Ecosystem Deep Dives #21: Romania - A long time coming

Romania's former communist government wasn't keen on private enterprise. But decades later, Romanian tech founders are using some elements of communist legacy to their advantage.

Bucharest, Romania’s capital (source)

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Introduction

Plagued by Nicolas Ceausescu’s dictatorial and communist regime until 1989, Romania hadn’t seen the true emergence of private enterprises before its transition to democracy in the early 90’s. However, three decades later, Romania is emerging as one of the most exciting tech hubs in Europe, due to a tradition of high-quality STEM education, fast internet speeds and globally-minded, motivated young people. Recognized as one of the world’s best IT outsourcing hubs, Romania has recently been developing its own start-up ecosystem, with a number of impressive successes under its belt.

The first wave of Romanian tech entrepreneurs can be traced to the Soviet legacy; indeed, Romania was “chosen” by communist leaders at the time to be the country in charge of developing the IT industry. After Ceausescu’s fall, young Romanians put their STEM education to use by launching private IT enterprises, with some of the most telling examples being Radu Geoergescu’s RAV Antivirus (sold to Microsoft in 2003) and Bitdefender, founded in 2001 and now eyeing an USA IPO with a valuation of nearly $2 billion.

This first wave of entrepreneurs would also highlight a Romanian specificity; extremely high-speed internet. Indeed, when the demand grew, the country’s main telco company Romtelecom didn’t even exist. To remediate to this, entrepreneurs would set up so-called “Local Area Networks” (LAN’s), small, localized networks that only serve a customer base of a few blocks but thus deliver way higher internet speeds.