Startup Reaktor aiming to build stronger ties between CEE- based startups

Over 70 startup teams from Romania and neighbouring countries have already registered for the new Startup Reaktor incubation programme, launched by the Romanian Tech Startups Association (ROTSA). Tudor Pasc, incubation director at ROTSA, spoke to Business Review about the organisation’s efforts to attract startups operating in emerging sectors across Central and Eastern Europe (CEE) and the challenges faced by entrepreneurs as a result of the geopolitical tensions in the region.

By Ovidiu Posirca

What role does an incubation programme play in the overall development of the startup ecosystem and what is Startup Reaktor bringing to the market?

Incubators are safe, yet challenging playgrounds where future entrepreneurs can nurture and expand their business ideas based on the concepts they learn here. Startup Reaktor has these principles at its core and it brings to the market a complex and applied curriculum for startups, covering a wide variety of areas, from MVP validation to marketing, sales, management, and legal. Plus, the incubator has a wide mentor network and startups have the opportunity to schedule 1:1 sessions with them as needed. Lastly, startups can benefit from regional expertise and receive valuable feedback that is tailored to the region.

Why should an early-stage startup join an incubation initiative?

Startup Reaktor is open to early-stage teams or startups, whether or not they have reached the MVP (Minimum Viable Product) stage. Applying teams must not have already established a legal entity for the project. Each team or startup can register a single project. In short, for three main reasons—fail fast if it’s the case, learn from industry experts, expand your network—, getting to know likeminded people is always a win! It is a great opportunity to start building up core skills and to build up a network.

Your incubation platform is looking to attract startups from the entire CEE region. What are some of the strengths of emerging entrepreneurs in this area?

Curiosity and eagerness to learn and improve. There is also their willingness to thrive in the entrepreneurial sector, especially because it’s a pretty new concept that’s being explored as a professional path in the CEE region.

We think that Startup Reaktor can be the foundation to a strong network among

startups emerging from CEE countries. This goes hand in hand with easily connecting with investors or subject matter experts from other regions.

The opportunity for knowledge transfer among startups is also a key value, as they can share national experience and start nurturing strategic partnerships.

ABOUT

Tudor Pasc, Incubation Director, ROTSA

has extensive experience in the entrepreneurial ecosystem, having been an active player for more than 10 years and having supported over 500 tech startups in finding their growth path. Besides Startup Reaktor, he was recently involved in the EIT Digital Venture Programme as incubation director. He was the managing partner of ClujHub, the biggest coworking space/hub in Cluj, for more than 8 years. Pasc is also the curator of TEDxCluj.

How many startups are you looking to enrol in in the first year?

We are looking at enrolling up to 10-15 startups in the first year, with the plan to expand our efforts exponentially and reach 200 startups in three years’ time. So far, over 70 teams from Romania, Hungary, Greece, Serbia, Croatia, Albania, and Slovenia have registered for Startup Reaktor.

The startups that have applied so far come from various fields such as finance, health, education, human resources, ecology, hospitality, transportation, gaming, hardware & software, data & analytics, agriculture, sport, and construction.

Which sectors are more competitive in the Romanian startup industry and how will this be reflected by the final structure of Startup Reaktor?

ing the most competitive startup industry, it would be technology. This is also ROTSA’s focus: tech startups. We have noticed that the biggest hype is around MedTech, FinTech, and AI/IoT. Startup Reaktor’s acceptance criteria are mainly focused on business model, scalability, and market potential, rather than following specific industry verticals. This means that startups have equal chances, regardless of the tech category they focus on.

During the interviewing and selection

phase, we will benefit from input from experts and investors who are highly skilled in specific areas, which will allow us to make the best choices.

How should entrepreneurs prepare for the evaluation stage as they seek to join Startup Reaktor?

The project evaluation criteria include the composition and expertise of the team, the

business model, the solution’s impact on customers, the innovativeness of the solution, and the development plan.

Once the application phase closes, startups will be contacted for an interview and the points above are the most important ones to clarify.

Will startups be able to negotiate funding rounds during the incubation period? Which funds will join the project?

After the 10 weeks of training sessions, iteration on existing solutions, and 1:1 mentoring, Startup Reaktor will look at setting up a funding framework. This means that if startups are ready to be funded, we will facilitate the experience.

Given the fact that we are working with early-stage startups, we are planning to follow up with the teams after the 10 weeks they spend in the incubator and see how additional help could be provided.

How is the CEE-based startup ecosystem developing considering the geopolitical tensions in the region?

We are fully aware and mindful of the current geopolitical context in the CEE region and we are actively supporting startups, especially through the hub infrastructure which is available in our portfolio.

On the other hand, despite any global tensions, it is very important to continue to scale up various sectors so that we can minimise the effect of currently affected markets. The whole ecosystem must make a common effort in order to keep things above water.

New hotel deliveries set to bolster market recovery

The local hotel market is still reeling from the effects of the pandemic, with leisure tourism recovering at a faster pace in resorts. In large cities, demand for accommodation from the business segment is growing rather slowly, while hotel operators are expected to deliver at least 1,000 new rooms in Bucharest and regional cities by the end of 2023.

By Ovidiu Posirca

Bucharest’s hotel market is not oversupplied and we could see more projects being launched over the medium term

The hotel sector saw one of the sharpest falls in demand during the pandemic as travel restrictions and quarantine measures were imposed to limit health risks. The market is still in recovery mode and it should get back to its pre-pandemic level by 2024, according to consultants.

The effects of the elimination of restrictions were felt right away. According to official statistics, in April 2022, the average hotel occupancy rate in Romania was 29.2 percent, compared to 18.6 percent in April 2021 and 7.1 percent in April 2020. Still, this was considerably lower than the April 2019 level, which was 35.5 percent, say representatives of real estate consultancy JLL Romania. "Considering the fact that the pandemic has slowed down, it would be a good moment for upgrades and refurbishments in order to be prepared to take advantage of the upcoming rebound in tourism activity," Alexandru David, head of research at JLL Romania, tells BR.

Upgrades are already underway at some of the largest hotels in Bucharest. Radisson Blu will become one of the largest five-star hotels in Central and Eastern Europe, with 623 keys. Revetas Capital, the owner of the Bucharestbased project, will add 200 new keys in two rebuilt wings. The new rooms will be open for tourists in early 2023, as part of an EUR 24 million investment programme.

Athénée Palace Hilton, part of ANA Hotels, also has a major refurbishment plan in the

works. The company is investing EUR 40 million in its renovation programme, which is slated for completion in the summer of 2022.

The building that hosts Grand Hotel Bucharest will also be renovated by 2024, following an investment of EUR 21 million.

In central Bucharest, Niro Investment Group will reopen Grand Hotel du Boulevard, featuring 30 luxury suites, under the Corinthia brand. Next year, the group will open a hotel under Accor’s Swissôtel brand in the north of the city. "After a successful 2021, when global restrictions triggered a rise in domestic tourism, the future of the Romanian hotel market seems to be somewhat divergent: while a full recovery happened quickly for seaside and mountain resorts, large cities are still affected by the interruption in business activities, therefore market readjustment in Bucharest or regional cities will be slower," Ilinca Timofte, head of research at real estate consultancy Crosspoint Real Estate, tells BR. Demand for accommodation skyrocketed in larger cities following Russia's invasion of Ukraine, with millions of people fleeing the country in search of safety. ibis Styles Bucharest Airport, located in Otopeni, is this year’s newest addition to the Bucharest hotel stock.

Outside Bucharest, Romanian developer Nordis Group aims to deliver the first two hotel buildings of its Mamaia-based

project, which include 712 rooms, while two additional buildings in the first development phase will have 620 apartments. At the

same

time, the developer has kicked off the construction of a hotel and residential project in Brasov. The complex will feature 158 hotel rooms and 43 residential units. The group will sell the hotel rooms and

manage the accommodation process, offering owners an annual yield of 7 percent. Brasov is already one of the most popular cities for domestic and foreign tourists, and some 660 rooms branded by international and domestic hotel chains will be completed by 2023, according to data from real estate consultancy Cushman & Wakefield Echinox. As for Bucharest, the market is not oversupplied, and we could see more projects being launched over the medium term, consultants say.