Private equity and venture capital deal value in central and Eastern Europe spiked to $4.25 billion during the year to Nov. 16, up 88% compared to full year 2021, S&P Global Market Intelligence data shows.
However, the 317 deals during the same period still trailed the full-year 2021 total of 376 deals.
Biggest deals
The largest transaction in the region so far in 2022 was the $711.3 million funding round of Estonian ride-hailing and scooter-sharing platform Bolt Technology. Sequoia Capital Operations LLC co-led the funding round.
Croatian electric vehicle company Rimac Automobili's $536.4 million series D round ranked second. SoftBank Investment Advisers (UK) Ltd.'s SoftBank Vision Fund 2 and West Street Capital Partners led the fundraising activity.
Estonia saw the largest transaction volume totaling $1.32 billion across 77 transactions, bolstered by Bolt Technologies' funding round. Croatia and Poland recorded $1.05 billion and $847.5 million in transaction value, respectively.
In demand sectors
The technology, media and telecom sector attracted the largest amount of capital so far in 2022, with $1.58 billion in transaction value across 191 deals. The consumer sector followed, with $1.40 billion in transaction value across 46 deals.
The industrials sector booked $848.4 million in total deal value across 25 transactions.
Rosy outlook
Private equity activity in central and Eastern Europe is expected to expand further as the region's economic growth consistently outperforms Western Europe and as the asset class continues to mature, according to a report from consultancy firm Bain & Co., the Polish Private Equity and Venture Capital Association, and private equity firm PFR Ventures Ltd.
"Today, with a mature ecosystem — including a pool of management talent, experienced [general partners], and founders who are more open to working with funds — the [private equity] and [venture capital] industry in this part of the world has all the pieces in place to embark on sustained acceleration. That should allow funds to capitalize on the unique advantages that will help the region continue to outperform more mature markets," according to the report.
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Private equity firms in the region have matured over the past two decades as they increased their level of specialization and focus on value creation and standardized investment processes, the report added.
The report defines central and Eastern Europe as the 11 countries in the region that are members of the EU: Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia.