Private equity and venture capital investment into companies in Central and Eastern Europe (CEE) reached a record €3.5 billion in 2017, according to data from Invest Europe*.
With a 113% year-on-year increase, the amount surpasses the region’s previous peak in 2008 by 40%, according to the industry association’s Central and Eastern Europe Private Equity Statistics 2017 report.
CEE’s consumer goods and services sector attracted the majority of investment capital with three-quarters of the total, while technology (ICT) followed with 11%. Polish companies received 71% of the total amount, followed by those in Romania, Hungary and Latvia respectively.
Examples of recent private equity-backed business successes include:
– Avast Software, the Czech cyber security company which earlier this year listed on the London Stock Exchange in London’s biggest ever tech IPO,
– Dino Polska, a Polish grocery store chain which grew rapidly to nearly 630 stores before its IPO last year on the Warsaw Stock Exchange, and
– UiPath, a Romanian robotic process automation vendor, which was valued at over US$1 billion.
The report also shows strong results across fundraising and exits.
Private equity fundraising in the market increased 46% year-on-year to reach €1.3 billion in 2017, including a record €360m for venture capital fundraising. European investors from outside Central and Eastern Europe provided 38% of the total capital raised, while global sources of capital outside of Europe contributed 26%, driven by US-based investors.
Funds-of-funds were the leading source of capital at 31% of the total, followed by government agencies at 26%.
Company exits in CEE reached a total value of €1.3 billion, measured at historical investment cost, a year-on-year increase of 16% and the region’s third highest annual divestment level.
Secondary buyouts were the most utilized exit route with 38% of the total value, followed by trade sales at 29%.
*Invest Europe is the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors. It is a non-profit organization with 21 employees in Brussels, Belgium.