Investments in young technology firms, commonly known as start-ups, in the Czech Republic experienced a substantial decline of 75.5%, reaching 11.4 billion crowns in 2023. The average investment in a start-up amounted to around 24 million crowns, marking a decrease of six million compared to the previous year. The number of investment rounds involving hundreds of millions of crowns also decreased. Several factors contributed to this decline, including cost-saving measures by foreign investors, high inflation in the Czech Republic, and the impact of rising interest rates.

Throughout 2023, a total of 98 rapidly growing companies secured financial support. Notably, nine Czech-developed companies were acquired by major foreign players like IBM and Cisco, with transactions amounting to billions of crowns. The total number of invested companies in 2023 was lower compared to the previous year, which witnessed 112 investments and seven company sales, often at higher amounts.

Iva Brejlová, an analyst who examines start-up data on the CzechCrunch platform, highlighted the challenges faced by technology companies in 2023. Issues included the impact of savings in the global start-up ecosystem, challenges arising from the collapse of the American Silicon Valley Bank, a crucial bank for start-ups, and the adverse effects of high inflation and rising interest rates in the Czech Republic.

According to Peter Brejčák, an analyst at Czech Crunch, the Czech Republic managed to resist the negative sentiments from abroad for a certain period. Companies implemented cost-saving measures, delayed plans for expansion abroad, and some start-ups sold shares at lower prices than in previous years. However, there were no major layoffs, unlike in the United States.

Previous CzechCrunch surveys among investors revealed that the valuation of young companies dropped by a quarter, and sometimes even by 40%. “Exits,” referring to the sales of entire companies, saw increased activity. Notable transactions included the sale of Manta, a company providing data visualization solutions, to IBM for over three billion crowns, and Cisco’s acquisition of Smartlook, a start-up focusing on understanding user behavior on the internet, for a price exceeding two billion crowns. Shoptet and UltimateSuite were also sold for over half a billion crowns.

Article by Prague Forum