By MOTIFE Insights, 22 November 2017
This, however, is only a part of the picture. It would be unfair to forget about the smaller players, particularly those that were started here in Kraków.
Check out also: Krakow IT Market Report 2024
Krakow is no longer just a prime offshoring destination where international companies locate their captive centers. These days Krakow is also home to a number of new firms built by young, smart, energetic people.
It would be a platitude to say everything has changed here in the last 10 years. From being a deserted land with only a handful of businesses that could be called start-ups, we now have a growing ecosystem of new ventures that operate internationally; there is access to funding (both private and public), business angels, advisers, etc.
For all of you who want to get a glimpse of where the Krakow start-ups scene is now, here are 5 things you probably didn’t know about Krakow start-ups.
What is the most successful Krakow start-up? Codewise? Nope. Estimote? Nay. It appears it is Brainly. Why? They raised $40M in funding, including $14M just a month ago from Kulczyk Investments. If this doesn’t convince you, here’s another fact: Brainly has 100 million monthly users. That is four times what onet.pl (the most popular Polish web portal) has.
They have some strong competition as a leading start-up though, including BASE and Estimote, to name a few.
For those who are not students anymore, here’s a paragraph about Brainly:
Brainly is the place to learn, for students, by students. The world’s largest social learning network. It enables its users to help each other with school-work problems. Brainly was launched in 2009 in Krakow, Poland. (source: CrunchBase)
ll rankings are subjective. To balance out, let’s look at a couple of them.
First, CrunchBase. Crunchbase sorts firms by their CrunchBase rank. Here are the top 10 Krakow start-ups according to CB. Note, we only looked at the firms that have their HQ in Krakow.
So here is the list:
Here’s another rank. The most active Krakow start-up community OMGKRK has just recently published their subjective take on the top start-ups that originated from Krakow. Here’s the list:
If there are any firms that sound new, here’s a cheat sheet for you, mostly sourced from CrunchBase.
There’s also a good post from Richard Lucas on the leading Polish start-ups that includes some notes on ventures from Krakow.
The total funding received by Krakow start-ups exceeds $150M (source: CrunchBase, companies’ websites).
That’s over half a billion PLN. Is it a lot? Well, it depends. Several years ago TechCrunch made an analysis of how much an average US-based start-up raises before it gets acquired. It’s $41M. Even if we take into account the cost-competitiveness of Poland and assume you’d need just half of that, $20M, then this sum seems low and there are only two firms that pass that threshold: BASE and Brainly.
This can now change, though. There is a huge pool of money allocated for Polish start-ups to be distributed in the next 3 years as part of the #startinpoland program. There is a good report on this subject here. Let’s just not forget, though, that before funding, we first need ideas and the people who are willing to turn them into reality. We also need an execution that will let a company go beyond the seed money and round A.
It almost seems like there are 2 very specific areas where a lot of start-ups go. The first one would be IoT/Bluetooth/Beacons. Firms here include Elmodis, Estimote, Kontakt.IO and Silvair. The other group would focus on sales and marketing tools and services. The list here includes BASE, Benhauer, CallPage, SalesManago and Synerise.
There is also a third group, not really visible in the top chart, but still very active. These are all game studios. According to the “Polish GameDev 2017” study, over 20% of Polish game studios are based in Krakow. But, then, are game studios start-ups?
The majority of the firms are B2B. According to the 2017 Polish start-ups report, 76% of start-ups in Poland are B2B companies.
The #StartInPoland report estimates there are 2700 start-ups in Poland. The challenge is that there is no clear definition of a start-up. One could try to list the criteria or characteristics of a start-up, such as innovation or high risk of failure, but there is enough on that in Google, so let’s skip straight to the numbers. Just remember that the ambiguity of the term and quality of the data make these numbers more a trivia than facts.
What fraction of Polish start-ups is located in Krakow? Angel.co shows 126. Crunchbase shows 154. And the report from OMGKRK talks about at least 100.
There is still a long way ahead, though. The first generation of start-ups will soon grow to be 100+ FTEs and will await first acquisitions. Not having a lot of serial entrepreneurs and sufficient capital from past acquisitions, we are still in the infancy here in the Krakow IT Valley.
There is a lot to be done and it will take another 5–10 years to get to a more mature environment. The trends are promising, though, the community is very active and the funding is there, which tells us that there will be more good news coming from the Krakow start-up world.
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