And we refer to IT heaven or destination of choice, we mean on both sides of the outsourcing IT companies and native IT professionals aka programmers and developers.
While for most people, Romania is a 2nd world country that plays little to no interest, major tech companies from around the world have seen the hidden gems this country has to offer, IT-wise. For instance, the US giant Fitbit’s acquisition of the Romanian Vector Watch company at the beginning of 2017 comes as a confirmation.
Without further ado, let’s see which are the 5 things that make Romania an ideal IT destination for companies and IT professionals.
# 1 Numbers & Stability
According to Mircea Vadan, founder of Cluj Startups, “There are a lot of people who have technical and software development capabilities. Compared with most other central and eastern European countries, Romania has the advantage of numbers - more human resources. It’s easier to find talent. Being part of the EU is also an advantage compared with Ukraine, which is bigger in size and has a lot of talent, but is going through a tough period.” In addition to this, the demand for skilled IT professional has boosted entrepreneurship. And while not all IT startups make it on long term, when one fails, its employees can easily find jobs in other IT companies.
# 2 Lower Costs Make for Larger Profits
Another big advantage Romania has compared to western European countries when it comes to IT investments are costs. According to InvestRomania, the rents that companies pay in Bucharest are around half of those they pay in Berlin. Salaries, which make the biggest expenditure for IT companies, are also affordable by western European countries. An annual average in Romania is somewhere around €17,000 and the cities that boost the start-up scenes in Romania are Bucharest, Cluj-Napoca, followed by Brasov and Timisoara.
# 3 IT Start-ups on the Rise
While in 2016, Romanian start-ups raised €11.3m, according to Bogdan Ceobanu, former IT entrepreneur and currently in the European Commission’s start-ups and innovation unit, the first 8 months of 2017 the number rose to €38.4m. The largest Romanian IT start-ups who largely contributed to these numbers are the robotic process automation software UiPath and Clever Taxi, a ride-hailing app.
# 4 Romanian Talent Recognized Overseas
Did you know that two of the LiveRail founders, the video advertising optimisation start-up bought by Facebook for a reported $400-$500m in 2014, are Romanian? The company even had an office in Cluj-Napoca. UberVU founded by Romanian developers was a $15-$20m acquisition, this time made by Canadian giant Hootsuite. The list goes on with InterAKT acquired by Adobe in 2006, RAV bought by Microsoft, Summify that was acquired by Twitter in 2012 and so on. Romanian universities issue each year mathematics and tech olympics, brilliant minds who are easily hired by Google, Microsoft and other large IT companies in US and Europe.
There was a myth saying that the 2nd most spoken language at Microsoft was Romanian, given the large number of Romanian employees it had. Whether this is actually true, we don’t really know. But we do believe is that every rumor has a bit of truth in it, you know like the Chinese yin-yang philosophy.
# 5 The Need for Capital Investment in IT
What makes a country an IT heaven but being an emerging country with highly-qualified talent and openness, than a country that needs capital investments in the area? This is exactly what large IT companies are looking for when they want to establish headquarters and expand to a new country.
Peter Barta, an angel investor and VC fund manager, declared that “In Romania, most of the financing comes from state subsidies or public financing, either through grants or through fiscal facilities. The business angel community is less developed and not very well organised. It lacks transparency, and few deals are happening.” Cluj Startups’s founder Mircea Vadan said that Romanian IT industry is lacking seed and series A financing ranging from €50,000-€100,000 and €300,000-€500,000 in particular.
Currently in Romania, the overall venture capital investments equal to only 0.001% of GDP, compared 0.027% which is the EU average.
The Romanian government is taking baby steps in funding entrepreneurship accelerators and seed funds for innovative tech companies, but things are starting to move in this direction. Meanwhile, the Romanian tech market is indeed a heaven for IT investments from outside, making it a fertile environment for large IT companies or startups who need great talent while spending less than in western Europe.
As an IT recruitment company in Cluj-Napoca with 7+ years of experience, we can confirm that the trend is going in this direction. We’re currently assisting global companies build up their IT office in Cluj-Napoca. If you need help with acquiring Romanian talent for your IT company, let us know!