Central and Eastern Europe doesn’t always make headlines when it comes to artificial intelligence. But that’s starting to change — and fast. Between 2023 and mid-2024, startups in the region raised more than €1.4 billion in AI funding, marking a new era for CEE as a serious contender in the global tech race.
Our latest insights, drawn from The State of AI in the CEE 2024 report by The Recursive and complementary research, paint a clear picture: CEE is no longer just promising — it’s performing.
This article breaks down the key trends shaping this momentum, explores why international investors are moving in, and looks at where the region might be headed.
The Investment Landscape: A Region Gaining Serious Traction
Behind the headlines and big funding rounds is a clear trend: CEE’s AI ecosystem is gaining real momentum — and it’s happening at speed.
What stands out isn’t just the total capital raised, but how that funding is being distributed across countries and companies. Poland has emerged as the regional front-runner, with startups raising €171 million in the first eight months of 2024 alone. Croatia and Greece are also drawing attention, with companies like Verne and Causaly landing major rounds that have helped push the region into the global spotlight.
A standout example is ElevenLabs in Poland, which closed a €74 million Series B — one of the most notable AI deals in the region to date. These scale-up investments signal that CEE isn’t just generating early-stage buzz anymore. It’s producing companies that are capable of competing and growing on a global level.
What’s especially compelling is the resilience behind these numbers. While many global markets have seen a slowdown in tech investment due to economic uncertainty, CEE has stayed on track. Founders in the region are proving they can navigate tougher conditions, build capital-efficient businesses, and continue attracting attention from international funds.
In short, the data points to a maturing ecosystem — one that’s proving it has both staying power and real upside.
The Competitive Edge: What Sets CEE Apart from Western Europe
For years, Central and Eastern Europe has been recognized for its deep bench of technical talent. But more recently, it’s become clear that the region offers more than just skilled engineers — it presents a strategic advantage for investors seeking high-growth AI opportunities at significantly lower costs.
Compared to their Western European counterparts, CEE startups are proving they can hit similar revenue milestones with up to 40% less capital. That efficiency doesn’t just make them leaner — it also makes them more resilient in volatile markets. On top of that, Series A valuations in the region remain 30–40% lower, creating far more favorable entry points for investors.
It’s not just about lower costs anymore. What’s happening in countries like Poland and Hungary shows a broader shift — governments are putting real effort into digital education and AI-related skills. That’s helping create a pipeline of people ready to build, scale, and lead in tech.
For investors, this kind of steady groundwork matters. It’s not a short-term play — it’s a sign that the region is serious about innovation and building something that lasts.
So yes, operating in CEE might be more affordable than in Western Europe. But more importantly, it’s becoming a place where talent, efficiency, and long-term vision come together in a way that’s hard to ignore.
How Regulation Supports Growth
Another reason why investors are feeling more confident about backing AI in CEE? The regulatory environment is finally catching up with the pace of innovation — and in a good way.
The introduction of the EU AI Act in mid-2024 marked a turning point. For startups operating in the region, the new legislation brought something that’s often missing in fast-moving tech sectors: clarity. Instead of vague guidelines or shifting targets, there’s now a clear framework that helps companies understand how to build AI responsibly — and helps investors manage risk.
This matters more than it might seem at first. Compliance is no longer just a box to check; it’s becoming a competitive factor. For international investors, especially those managing institutional capital, knowing that a startup is aligned with European governance standards adds a layer of confidence.
What’s especially important in the CEE context is that many startups here proactively engage with these rules, not scrambling to comply later. That signals maturity — and positions the region as a place where innovation and accountability go hand in hand.
Industry Deep Dive: The Sectors Leading CEE’s AI Charge
One of the reasons AI investment in CEE is so resilient isn’t just the talent or the costs — it’s the practical, targeted way startups here are applying the technology. Rather than building generic platforms, many of the most successful companies are focused on vertical AI — solving very specific problems in very specific industries.
Healthcare and biotech are at the top of the list. Greece-based Causaly, for example, raised €55 million to accelerate drug discovery and life sciences research using AI-powered analytics. This space is seeing steady interest, with funding spread across around 40 early-stage companies in the region — a sign of growth and diversification.
The fintech and digital banking sectors are also drawing significant attention. Romanian company FintechOS secured a €55 million round, showing that CEE is becoming a serious player in financial services innovation. Investors are increasingly looking to the region not just for software development, but for next-generation infrastructure in regulated industries.
AI is also transforming industrial automation. Croatian robotics startup Gideon is a standout here — and with backing from major players like Toyota, it’s helping drive the shift toward smarter, more efficient production in logistics and manufacturing.
Then there’s cybersecurity, where the stakes have never been higher. Hungarian startup SEON raised €87 million for its AI-driven fraud prevention tools, tapping into a global need for more advanced digital defenses as online threats grow in scale and complexity.
Across these sectors, one trend stands out: AI in CEE isn’t abstract — it’s built to be used. Companies like Creatopy (over €120 million raised in 2024), Colossyan, and ElevenLabs are also proving that AI-powered media tools from the region can compete globally, especially in areas like video production and voice synthesis.
This focus on highly specific, real-world use cases is giving CEE startups a strategic edge. They're not just building for innovation’s sake — they’re building to solve.
What the Next Five Years Could Bring
If the past year has proven anything, AI momentum in Central and Eastern Europe isn’t a one-off. The outlook for 2026 to 2030 points to continued growth, not just in volume of funding, but in the types of companies and deals shaping the region.
One of the most visible shifts is the move toward late-stage investment. Where CEE was once mainly known for attracting early-stage capital, more startups are now progressing into growth phases — and securing larger rounds to match. Institutional investors are stepping in, and the deal sizes are starting to reflect that maturity.
This sets the stage for something else: a new wave of AI unicorns. With growing activity in sectors like fintech, healthcare, and cybersecurity, several startups are already on track to hit billion-euro valuations. As the adoption of AI accelerates across industries, the conditions are right for breakout success stories from the region.
We’re also seeing signs of increasing cross-border interest. Global players are looking to acquire or partner with high-performing CEE startups, and that momentum is expected to grow. For founders, that means more opportunities for strategic exits. For investors, it’s a sign that the rest of the world is starting to take CEE very seriously.
The infrastructure, talent, and product innovation are already in place — and over the next five years, the region is well-positioned to turn that foundation into long-term leadership.
What’s Missing — and Why the Time to Act Is Now
Central and Eastern Europe has made a clear case as a serious AI investment destination. The fundamentals are there: a strong pool of technical talent, capital-efficient startups, smart regulation, and increasing specialization in high-impact sectors. And while funding momentum is picking up, there’s still room for growth — and for investors to get in early, before valuations fully catch up to the region’s potential.
Of course, some challenges remain. Talent pipelines will need continued support, and exit options across certain markets are still developing. But those are gaps that tend to close quickly when ecosystems hit their stride — and CEE is already well on its way.
For investors with a long-term view, the region offers more than just opportunity — it brings leverage. The ability to back serious innovation, in a market that’s still relatively undervalued, is becoming harder to find. CEE may not be a secret anymore, but it’s still early enough to matter.