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IT&C

Market size

Technology is considered a primary growth driver for Romania. The IT&C services sector is forecasted to reach EUR 6.3bn. by 2020.

Global software companies such as Oracle, Amazon, IBM or Deutsche Bank already leverage the development potential of Romanian software developers at a fraction of the cost compared to Western Europe, while maintaining the product quality. They have also contributed to the initial development of the tech start-up environment that is developing today.

Today, Romania is one of the leading countries in the region not only for IT&C development, but also for SSC & BPO. Over the last 2 years, names like London Stock Exchange Group, Viavi, Huawei, Capgemini, Samsung, Amazon, Accenture have opened Centers in Romania, either for R&D, Business Services, Logistic or others.

PDF Romania’s Business Service Sector
Market volume (bn EUR)

Human Capital

With a BSS talent pool of over 64,000 university graduates and a long-term potential of 300,000 employees, Romania stands as one of the leading destinations in CEE for BPO, ITO, R&D or SSC, ranking #17 out of 80 countries by “High proficiency” within EF English Proficiency Index – the world’s largest ranking of countries by English skills.

Employees activating in the IT&C and R&D sector benefit from exemption of the income tax.

IT sector - employees and productivity Source: ANIS, Report 2017

Romanian software developer map (no. of graduates/ year)

Source: Brainspotting

Main cities

54% of the total start-ups set up in 2016 are concentrated in 4 main cities of Romania: Bucharest, Cluj-Napoca, Iasi, and Timisoara – Cluj IT Market Report 2017 by ARIES Transilvania.

Bucharest is the largest start-up hub in the country with over 200 start-up companies and over $ 2 mill total funding over the last 12 months.

Cluj-Napoca recorded a 281% growth in IT start-up volume during 2011-2016. In other words, the number of IT start-ups in Cluj-Napoca has almost tripled!

Romanian software developer map (no. of graduates/ year)

Source: Brainspotting

FDI and Financing

FDI stock and flow in IT&C (EUR mil) Source: National Bank of Romania
2000
Mostly specialized developers,
rare mix of technologies
1700
Largest pool of full stack developers;
Java, C#, .NET, PHP, Web
1100
Java, .NET, C/C++
(embedded developers)
1100
Large pool of front-end and web developers,
telecom engineers
500
Pool for C++ and
helpdesk engineers
500
Pool for cloud and
virtualization experts
230
Automotive software and
gaming engineers pool
Cluj Timisoara Craiova Bucharest Brasov Iasi Sibiu

Bucharest

is the largest start-up hub in the country with over 132 starups and the home of many tech companies and VC firms as well as universities focused on technology, engineering and software development.

Cluj (35), Timisoara (16) and Iasi (7) are catching up, attracting companies like Amazon and investors from the UK, Germany and the US.

Venture capital

Romania has a market that is difficult to ignore. It is the seventh most populated country from the EU with 19.760m people that is 3.9% of the total population of the EU. It has 426.000 active businesses that employ 2.71m professionals. IT firms account for more than 6% of Romania’s GDP. There are 125.000 engineers working in outsourcing, 11m internet users, 7.93m smartphone users plus 2nd in EU for average peak connection speeds according to Akamai.

The Romanian market needs to strengthen its European position in terms of venture capital percentage within the Gross Domestic Product (GDP), since currently its poor performance doesn’t reflect the appreciation of local companies on the international business arena (0.001% Romania vs 0.039% EU average).

Yet, financing through VC in Romania witnessed a massive increase triggered mainly by the growing number of start-ups and tech companies.

In this respect, it’s worth mentioning a few of the local success stories that have set foot for others to follow:

The Romanian Vector Watch software platform and team joined the Fitbit family in January 2017.

UiPath, a Romanian robotic form-scanning software company has raised $ 153 million in funding from the US venture capital firm Accel Partners, alongside CapitalG, KPCB, Earlybird, Credo Ventures and Seedcamp, following last year’s 30 mill capital influx from Accel Partners

European VC investment totals amount 2012-2016 Souce: Invest Europe

Tech events and accelerators

Are an important element in attracting VC funding. These help the start-up community not only with funding but with mentoring and guidance.

Bucharest seen an increase of 96% in the number of the tech meetup groups from 46 in 2015 to 90 in 2016.

Tech-related Meetup groups by city 2015/2016

Accelerators

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Tech events

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