when publicly funded venture capital appears to be intervening to help the industry resist the consequences of the pandemic.
Michal Nespor, a partner at Crowdberry, stated that “A number of startups will have no choice but to use these funds as private money will be very careful about the pandemic.”
Market participants are waiting for what can happen
A large percentage of the money that publicly supported venture capital funds like Crowdberry support in the Central and Eastern European region, comes from the European Investment Fund. Your mandate manager, Michal Kosinasaid:
“In times of crisis, limited partners can reduce their appetite for this asset class and, in some cases, even default or try to renegotiate their existing obligations. In this sense, public capital in the region is good for new companies, since the money stays there with public sources. “
The report notes that before the pandemic Private funds and the promise of connections to Silicon Valley were a more attractive path for ECO startups. But publicly funded alternatives like the Czech company Nation 1 confirm that You can now offer “protection and benefit”as the general partner says Martin Bodocky.
“We don’t expect a venture capital firm to die here.”Bodocky said.
The report also points out the role they play PFR Ventures supported by the Polish state and Hungarian state investor Hiventures.
The latter was already the most active first-time investor in European companies last year increased funding for new businesses during the pandemic, according to EO Bence Katona.
Katona said that market participants are currently not at risk and said: “I see that they hope to see what will happen in the next three months,” He also noted that Hiventures “made more investments during this time. It was a very busy time for us.”
In a recent statement for Cointelegraph, the CEO of Celsius network, Alex Mashinsky, examined the current landscape of venture capital investors. He explained that pioneering financing models in the cryptocurrency industry, particularly “community-driven” token offerings, can offer emerging projects unique advantages over their venture capital predecessors.