Over the past decade, Central and Eastern Europe (CEE) has undergone a transformation. Once associated mainly with operational efficiency, today the region is positioning itself as a strategic platform for innovation, technological maturity, and global expansion. The convergence of talent, infrastructure, cost competitiveness, and proximity to key markets has made CEE one of the most dynamic regions for next-generation business models.
At Mercaton SICAV, we believe that CEE’s transition from a “support hub” to a “launchpad” is not a trend — it is a structural shift in the geography of innovation and capital.
The Rise of the CEE Innovation Economy
CEE is home to some of the highest densities of STEM talent in Europe. According to Eurostat (2023), countries such as Poland, Romania, and the Baltic states produce more science and engineering graduates per capita than many of their Western European counterparts.
This talent concentration, combined with competitive operational costs, has created an environment ripe for innovation. Moreover, the region has matured significantly in terms of startup ecosystems and access to venture funding. According to Dealroom (2023), VC investment in CEE has grown by over 4x since 2018, with more global investors entering the market.
Several globally recognized companies have emerged from or established strategic operations in the region:
UiPath, founded in Romania, scaled its robotic process automation platform from Bucharest to a $35B IPO on the NYSE (NYSE, 2021).
Bolt, born in Estonia, built a mobility platform that now serves over 45 countries, with core development still anchored in CEE (Financial Times, 2023).
Relativity Space, a U.S.-based aerospace innovator, selected Poland as a strategic location for AI-driven engineering operations (Relativity HQ, 2023).
These are not isolated successes — they reflect CEE’s growing role as a generator, not just an adopter, of innovation.
Why Multinationals Are Building from Within CEE
Several structural advantages are accelerating CEE’s positioning as a strategic base for innovation:
Engineering depth: The region has strong capabilities in deep tech, AI, cybersecurity, aerospace, and industrial automation (Dealroom, 2023).
Operational resilience: CEE's proximity to both Western markets and Eastern geopolitical dynamics makes it an ideal location for testing, refining, and exporting scalable solutions.
Integrated market access: As members of the EU, CEE countries benefit from harmonized regulatory frameworks and commercial integration (European Commission, 2023).
Together, these factors make CEE a compelling destination for companies seeking not only cost savings, but strategic positioning in an increasingly fragmented world.
Our Perspective at Mercaton SICAV
At Mercaton SICAV, we view CEE as a region where local strength converges with global opportunity. Through our Growth Equity Fund, we support companies that are:
Locally embedded — using regional talent, infrastructure, and insight
Structurally undercapitalized — navigating a funding gap between early-stage VC and late-stage PE
In transition — going through leadership, ownership, or market expansion shifts
Positioned for global relevance — in sectors such as industrial automation, applied AI, and cybersecurity
We focus on special situations — not as distressed cases, but as moments of inflection where well-timed capital can generate long-term strategic value.
Investing in the Future from Within the Region
CEE is no longer just a place where global products are localized — it’s where global products are created. The new paradigm isn’t to relocate talent to the West, but to build globally from within the region.
As investors increasingly seek geographic diversification, talent access, and operational resilience, CEE offers an unmatched combination of those factors.
For forward-looking capital, this is not an emerging market.
This is an evolving frontier.
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