A sneak-peek into the startup ecosystem in Budapest, Hungary
Mosaik.SPACE is a purpose driven startup community and coworking space in Budapest, Hungary. Being in the heart of Europe, Budapest is considered to be a great location for new business ideas to thrive. In fact, Budapest has a budding startup ecosystem, a vibrant downtown scene and an affordable lifestyle. Needless to say, the city attracts tech talent from all around and Mosaik.SPACE is fast becoming a leading force in Budapest’s tech-ecosystem by building a supportive environment for startups and empowering them to flourish. The community offers a platform for like-minded people in tech, where they can meet, hang out, work, learn and grow together.
In this interview, we speak with Robert Hegedüs, Founder & Advisor, Mosaik.SPACE, to know more about the startup ecosystem in Budapest and how Mosaik.SPACE is creating value for the startups in that region.
TELL US ABOUT MOSAIK.SPACE. WHAT INSPIRED YOU TO START IT?
We have been active in the regional and European startup scene with our pre-seed fund, Fiedler Capital, for quite a while and have spent a lot of time traveling around different tech ecosystems. We love our Budapest and have always felt that the city has an enormous potential to develop a strong tech startup scene. Yet, we found that it somehow underperformed, especially when it comes to early stage startups. We felt that we needed to actively contribute and try to create a central spot, where we bring together the different stakeholders and actively facilitate the exchange of experience and know-how. We also wanted to open a window to other ecosystems in Europe and bring Budapest closer to the international startup scene. That led us to building Mosaik.
How often do you host or support startup events in Budapest?
We opened Mosaik in May 2016. Since then, we have hosted more than 250 startup events, bringing the startup ecosystem activities to an entirely new level in Budapest. We host a wide range of events such as recurring meetups in specific domains, regular tech drink-ups, educational workshops, as well as 1-2 day mini-conferences.
Tell us about the startup community in Hungary. What are the latest trends that you see?
Hungary, especially Budapest, has a very strong base of highly qualified software engineers. Thanks to this phenomena, there were a few companies that managed to grow and become internationally successful very early on, even before the real startup craze had started. While all of those companies are very successful, mature tech businesses, but they operate somewhat isolated from the startups and mostly focus their community activities on employer branding.
On the other hand, there is an ever more active scene of early stage startup enthusiasts and entrepreneurs in this region. Many of these young entrepreneurs are trying to break out and are building products for the international markets, but they face numerous challenges due to an immature ecosystem. Currently, you’re still pretty much left to your own to figure out how to build, launch and market a world-class product. This is very tough if you have no previous experience or the necessary network. As a result, we see very few companies that actually make it beyond a certain point.
We believe this will change over the next few years and we’ll see a new breed of companies coming to the market. Budapest has the potential to have 3-4 teams in top-notch global accelerator programs every year (YC, Techstars, 500Startups, SeedCamp) and there should be at least 3-5 Series A deals led by top international VCs. We hope to make an impact with Mosaik and contribute actively towards these goals.
It’s interesting that you have a program for people who wish to switch their careers. How does that work?
Education is the second leg of Mosaik’s strategy. We founded Mosaik Academy as an education platform providing market-ready talent and training programs for individuals looking to develop themselves and for corporates who support their employee-development. We mostly focus on areas in design & tech that require a multidisciplinary approach and skill-set (so-called hybrid jobs), and where traditional educational institutions usually fail. We work with top-notch experts and instructors and apply a project-based, mentorship-driven approach. We also experiment with different formats and try to break away from the traditional classroom education. So far, we have been offering short courses and are now working on releasing our first full-time courses.
How easy is it for an international startup to set shop in Hungary?
Budapest is a very international city and anyone who can speak English can get along just fine. The bureaucracy of setting up a company etc. could be a bit tricky, but there are a couple of companies who have successfully done that in the recent past (e.g. Transferwise). The main benefit of setting shop here is the access to well-qualified technical talent pool at good value compared to other mature ecosystems. However, finding talent is an increasingly difficult task even here according to what we get to hear from our community and companies in the market.
What is the investor sentiment like? Is it easy or hard to get access to venture capital in Hungary?
In terms of volume, there is sufficient capital. There are two main issues with VCs in Hungary and these are not likely to change over the short-term.
Firstly, 95% of the VC funding is state backed and due to poor reputation of past state backed investors, I believe that many entrepreneurs are wary of taking such capital. So, they choose to bootstrap instead or simply give up. This leads to an adverse selection.
Secondly, the sophistication of the capital is quite low. Very few of the investors (both VCs and Angels) have the knowledge and the international network that is required to effectively help early stage companies. I believe the most successful startups emerging over the next few years will be the ones who bypass the local VCs and manage to bootstrap themselves to a stage where they are able to attract VC money from abroad.
Why did you choose a .SPACE domain name for Mosaik?
Part of our business model is running a co-working space and this domain sounded really cool 🙂