Moldova Ranks in the Top 80 for Startups Worldwide According to 2021 Report
Despite slipping down from the previous year, Moldova still ranks in the Top 100 countries for startups, and the Top 20 among Eastern European countries, according to StartupBlink’s annual Global Ecosystem Report.
Sliding 13 spots down from the previous year, Moldova’s future still looks promising while sitting at 77th. However, it is largely dependent on its capital Chisinau, which was the only city from the country to also rank among the list of top startup cities.
We expect Moldova’s rank to climb for future reports, as the IT industry is currently experiencing tremendous growth.
Plans are also in effect to turn Cahul into the country’s first “startup city”.
The Moldovan Startup Ecosystem
Various factors positively contribute to Moldova’s startup potential. They include tax incentives (IT Park), an affordable digital talent pool, and the development of an interconnected network of startups, experienced founders, and corporate funding.
One explanation for the latter is due to the country’s proximity to the higher-ranked Romania (41st) and Ukraine (34th), as well as its strong connection to Russia (17th). These connections offer Moldova the ability to successfully become a bridge between the more powerful startup ecosystems and leverage their successes.
IT Park
Moldova’s attractive tax incentives are associated with the virtual IT Park initiative that allows member startups to operate from any part of the country and only pay a 7% flat tax rate. The flat tax rate substitutes corporate income tax, personal tax, social security taxes, and estate taxes.
The IT Park also works to improve government policy for the IT sector and as a facilitator for generating jobs, attracting investments, networking, and supporting its members.
Tekwill
The digital talent pool is assisted by the establishment of Tekwill, a platform dedicated to the development of the IT sector in the country.
Created in 2017 by the Moldovan Association of ICT Companies, in association with USAID and the Swedish government, the program seeks to ensure the economic development of Moldova by improving the entrepreneurial and educational capabilities of the local talent pool.
Tekwill also offers a coworking space, event rooms for conferences and workshops, IT courses, and certifications.
Startup Star Players
Unsurprisingly, the leading industries of Moldova’s startup ecosystem include software and data, e-commerce and retail, and financial technology (Fintech).
The e-commerce industry has been steadily rising in Moldova in the last few years, including a 30% rise in online purchases, during the pandemic according to Startup Genome.
A few of the recent startup standouts include:
Planable
Planable is a social media management platform that allows businesses to collaborate with clients.
Salt Edge Inc.
Salt Edge is a financial API platform that offers a secure and stable bridge between financial providers and lenders.
RitLabs
RitLabs is a software development company that specializes in communication products for private and corporate clients.
Bancamea
Bancamea is a service that informs the public about everything they need to know regarding the country’s banking system.
FunEasyLearn
FunEasyLearn is an offline learning language platform that offers courses in 34 languages.
Chisinau’s Startup Ecosystem
As its capital and only city to be ranked on the global list, Chisinau is currently the epicenter of Moldova’s startup ecosystem. Teeming with potential, the city has the ability, per the Global Ecosystem Report, to turn into an entrepreneurial hub for the following reasons:
- Low cost of living
- Trilingual Population
- Conveniently located between the European Union (EU) and the Commonwealth of Independent States (CIS)
- A strong tech talent pool
- Excellent wired and wireless Internet connectivity
However, Chisinau has shown a negative momentum in the last years, moving down StartupBlink’s list versus up.
The Global Ecosystem Report attributes the downturn to the loss of labor. It notes that the government must work to develop sturdier infrastructure to support the city’s startup community and provide incentives for local entrepreneurs.
If not, many are likely to keep fleeing to larger countries with higher-ranked startup ecosystems and better financial opportunities.
Will Cahul be the Next Startup Hub?
If Chisinau is Moldova’s current startup epicenter, the city of Cahul is poised to become the second.
Cahul is on the cusp of becoming the next shining star of Moldova’s economic development.
Implemented by the National Association of ICT Companies (ATIC) in association with the European Union (EU) via Sweden, the goal is to turn Cahul into Moldova’s first “startup city”.
Efforts include increasing local employment, developing innovative businesses, increasing the region’s overall competitiveness, and foreign appeal.
The goals will be achieved in three ways:
The EU4Innovation Center
The EU4Innovation Center will be a regional center of excellence in IT to develop local services, various programs and promote the use of technology.
Support for STEM Education
The support for STEM education will be implemented via educational programs for the training and expansion of skills that will satisfy the needs of the private sector.
Support for the Development of Entrepreneurship
Support for the development of entrepreneurship will include various steps to facilitate the creation of local startups, strengthening their development, and assist in investment.
The milestones expected in the coming years regarding Cahul’s development as a startup city include:
- 300 students from universities and colleges to attend training courses in IT and related fields.
- 500 teachers to improve their digital skills in training programs.
- 2600 people to benefit from entrepreneurship education programs.
- 20 local startups to benefit from assistance and support.
Moldova’s Future as a Startup Hub?
Moldova shows tremendous promise to hold its own amongst other Eastern European nations and even the world when it comes to the startup industry.
However, significant investment must be made to incentivize the local talent to view the country as more than just a stepping stone to other superior, more lucrative countries.
We’ll be keeping an eye out for the StartupBlink’s 2022 report, and for the new startups coming out of Chisnau and Cahul. If you’d like to discuss the Moldovan start-up scene with us, join our growing community.