Article

Poland’s start-up potential

03.01.2025

Poland has become one of the most important startup markets in Central and Eastern Europe. Startups in our country attract attention not only because of their innovation, but also because of their ability to scale quickly. According to a December 2024 report by the Startup Poland Foundation, the Polish tech ecosystem offers significant growth potential and attractive conditions for foreign investors.

Polish startups are distinguished by their focus on modern technologies. As many as 28 percent of companies indicate AI, IoT or medtech technologies as key areas of their business. Innovations in Industry 4.0 and sustainable technologies such as greentech and HRtech are also popular. This technological diversity makes Poland a unique market for investors interested in the high-tech sector.

Structure and scale of Polish startups

The Polish startup market is dominated by small and medium-sized enterprises. According to the report, 31 percent of startups have between 4 and 10 employees, while only 4 percent have teams of more than 50 people. Almost every third startup has been on the market for 3 to 4 years. This structure reflects a distinctive stage of development, where flexibility in the organization of teams allows for rapid innovation.

In addition, most startups operate in organizational models adapted to intensive development. About 65 percent of them are registered as limited liability companies, which provides them with operational flexibility and the ability to quickly adapt to market changes. On the other hand, 8 per cent operate as a simple joint-stock company, which indicates a growing interest in solutions conducive to raising capital.

Polish startups usually start in small teams, which allows them to focus on testing new business models and rapid product iteration, i.e. the process of repeatable testing and refinement based on customer feedback and market analysis. This allows startups to dynamically adapt their solutions to market needs and minimize the risk of costly mistakes.

Business models adapted to global markets

Most Polish startups operate in the B2B model, which allows them to provide innovative technological solutions tailored to the specific needs of large and medium-sized companies. This model, chosen by 35 percent of startups, includes cooperation with corporations in areas such as SaaS, process automation or the development of supporting technologies Industry 4.0.

Another 21 percent of companies focus on serving smaller businesses, offering solutions that support their growth in competitive industries such as e-commerce, digital marketing, and logistics optimization. This market segment allows startups to build long-term business relationships and generate stable revenue.

B2C models and marketplaces, although less popular (17 per cent and 10 per cent, respectively), also play an important role in the Polish startup ecosystem. Examples include shopping platforms, mobile applications or fintech solutions, which are growing in popularity both at home and abroad.

Regional innovation hubs

The startup ecosystem in Poland is growing in many regions, each with its own unique specializations and strengths.

1. Mazowieckie (22 percent): As the largest startup centre in Poland, Warsaw stands out for its access to a wide network of investors, corporations, and institutions supporting innovation, such as venture capital funds and business incubators. The capital also offers a strong academic base with universities that provide qualified professionals to work in startups.
2. Lower Silesia (20 percent): Called the “Polish Silicon Valley,” Wroclaw is known for its high concentration of technology companies and proximity to international R&D centres. The city regularly organizes technological events that foster the exchange of knowledge and business networking.
3. Lubelskie (9 percent): This region is rapidly gaining in importance thanks to the support of European funds and growing initiatives to support startups. Lublin focuses on sectors such as agritech and biotechnology, using local resources and academic potential.
4. Małopolskie and Podkarpackie: Although these regions do not dominate in numbers, they play an important role in selected sectors. Krakow focuses on artificial intelligence and data analysis, while Rzeszow is known for its innovations in aviation and aerospace, supported by the Aviation Valley.

Growth despite challenges

The year 2024 brought an increase in investments in the Polish startup sector by 14 percent compared to the previous year, reaching PLN 1.57 billion. Despite these successes, 56 percent of startups indicate difficulties in obtaining financing.

Polish startups are focusing on foreign expansion, which is confirmed by the data from the report of the Startup Poland Foundation. As many as 91 per cent of companies plan to develop in Europe, where Germany is the most frequently chosen destination (37 percent). Startups see this market as an opportunity to access advanced infrastructure, numerous business partners and a stable legal environment.

The American market, which attracts 60 percent of Polish startups, is equally popular. The United States offers not only access to the largest technology market in the world, but also the opportunity to attract international investors and participate in advanced startup ecosystems.

It is also worth noting the growing interest in Asian markets. Nearly 30 percent of companies are considering expansion to Asia, appreciating the potential of consumers and access to modern technologies. This is proof of the growing ambitions of Polish startups on a global scale.

Human resources and labour costs

Rising employment costs and limited availability of qualified specialists are some of the biggest challenges faced by Polish startups. According to the report, as many as 50 percent of companies report difficulties related to labour costs, which is due to the growing competition for talent both on the domestic and international market. In addition, 18 percent of startups indicate a shortage of qualified staff as a significant barrier to development.

The situation is further complicated by the fact that global corporations are increasingly opening their research and development (R&D) centres in Poland, which further increases competition for the best specialists. Startups must compete not only in terms of salary, but also organizational culture, professional development opportunities and flexible forms of employment.

However, the Polish labour market also offers a number of opportunities. The high quality of technical education in Poland ensures the inflow of young, talented employees, especially in areas such as computer science, engineering and data analysis. Poland also ranks high in international programming skills rankings, making the country an attractive source of tech talent for investors. Support programs and local incubators and accelerators help startups recruit and develop employees through access to networks and training workshops. Also, the rise of remote work opens up opportunities to attract talent from outside of traditional innovation hubs, which can help startups optimize costs.

Source: Startup Poland, Polskie Startupy 2024