Building Bohemia - Czechia’s Innovation Boom

Prague the center of the the Czech startup and tech scene

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Building Bohemia – Czechia’s Innovation Boom

Czechia takes off as a prominent tech hub powered by impressive talent and tech-first startups

08 Feb 23

Mary Superlano

At talent.ai we are incredibly privileged to work in some of the world’s most exciting technology hubs. For example, most people will know about the exciting growth that has taken place in Portugal over the past ten years or how Stockholm has evolved into one of the most consistent innovators during the past 5 years.

Although there are numerous growth stories like this around Europe, many have missed the growth path that Czechia has been on. Well, not anymore.

The Czech tech ecosystem is substantially rich in talent, has an incredibly opportune geographical position, and, most importantly, is being driven by local influencers to be a tech leader. We take a closer look at one of the CEE region’s fastest-growing tech hubs, a country that has grown its total value almost 5x times since 2017.

Wealth in Talent

The Czech Republic boasts one of the strongest talent fields in the CEE with a pool of well over 100K in IT workers, software developers, and engineers.

This is the type of environment tech dreams are made of, not to mention the 5.000 new tech graduates it sees every year from universities around the country.

An existing hub of talent that keeps expanding can make the perfect foundation for a booming tech ecosystem. That has happened in the Czech Republic with many choosing to build locally, and create opportunities for their surroundings.

A culture that embraces innovation

One of the most cyber-secure and cashless countries in the world, the Czech Republic embraces tech and in turn, creates the perfect environment for more innovation.

This cultural adaptation makes the startup way of doing business easier. As locals welcome new ideas and are ready to push the envelope on what can be done with technology.

There is a significant ease of business when it comes to building a startup in the country and, more importantly, when it comes to engaging people with new tech and trying out innovative ideas.

Building for the future

Despite 2021 having been a year of global downturn (with more than a few stumbles for all markets), the Czech ecosystem ended with more investment than the previous year. Not to mention great prospects for a soonicorn and the continued trust of investors.

Keep in mind that Czechia holds the second-highest concentration of VC investment in the CEE with $1.1B in funding for its companies. Putting the country in a strong position for continued growth.

VC insight into investing in the Czech startup scene?

We spoke at length with one of the most prominent investors in the Czech scene, Vojta Roček – Partner at Presto Ventures. They have participated in rounds for some of the strongest startups in the country like Woltair, Keboola, and many more.

“At Presto Ventures we are focused on B2B startups. Here, the smart people start with the technology and only then focus on who to sell it to. In other words, they are really good at technology and (can be) bad at sales – and that’s where we come in. I believe you can build an interesting VC business around technical solutions.”
Vojta Roček – Partner at Presto Ventures

Each tech hub has its own nature and with the concentration of talent that you can see in the Czech Republic, it’s no wonder tech and innovation come first. This makes it bountiful ground for investment since you can swoop in to invest in an amazingly sound solution and tech before it’s burst out into the scene.

We look for strong tech talent developing a product for a growing market. Our primary path to exit is to sell the startup to the US or help them break through to the Western markets.”
Vojta Roček – Partner at Presto Ventures

Connected and close

One of the highlights of the Czech tech hub is where it sits on the map, right at the centre of the CEE. In close proximity to markets like Germany and the rest of western Europe, while still connected to the most prominent players in the CEE. This gives Czechia a huge advantage in building tech and expanding its startup markets beyond its borders.

Proximity to important tech markets, while still maintaining the advantages of its location – like lower costs, and talent sourcing – makes the Czech Republic an increasingly interesting tech hub and high-potential ecosystem.

The standout tech hubs in the Czech Republic

As it happens with other countries, there are standout locations within Czechia. Cities that are brimming with talent, opportunity, and startups.

These locations are leading the pack when it comes to tech development: drawing the eye of both local and international attention, having the most concentration of talent, and advanced tech infrastructure.

Prague

Prague is the capital city and by far the most developed tech hub in the country, placing 5 in the CEE and 82 worldwide.

The city can claim over 200 startups, accelerators, development centres, and more. It is also steadily gaining attractiveness among digital nomads and foreign investors.

Its higher population count and the infrastructure development that comes from being a capital city give it a clear advantage in the ecosystem. Prague has all the characteristics of an important tech hub, and since its boom started in 2010, there have been no signs of stopping the city.

Brno

The runner-up but a tech hub on a steady climb. Less flashy but still full of promise, Brno is home to ROI Hunter, Kiwi.com, Madfinger Games, and many more.

Despite its smaller size, Brno has been described as a sort of “Silicon Valley” of the Czech Republic with a high number of smaller to medium-sized startups getting started there.

One of the main reasons behind this impressive tech development is that the city hosts 13 universities, having around 60.000 students altogether, a massive talent source for up-and-coming companies.

Brno is a booming tech ecosystem that also attracts around 70.000 international workers and continues to grow every year.

A population with high skill levels, being the second largest city in the country, and the impressive concentration of tech business are positioning Brno as one of the most interesting tech hubs in Europe.

Drive for innovation

There is one thing you cannot buy or fabricate, and that’s drive. Thankfully, the Czechs have plenty of it. It might be their industrial history starting in automobile manufacturing or just something innate, the bottom line is they are creators.

Around 1.000 startups are created every year in the country with no signs of slowing down. Yes, we know not all of them will be successful but just the number indicates an enviable will for building in tech.

What’s next for the Czech tech ecosystem?

Building and developing in a downturn, at least for the first few months of 2023. Like the rest of the markets, the Czech Republic is bound to the macroeconomic frame, and right now tech is in flux.

However, the Central European markets’ specific situation might give them respite from a broader crisis.

“I don’t see a slowdown in Central Europe (…) Everyone is talking about a crisis but we are not seeing that much of a slowdown in CEE – largely because this region wasn’t so overhyped in the first place.”
Vojta Roček – Partner at Presto Ventures

Gone are the days of inflated tech numbers. In turn, we will most likely see companies build sensibly. Growth will still depend on innovation but it also stands on making smart choices.

However hard the markets may be, this momentary downturn poses an opportunity for investors and tech hubs like the Czech Republic to take chances, invest with precision, and build standouts that will pay out immensely once the markets stabilise.

The future for Czechia is bright and it is being driven by its greatest resource, its people.

Sources