The Emerging European startup scene will flourish in the next decade. We’ve identified this trend a long time ago, and are exceedingly more confident that this will hold true in the coming years, so much so that we’ve rebranded our fund to “Emerging Europe” — or “e2”. We have no doubt that there will be exponentially more Emerging European outliers in the next 10 years. Here’s why.

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Tech Talent

Talent has always been abundant across Eastern Europe, the Baltics & Türkiye. Engineering & development roots are strong across the region with several top tech universities, and many Emerging European countries have historically been home to large-scale development agencies and off-shore development teams of global tech leaders (some here at Sequoia Atlas).

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More importantly, a growing number of new talent have been starting tech companies in recent years. Over the last 5 years, venture financing across Emerging Europe has grown more than 10x, even when the data likely omits diaspora founders with local tech teams. We’ve seen the emergence of multiple unicorns across the region, and this has added the vital element of entrepreneurial know-how on top of the existing technical prowess.

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Global First Mindset

One of the main reasons why Emerging Europe creates outliers is because the region has a distinctive feature (not a bug): Local markets are too small to generate outliers. Aside from a few industries — think e-commerce or fintech — you’re unlikely to build a sizeable business focusing on local demand. Of the total 53 unicorns seen above, more than 40 have minimal sales operations across CEE.

Compare this to Western Europe, where larger markets can seduce founders to build locally, which either creates regional scale-ups that hit a ceiling at best or locally-focused SMEs at worst. In Emerging Europe, you don’t have this luxury; you aim for the global stage right from the start.

And more and more founders in the region have increasingly recognized this, resulting in a growing global-first mentality. Their design partners are not from their local countries but from all around the world. The tech team stays local, but the founders spend a lot of time in — and in most cases move to — the Bay Area. They want to be outliers.

The necessity of being global-first also helps cultivate the right founder mindset. Globally-focused founders face the typical startup hurdles, amplified by the complexities of operating in a new country with limited networks and an unfamiliar culture. They must also manage teams across multiple time zones. Given the financing environment across Emerging Europe, they also might lack ample resources at times, fostering a sense of urgency and resourcefulness. All of these things shape — the right founder — character.

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Road to dozens of new unicorns

Why now? Emerging European ecosystems are still in their infancy, with most just beginning to realize their potential. Apart from Estonia, which is several cycles ahead, much of EE has seen success only in the past 6–7 years.

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The snowball effect of successful founders reinvesting in the ecosystem will accelerate exponentially over the next decade. As experienced founders and operators share their knowledge, — and small ecosystems have the benefit of being tightly knit — the ecosystem will produce increasingly skilled entrepreneurs. While Emerging Europe consists of small cities, startup ecosystems are driven by tight networks built around success stories, not geography.

The region has immense potential — its talent and mindset are already in place; what’s needed now is the experience to build robust networks and proven playbooks. With a growing pool of tech talent, a prevailing global-first mindset, rising success stories, and a thriving startup ecosystem, the region is poised to become the next big thing.

For Emerging Europe to make sure it flourishes in the next decade, more founders must adopt a global-first approach, positioning themselves in top markets like the Bay Area.

Emerging European founders understand this, and the world will increasingly recognize it in the years ahead.

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