Hungary Leads CEE in AI Uptake, but Region Trails Global Leaders (November ’26 in CEE)

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Week 45

How Do You Make a European Microsoft

Czech venture capitalists, along with a large team of prominent European business minds, have launched an €80 million fund in Prague called United Founders. The fund, started by Vít Horký and Jakub Havrlant, is backed by a community of over 100 founders from across Europe, including Richard Valtr from Czech unicorn Mews, David Pavlik from another unicorn Rohlik, Laurent Philonenko (ex-Cisco, Asana), deep tech investor Bettina Scheibe, and many more. While €80 million is still a sizable sum in the context of Central and Eastern Europe, the ambition behind United Founders is even bigger: to eventually build Europe’s first trillion-dollar company. It’s an audacious goal, which we will have to see if Global Founders fulfill. But the fund is positioned to offer “smart money” and deep value to European startups. Among its first investments are Wonderful.ai, an Israeli startup developing AI agents for businesses, and EveryHealth, a German startup that builds a digital clinic to serve the needs of LGBT+ people.

Vienna Stock Exchange Launches ETFs Focused on AI, Defense in CEE

The Vienna Stock Exchange is expanding its index offering with three new thematic indices, focusing on Central and Eastern Europe, according to ETF Express. The stock exchange proved our newsletter right for including Austria in our regional scope, by bringing a lot of Austrian companies into the ETFs, too. For instance, the CECE Defence index includes 14 companies from the region. These range from Polish aluminium specialist Grupa Kęty to AMAG Austria Metall, the Austrian information systems provider Frequentis, Czech drone manufacturer Primoco UAV, and Czech weapons and ammunition maker Colt CZ. The CECE AI index takes a slightly creative approach to its theme; rather than featuring the most innovative AI companies, it leans heavily on infrastructure. Among its 18 stocks are telecom giants like Orange Poland, as well as Hungarian, Croatian, and Austrian Telekom. Energy firms such as Transelectrica from Romania and the Czech utility ČEZ are in the mix as well.

How The 28th Regime Could Bring More Money For CEE Tech

European VCs and startups are pushing for the EU to adopt the 28th regime, also known as EU Inc. The idea is to streamline the bureaucratic burden of starting and scaling companies across multiple member states. By establishing a single company with EU-wide recognition, startups could sidestep the complexities of national legal systems. The 28th regime could be particularly transformative for CEE startups. According to Damian Boeselager, German Member of the European Parliament and founder of the Volt Europa movement, one of the biggest barriers to cross-border investment in Europe is the chaotic patchwork of legal frameworks. The 28th should eliminate that barrier. “I know Italian investors, for example, are not investing enough in Romania, and that’s a setback,” Boeselager told How We Cee It during a session hosted by the European Startup Embassy. “It comes from purely legal and cultural reasons, which we need to overcome.”

Week 46

From Brain-Computer Interfaces to Lego Brick Sorting, Here Are the Most Promising AI Startups in CEE

AI startups in health and pharma, as well as defense, security, and space, form the most valuable innovation sector in Europe, according to analysts from Dealroom, Dealflow, and EU-Startups. Their report forms a collection of the most promising startups across the verticals.

The Nordics and Western Europe dominate the health and pharma vertical, but Lithuanian startup Ligence (AI cardiac diagnostics) made it into the top five in the category.

No CEE startups made it into the defense, security, and space vertical—but they did break into other sectors.

Estonian startup AdCash (Digital advertising tech) is among the most promising in the cultural and creative industries.

In the agri-food vertical, Slovenian startup TrapView (Pest monitoring automation) is gaining recognition.

Hungarian company MindRove (Brain-computer and muscle activity interfaces) ranks among the most successful startups in manufacturing, engineering, and construction.

Estonian Gridraven (Precise wind prediction) and Romanian Recycllux (AI plastic recycling tech) made the energy shortlist, while Czech startup Sort A Brick (Sorts random Lego bricks assortments into buildable sets again) found its way into the environmental startup picks.

Polish Nomagic (Robots for warehouses) and Croatian Gideon (Autonomous mobile robots) are among the most promising startups in robotics.

In mobility, transport, and automotive, Asura (Smart vehicle software) and Verne (Battery electric boats) stand out among the best.

In the electronic communications vertical, Greek company Incelligent (Telecom network optimization), Polish Talkie.ai (Voice AI assistants for medical practices), and Bulgarian MYX AD (Digital twins with telco focus) have been selected.

Bulgarian President Blocks Law Enabling State Control of Russian-Owned Refinery Amid U.S. Sanctions

The Bulgarian President Rumen Radev on Wednesday refused to promulgate a legislative amendment that would have empowered the government to appoint an administrator to manage and sell the assets of the Lukoil Neftochim Burgas refinery, owned by the Russian group Lukoil, which is subject to new US sanctions.

President Radev is a retired general labeled pro-Russian by his opponents. He refused to sign the law even though this measure is necessary to guarantee the operation of Bulgaria’s only refinery.

At the same time, Bulgaria is exploring requesting an exemption to new U.S. sanctions against Russia’s largest private oil company, similar to the one Donald Trump granted to Hungary, after

Latvian Bitcoin Miner Turns Waste Heat Into City Heating for 2,000 Homes

The Latvian-based company Power Mining has created a data center that converts the heat generated during bitcoin mining into city heating energy, Labs of Latvia reports. This technology allows it to recover up to 95% of the heat generated by servers and channel it into the city’s heating network, providing heating for approximately 2,000 households. Heat generated by traditional data centers is usually not used further and simply disappears into the environment.

Week 47

Top Czech Arms Producer With Scatchy Ties Aims For IPO

One of the world’s largest arms manufacturers, the Czechoslovak Group (CSG), owned by Michal Strnad, is experiencing a golden age. Its factories—along with much of Europe’s defense industry—have been running at full capacity ever since Russia launched its fanatical invasion of Ukraine nearly four years ago.

The Strnad family maintains close ties with Slovak Defence Minister Robert Kaliňák, a NATO-friendly minister serving in a pro-Russian government. Kaliňák is widely known for overseeing large-scale, opaque military procurement tenders, and has been embroiled in bizarre scandals—including assisting the Vietnamese government in kidnapping a Vietnamese citizen from Europe using a Slovak government jet.

Buoyed by this strong performance, the company is moving swiftly toward an initial public offering. According to the Italian outlet Milano Finanza, the IPO is expected to launch between February and March of next year, and will be led by three global financial heavyweights: Italy’s UniCredit and U.S. investment banks J.P. Morgan and Jefferies.

CSG will most likely list in Amsterdam, although a dual listing is also under consideration, which would allow shares to be traded on the Prague Stock Exchange as well.

The CSG Group focuses on the production of products, systems, and technologies for defense, aerospace, automotive, and other industries. It operates manufacturing facilities in the Czech Republic, Slovakia, Spain, Italy, India, the United Kingdom, and the United States. Among its key subsidiaries are Czech vehicle manufacturer Tatra Trucks; Slovak artillery munitions producer MSM Group; U.S. small-caliber ammunition maker The Kinetic Group; and Czech radar manufacturer Eldis.

How an Innovation Grant Scheme Launched a Political Crisis in Slovakia

The office of Slovakia’s deputy prime minister has launched a €200 million programme that, on paper, appears to be a welcome contribution to the country’s capital-starved innovation ecosystem.

That is, until anyone from the business sector takes a closer look.

Echoing some of the worst clientelist scandals of the past, many of the companies awarded grants have close ties to the President or governing politicians. Several managed to secure millions of euros without even meeting the programme’s official criteria.

It didn’t take long for the story to explode into a national scandal, culminating in Prime Minister Robert Fico (Smer-SD) dismissing Deputy Prime Minister Peter Kmec, a member of the coalition party Hlas.

The fallout has triggered a fresh crisis within the ruling coalition, as Hlas leader Peter Pellegrini is now demanding similar accountability for Smer ministers—specifically, Transport Minister Jozef Ráž, following a series of train collisions, and Minister for Investments and Informatization Samuel Migaľ, over a suspicious IT tender worth tens of millions of euros.

Nightmare Scenario for Bulgarian Lukoil Assets Emerges

Delyan Peevski, the former head of Bulgaria’s secret services, is now positioning himself to take control of the country’s largest company—Lukoil Neftochim—amid the fallout from U.S. sanctions on Russian oil firms, Kapital reports.

Peevski rose to national prominence in 2013, when his appointment as head of the State National Security Agency sparked mass protests that lasted more than a year. As Balkan Insight notes, his name has since become synonymous with the shadowy side of political power in Bulgaria.

Despite ongoing protests and international sanctions imposed in 2021 and 2023, his political influence has only grown.

Now, despite alleged ties to corruption, malpractice, and disinformation, Peevski is trying to recast himself as a pro-EU reformer and opponent of Bulgaria’s pro-Russian president, Rumen Radev.

Week 48

CEE Rewires Its Startup Scene Around Defense and Dual Use

Poland and the Baltics now regularly spend over 3 percent of their GDP on defense — more than any other European country. But the defense, dual-use, and space VC deals across NATO’s eastern flank are mostly centred in Finland, not CEE, a new report from Dealroom shows.

The report focuses on ten countries that could one day become front-line states if Russia moves to attack NATO — although some of the states included are not border states, i.e., the Czech Republic. The report nicknames these countries the “Tough Ten,” and labels the defense, space, and dual-use industries it studies a “tough-tech” sector.

Although the branding in this report is a bit tongue-in-cheek, the reality it reflects is far less amusing.

The possibility of an attack is increasingly starting to feel like an approaching reality, as terrible as that sounds. Four high-ranking European military and security officials have now spoken out about the high probability of a Russian incursion into NATO within the next year or two.

Even the less ambitious CEE countries, like Slovakia, spend at least 2 percent of GDP on defense.

Venture capital across the Tough Ten has moved from a niche frontier to a fast-scaling asset class. For much of 2016–2019, annual investment remained limited, rarely rising above $100M and averaging around $70M. The pattern changes decisively from 2020 onwards: funding moves into the $190–$420M range, with the first mega-rounds appearing in 2022 and a projected $696M in 2025 — more than 10× 2016 levels.

The Tough Ten nations are clearly outpacing the rest of Europe in mission-critical innovation. Between 2019–2022, tough-tech ventures accounted for 7% of all startups in these countries, compared to 5% across the rest of Europe. By 2023–2025, this share more than doubled to 16%, while the rest of Europe stalls at 10%.

In the Tough Ten, venture portfolios are being rewired. By 2025, around 60% of all deep-tech investment — and 26% of total VC — in these markets is expected to flow into tough-tech companies. Nowhere else in Europe do defense, space, advanced manufacturing, and dual-use infrastructure absorb such a share of risk capital.

At a closer look, it is clear that Finland has pulled in more than half of VC investments into tough tech among the eastern flank in the past years.

Rio Tinto Freezes Serbia Lithium Project Amid Mounting Opposition

Rio Tinto has paused plans to build a multibillion-dollar lithium mine in western Serbia amid significant opposition, ABC reports.

The American TV network obtained an internal memo from the multinational company stating that the project will move to a “care and maintenance” phase — meaning Rio Tinto will retain and maintain the land it owns but halt all work toward turning it into a mine.

The company says securing a mining permit in Serbia has proven too difficult. That may be the Serbian government’s response to strong community opposition, with tens of thousands of Serbians protesting in recent years over fears that the mine would cause environmental and agricultural damage.