Private equity fundraising for Central and Eastern Europe (CEE) hit the highest annual level in a decade in 2018 with EUR1.8 billion, according to new data from Invest Europe.
Buyout funds in CEE raised EUR1.1 billion, while the region’s venture capital funds attracted over EUR500 million for the second year in a row, reveals Invest Europe’s 2018 Central and Eastern Europe Private Equity Statistics report, released today.
Private equity investment into companies across CEE reached EUR2.7 billion in 2018, the second-highest amount ever achieved, following 2017’s record EUR3.5 billion. The number of companies backed increased by 50% year-on-year to almost 400, also the second-highest level on record. This was driven by a sharp increase in CEE companies supported by venture capital.
The number of private equity and venture capital-backed exits in CEE reached an all-time high of 128 companies divested in 2018. This represented a total value of over EUR1 billion for the fifth year running, measured at historical investment cost. Poland accounted for over half of this total exit value with EUR575 million.
“The strong levels of private equity fundraising, investment and exit activity in Central and Eastern Europe in 2018 demonstrate that the region continues to develop as an attractive investment destination,” said Robert Manz, Chair of Invest Europe’s Central and Eastern Europe Task Force. “Global investors see that private equity and venture capital investment is one of the best ways to access the region’s robust markets and high-growth companies.”
All countries in the CEE region covered by Invest Europe’s report surpassed the European Union’s 2.1 per cent GDP growth rate in 2018, according to data from the International Monetary Fund (IMF). Eight of the countries achieved annual growth above 4 per cent, with Poland, Hungary and Latvia experiencing particularly high growth rates, reaching 5.1 per cent, 4.9 per cent and 4.8 per cent respectively.
Poland saw CEE’s highest amount of private equity investment with its companies receiving EUR850 million in total last year. The Czech Republic was close behind with EUR767 million invested into its companies via private equity and venture capital funds. Hungary had the highest number of companies receiving investment with over 190 backed last year, almost half of the regional total.
The biotech and healthcare sector took the highest share of CEE’s private equity investment with 32% of the total value in 2018, while consumer goods and services companies received 27 per cent of funding. The region also has strong technology start-up credentials, including Czech cyber-security group Avast which was 2018’s largest tech initial public offering (IPO) on the London Stock Exchange at a valuation of GBP2.4 billion. Meanwhile, Romania’s robotic process automation firm UiPath achieved a USD7 billion valuation during a funding round earlier this year, making it one of the world’s most valuable artificial intelligence companies.