The Startup Ecosystem of Hungary

Hungary has numerous mature tech companies, such as well-known scale-ups Prezi, Ustream, and LogMeIn. However, in recent years, the ecosystem has not been able to keep up with its previous progress toward creating a critical mass of high-quality global startups. This is mainly the result of political and economic challenges, and the shortage of local IT talent due to brain drain.
The rift between the EU and Hungary over the country’s controversial judicial reforms have presented challenges for the country’s startup ecosystem and affect its connectivity to the region.
Yet, good news is continuing to arrive from Hungarian startups. For example, a recent exit, AImotive, is a startup specialized in autonomous vehicle technologies. While exits like AImotive are inspirational for entrepreneurs, more such success stories are required to maintain motivation in the ecosystem. There are several advantages for Hungarian entrepreneurs, including a low cost of business related overhead, a low cost of living, and proximity to the European market. Furthermore, Budapest is a popular digital nomad hub in Europe, with innovative coworking spaces and strong startup networks that attract skilled foreign entrepreneurs. The country offers the White Card Visa that allows foreign nationals who work or hold a share in a company outside of Hungary to stay in Hungary for up to two years. Another step towards attracting international talent is the Hungarian Entrepreneur Program. It enables non-European citizens to have temporary residence permits while building their businesses in Hungary.
Besides attracting talent, the government is actively involved in the ecosystem through support initiatives including Hiventures, a government-backed VC firm that became an important player in the local VC scene. There are also several government-backed incubators and JEREMIE (Joint European Resources for Micro to Medium Enterprises) funds.
Several other initiatives and organizations to support the growth of the Hungarian startup ecosystems, by both the private and public sectors, include government-backed agency Design Terminal, the INPUT program, the National Research Development and Innovation Office NKFIH, Startup Safari, and the ICT Association.