The startup boom in the Czech Republic began after 2010, when new projects supporting startups, e.g. StartupYard, Impact HUB, JIC StartCube or Czech Accelerator appeared. The Czech ecosystem is strong in information and communication technologies. Therefore, it is not surprising that Czech startups offer more often software products than key technology solutions such as nanotechnologies, advanced materials or manufacturing technologies. The most common type of products of Czech startups is SaaS, followed by web technologies and mobile software.
Concerning the maturity of innovative companies, the majority of Czech startups are in the seed phase, and financing of their projects is limited to their resources. The Czech Republic is also famous for its innovative companies in the field of cybersecurity, such as antivirus companies AVAST, AVG or Cognitive Security, ThreatMark. Among other internationally known Czech unicorns belongs Kiwi.com.
Innovation is not linked only to the capital city of the Czech Republic, even though the majority of startups are based there. Brno, the second-largest city, is becoming known as Svratka Valley as it is built on the river Svratka, and the concentration of startups and big corporations like IBM or Red Hat makes it the perfect environment for innovative entrepreneurs.
There is no central body to coordinate the efforts supporting startups – putting aside a recent initiative by CzechInvest to launch a dedicated website, Czechstartups.org, which acts mostly as a crossroad for information. In this bottom-up configuration, the efforts are rather scattered across regions, and relatively limited. They are often centered around university incubators or Tech Transfer Offices – for example, VTPO at the University of Olomouc, xPort at Prague University of Economics, or InQBAY at ČVUT in Prague. The most remarkable of them is arguably CPI at VŠB-TU in Ostrava, which also runs its acceleration programs for university students.
The only region where one can talk of an organized ecosystem is South Moravia. This is where JIC runs its incubation and acceleration programs, works with corporations and mature SMEs, and coordinates a regional innovation strategy. JIC also has its own, publicly funded investment vehicle, JIC Ventures, which takes minority stakes in startups.
Meanwhile, Prague, with all its concentration of highly qualified jobs and academic research, has offered by far the best prerequisites for startup activity. Several remarkable startups were born in the capital.
A significant fraction of Czech startups operate in the IT field and, in particular, cybersecurity. Beyond AVG and AVAST, which are the biggest successes, there is also a significant number of medium-sized companies such as Cognitive Security (which was sold to Cisco a few years ago), Apiary (sold recently to Oracle), Flowmon, Netcope, Trustport, and others.
When talking about mature companies (under 25 years of age, given the Czech history) there are several interesting players in the fields of software (e.g. Seznam.cz, Gooddata, Certicon, Kiwi.com), scientific instruments (e.g. Tescan, PSI, Delong Instruments), hardware and electronics (e.g. Jablotron, ERA, Ysoft, 2N), and a handful in biotech / fine chemistry (e.g. Biovendor, Contipro).
The Innovation Strategy of the Czech Republic for the years 2019-2030 is a major supporter of the Czech industry and innovation via European and national programs.
• OP EIC 2014-2020 - allocation of 4.3 billion, 434 mln (10 %) for financial instruments in total 1,2 billion allocated on energy efficiency (31 mln on pilot financial instruments).
• National Guarantee Programme (NGP) - allocation in the first stage of CZK 900 mln; NGP enabled loans over CZK 5 billion for SMEs during the last six months; with counter-guarantee from EIF-COSME – European Fund of Strategic Investment.
The key stakeholders of the Czech startup ecosystem are:
• SIC South Moravian Innovation Center
• Green Light
• Impact Hub
• Prague IoT Centre
• ESA BIC
• University of Economics (VŠE)
• Czech University of life Sciences Prague (CULS)
• Czech Technical University in Prague (CVUT)
• The Centre for Knowledge and Technology Transfer (CPPT)
• Air ventures
• Credo Ventures
• Reflex Capital
• Keiretsu Forum
The Czech Republic has a weaker investment environment, which does not motivate new projects to be set up and funded. There is partial support for startup projects through the CzechInvest agency in the form of incubation and acceleration programs, but there is a lack of a comprehensive national concept for their establishment, development, and financing.
Universities support the development of startups/spin-offs with reluctance as these projects are generally considered to be risky. From entrepreneurial practice, there is insufficient motivation to use academic outputs, while in the Czech Republic there is also a rigid approach of corporations and SMEs to cooperate with startups. For the young Czech innovative companies themselves, their ability to expand abroad is lower because of insufficient internationalization.