HICEE Programme Publishes Study on Start-Up Investment Challenges and Recommendations for the CEE Region

A new study conducted by the Healthy Investment Central and Eastern Europe (HICEE) Project team has identified key challenges and opportunities in developing investment ecosystems for healthcare innovation in Central and Eastern Europe. The survey gathered responses from various investors, including VC funds and business angels, with the highest representation from Hungary, Slovenia, the Czech Republic, France, and Sweden.

Spearheaded by EIT Health, the HICEE initiative seeks to address pressing barriers hindering start-up growth in the region. The project consortium includes business acceleration service providers and investors from Hungary, Poland, Slovakia, and Slovenia, along with innovation hubs from Belgium and the Netherlands.

“Despite its potential, Central and Eastern Europe remains underfunded in the venture capital landscape, particularly in healthcare innovation,” said Célestin Garcelon, Programme Manager from EIT Health. “With HICEE, we are actively working to bridge this gap by strengthening investment readiness, building investor confidence, and fostering an ecosystem that supports sustainable innovation. The first step to achieve that is understanding the challenges and the needs of investors – that’s why we conducted a thorough report to find out what they require.”

Challenges and the investment landscape in CEE

Historically, the CEE region has faced several structural barriers to innovation, including limited access to financing, underdeveloped research and development capabilities, and a lack of supportive infrastructure. In 2021, the region accounted for only 3.2% of Europe’s total venture capital investment, with healthcare start-ups in the region receiving an average of €1.2 million—only a third of the European average of €3.8 million[1].

In recent years, macroeconomic pressures, rising interest rates, and geopolitical uncertainties have further dampened investor enthusiasm. According to the 2023 Central & Eastern Europe Private Equity Statistics, private equity investment in the region fell to €1.71 billion, a 40% decline compared to the previous year and 43% below the five-year average[2].

Investment remains highly concentrated in select markets. Czech Republic attracted 27% of total private equity investment, followed by Poland at 26% of the CEE total, Lithuania with 14%, and Romania with 8%. These four countries combined comprised 75% of the total CEE investment by value and 41% of the companies receiving private equity investment in 2023. Meanwhile, Hungary saw 6.7% of investment by value but had the largest number of companies receiving private equity funding (115), representing 23% of all deals in CEE. Slovakia and Slovenia lagged behind, attracting only 2.3% and 0.76% of total investment, respectively.[3]Among all investors, Poland is expected to be the most dynamic investment destination in CEE by far, with 4 out of 5 investors naming the country as “promising” for venture capital investment in the three coming years.  In comparison, other countries in the region received similar levels of optimism from fewer than 45% of investors. Czechia garnered the second-highest level of optimism at 43%, followed by Estonia at 39%. Slovenia and Romania each earned 20%, while Hungary and Lithuania received just 14%.

The findings reveal a strong trend of collaboration between Western European investors and local partners in the CEE region. Nearly all Western European investors operating in CEE have established partnerships with local players to execute their investments. In contrast, only 34% of CEE-based entities have formed partnerships with Western European investors. This imbalance may signal an opportunity for CEE investors to forge stronger ties with Western European counterparts, potentially bringing more capital and expertise into the region.

Barriers to investment: lack of early-stage funding and investor confidence

One of the most significant issues affecting healthcare start-ups in CEE is the lack of early-stage venture capital. Many companies struggle to secure the funding needed for product development and market entry, limiting their ability to scale. The region also faces a knowledge gap, with many entrepreneurs lacking the expertise to navigate fundraising effectively. This lack of familiarity with investment processes results in missed opportunities.

Investor confidence remains another major hurdle. According to the industry expert quoted in the study , the perception that “CEE is still seen as the weird child of Europe” persists, making investors hesitant to engage in cross-border funding. While 49% of investors believe that investment potential in CEE is increasing, only 25% consider it on par with Western Europe. As expected, CEE-based investors have a more optimistic outlook than their Western counterparts, perceiving the region’s potential to be greater.

Investors cite several barriers to investing in CEE, with the most critical challenges being quality of deal flow (92% of respondents consider it to be a moderate challenge), followed by difficulty securing follow-on funding (80%), institutional trust, legal framework complexity and Political stability concerns (all 64%). On the other hand, geographical distance, currency fluctuations, and rising interest rates were seen as minor obstacles. Instead, investors emphasize the importance of having access to high-quality deal flow, skilled talent, and strong institutional trust to increase investment confidence.

The solution: how HICEE can connect CEE entrepreneurs with capital

The HICEE initiative is designed to address these challenges by enhancing technology transfer capabilities, , strengthening investor-start-up networks, providing targeted support for early-stage healthcare ventures and facilitating cross-border investment opportunities.
Networking events and access to funding remain top priorities for investors. Through HICEE, EIT Health and its partners are actively working to create an investment-friendly environment that fosters innovation and economic growth.

“To truly unlock the potential of Central and Eastern Europe, we must build stronger connections between start-ups and investors,” added Peter Nagy, Programme Manager from EIT Health InnoStars. “By improving investment readiness, increasing deal flow, and fostering institutional trust, the HICEE programme is setting the stage for a more competitive and dynamic healthcare innovation ecosystem in the region.” 

The full report is available at the HICEE programme website.