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Nearly 80% of Czech start-ups plan to expand abroad

This is confirmed by the most recent Startup Report from the Keiretsu Forum and CzechInvest’s experience

Nearly 80% of Czech start-ups plan to expand abroad Source: CzechInvest

With rising globalisation, the number of start-ups considering foreign expansion is naturally growing. This is aided by the ever-increasing extent of digitalisation, automation and interconnectedness of individual economies. Only 22% of Czech start-ups are not (yet) considering such an expansion. This is apparent from the responses of 150 start-up entrepreneurs who contributed to the formulation of the comprehensive Startup Report 2019/2020. A similar trend is indicated by statistics from CzechInvest, which has been focusing on support for start-ups since 2011. “More than 70% of the start-ups we have supported within our programmes have also travelled abroad with us,” says Markéta Přenosilová, head of CzechInvest’s Start-up and Innovative SME Division.

For the absolute majority of Czech start-ups, the Czech Republic is the primary place of business. At the same time, however, there is a growing number of expanding start-ups – 30% of them are doing business outside of the Czech Republic. In the past, the percentage of start-ups operating beyond the CEE region was in single digits. “In connection with a discussion of experts, this year we included global ambitions among one of the five features defining a start-up. This feature partially distinguishes a start-up from a small or medium-sized enterprise. In spite of that, expansion is one of the key issues that Czech start-ups still perceive as their major weakness,” explains Tereza Zyklová, executive coordinator of the Keiretsu Forum.

According to the Startup Report, the largest number of start-ups head to Europe, then to North America or Asia. CzechInvest sent the most young innovative companies to Silicon Valley, New York, London and Lisbon. Expansion is not easy for start-ups, but it is a tremendous opportunity and a possibility to test their business.

CzechInvest has support one hundred start-ups in their expansion abroad

In the last two years, the proportion of start-ups based outside of Prague has also increased. Brno and Ostrava have significantly strengthened their position in this regard and development of the start-up ecosystem can be seen also in other cities. Among other things, this is due to the rising number of regional innovation centres and programmes aimed at supporting local start-ups. At the same time, local support is a necessary prerequisite for the further development of companies. “If start-ups are considering expansion, they often ask questions pertaining to, for example, the kind of strategy they should choose in order to be successful, which markets they should start on, the right time to expand, how to find the right partners and how to address customers,” says Přenosilová.

CzechInvest, which has long been helping start-ups to succeed on foreign markets and to acquire necessary know-how, advises start-ups on these issues through its mentors. With its CzechAccelerator, CzechMatch and CzechDemo programmes, the agency sends five start-ups abroad per month on average, to destinations such as London, New York, San Francisco and Singapore. Since 2016, CzechInvest has thus supported more than one hundred start-ups, a number of which have repeatedly used the agency’s services. In total, two hundred start-ups have participated in the above-mentioned programmes. “From our experience, the start-ups that succeed are those that have not only an internationally competitive product and good sales skills, but also an experienced team that is able to overcome new challenges. At the same time, they must be persistent, accept constructive criticism and not get discouraged immediately,” Přenosilová adds.

Retailys, a start-up offering an online platform that helps businesses sell in global marketplaces around the world, also travelled abroad with CzechInvest. The company took part in the three-month CzechAccelerator programme in Singapore and returned there with the CzechMatch programme, in connection with which it also attended the Slush Tokyo trade fair. Retailys has established itself in Asia to such a degree that it was able to open a foreign branch. “Currently, we are able to help European companies expand into Southeast Asia and we assist Asian companies with selling their goods in Europe. Thanks to the branch in Singapore, we see that it is easier for us to penetrate other countries in the region, which we are now focusing on,” explains Petr Heller, founder of Retailys.

The Keiretsu Forum’s Startup Report is a comprehensive study that reflects the current state of the Czech start-up ecosystem from the perspective of mentors, accelerators, representatives of corporations and investors, as well as start-up entrepreneurs themselves and the public. Data collection was carried out in late 2019 and early 2020 by means of online questionnaires. The Startup Report examines, for example, profiles of start-up entrepreneurs, describes the lifecycle of start-ups and analyses their problems and possibilities of financing. However, it also addresses a number of other areas. Its objective is to provide a comprehensive picture of the Czech start-up and investor environment. In addition to the Keiretsu Forum, other actors in the Czech start-up scene, including CzechInvest, also took part in the creation of the Startup Report.

The comprehensive Startup Report, including a press release from the Keiretsu Forum, is available here. CzechInvest’s statistics, which include the number of start-ups supported abroad, are available in a separate document in the e-mail attachment.

About CzechInvest
CzechInvest plays a key role in the area of comprehensive support for business and investments. The agency’s unique combination of regional, central and international operations ensures the integrity of its services and its ability to connect global trends with the regional conditions in the Czech Republic. One of CzechInvest’s primary objectives is the transformation of the Czech Republic into an innovation leader of Europe. CzechInvest is a state contributory organisation subordinate to the Ministry of Industry and Trade of the Czech Republic. The agency was established in 1992.