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Romania’s Tech Revolution is Getting Started

Romania’s Tech Revolution is Getting Started

In Bucharest and elsewhere in Romania, the AI start-up scene goes from strength to strength. 

Silicon Valley. Silicon Roundabout. Bucharest. It may not seem like a logical progression, but the Romanian capital is showing signs of becoming one of the world’s next tech hotspots. This is underpinned by an expanding IT talent pool, cheap operating costs, high-grade digital infrastructure and buoyant national economic growth. 

AI-fuelled Growth

Today, start-ups putting down roots in Bucharest (and other Romanian cities such as Cluj) can expect thousands of monthly meet-ups, new private and public funding initiatives, networking conferences such as Techsylvania, and dynamic co-working spaces. More and more are leveraging the power of artificial intelligence as they look to develop innovative and compelling B2B and B2C offerings. 

According to Constantin Pelehra, a senior project manager with Horváth & Partners in Bucharest, 

“The AI start-up scene in Romania is young and small, but it’s expanding rapidly. The first local venture capital funds were established just three years ago, but tech investments reached 60 deals (worth 31 million euros) in 2020, up from 40 deals in 2019. Seed funding doubled year-on-year to 22 million euros in 2020.”

On the back of such growth, Horváth & Partners expect investments in AI start-ups to reach at least 50 million euros by 2025, says Pelehra: 

“This is a conservative estimate. There’s a lot of innovation going on, with fresh faces appearing all the time. Increases in seed funding tend to lead to exponential increases in series A funding, so there’s a snowballing effect. On top of this, the Covid-19 pandemic has accelerated digitization in Romania, which means the domestic market is increasingly ripe for AI-based applications.”  

UiPath: an RPA Frontrunner 

UiPath

In March 2018, Robotic Process Automation (RPA) software provider UiPath became the first Romanian start-up to acquire the status of a so-called “unicorn” – a privately held start-up company valued at over $1 billion. 

The company has its origins in a software outsourcing company founded by UiPath CEO Daniel Dines and CTO Marius Tirca in 2005. But it wasn’t until 2012 that the team – which then numbered 10 people – pivoted towards RPA and started putting its resources into building a platform for the training and deployment of software robots.

Since 2018 UiPath has continued to grow, shifting its headquarters from Bucharest to New York, taking on thousands of employees, and expanding into an ever-growing number of markets. In April 2019, the company closed a Series D round of funding, raising $568 million to become (at $7 billion) one of the highest-valued AI companies in the world. 

Today an ever-growing number of companies are turning to RPA to streamline enterprise operations and reduce costs, with UiPath well-placed to meet their needs. With RPA, businesses can automate mundane rules-based business processes, enabling business users to devote more time to serving customers or other higher-value work. Others see RPA as a stopgap en route to intelligent automation (IA) via machine learning and AI tools, which can be trained to make judgments about future outputs.

UiPath’s Chief Strategy Officer Vargha Moayed explains that:

“UiPath leverages AI in many ways. First and foremost, we use computer vision –  a form of AI where a software robot “reads” a computer screen and emulates what a person in front of a computer can do. This is a very powerful technology that can replace the need for humans to perform ‘swivel chair’ integrations between disparate applications by automating the process.”

UiPath has also created a product called AI Centre, where clients can upload machine learning models that can be triggered by robots, allowing them to automate processes that require cognitive decision-making. The company also uses another branch of AI called Natural Language Processing (NLP), which can extract and understand information from unstructured formats and turn it into digital structured data that can then be acted on by a robot.

A Bright Future

Credit: DRUID

UiPath has served as an inspirational role model for many other Romanian tech start-ups, several of which have also now achieved unicorn status. The country’s largest online retailer eMag (widely known as the Amazon of Romania) became the second in December 2018, followed by Elrond, a blockchain start-up, in early 2021. Elrond has developed a new blockchain technology that can process more than 15,000 transactions per second, compared with 7 and 14 transactions per second by Bitcoin and Ethereum (the world’s top two cryptocurrencies).

UiPath has served as an inspirational role model for many other Romanian tech start-ups, several of which have also now achieved unicorn status. The country’s largest online retailer eMag (widely known as the Amazon of Romania) became the second in December 2018, followed by Elrond, a blockchain start-up, in early 2021. Elrond has developed a new blockchain technology that can process more than 15,000 transactions per second, compared with 7 and 14 transactions per second by Bitcoin and Ethereum (the world’s top two cryptocurrencies).

For Vargha Moayed,

“Many Romanian entrepreneurs have told me that the story of UiPath has inspired them to dream bigger. Until recently, many talented Romanian entrepreneurs, unlike their American counterparts, did not allow themselves to think big, which really limited their success. The success of UiPath has also helped to put Romania on the global tech map, which has opened doors for other companies.”

Founded in 2018, DRUID is another Romanian AI start-up rapidly making a name for itself. The Bucharest-based company has developed a “no-code” chatbot design platform to help organizations with planning, developing and deploying chatbots. It has so far raised nearly US$7 million and has more than 100 customers across the world. In 2020, UiPath partnered with DRUID to offer clients a platform integrating the capabilities of DRUID chatbots and UiPath’s software robots. 

According to DRUID’s Chief Revenue Officer Andreea Plesea, 

“Romania’s AI start-up ecosystem is still in its infancy, but it has an increasingly bright future ahead of it. The country is in a solid position to triumph in cybersecurity, enterprise software, fintech and AI-based engines, and it’s a pretty safe bet we’re going to see more Romanian unicorns in the near future.”

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