Czech Startup Market Sees Investor Outflow as Slow Exits and Weak Investment Environment Stall Growt

Investor Sentiment and Activity

• One third of existing investors (33%) plan to reduce or stop investing in 2026.

• The share of first-time startup investors has fallen from 35% to 14% over the past two years. The sharpest decline has occurred among angel investors, where the number of newcomers has dropped by 78% since 2022.

• For 52% of investors, the biggest barrier remains the lack of high-quality startup opportunities. This is followed by low market liquidity and a limited number of exits (45%). Only 4% of investors cite lack of capital as a problem.

• Nearly 57% of potential investors would be willing to invest in startups if they had greater awareness of the startup ecosystem.

• There is strong consensus regarding tax incentives: 76% of startup investors and 79% of non-startup investors would welcome tax breaks for startup investments.

• Czech investors are increasingly shifting their attention and capital abroad. Interest in investing exclusively in Czech startups has dropped by more than half – from 31% in 2022 to 12.5% in 2025. The most common focus is now the Central and Eastern European (CEE) region, where 43% of respondents invest.

• AI remains the most attractive technology for investors (83%), while blockchain continues to decline after peaking in 2021 (25%).

• Among sectors, defence tech and dual-use (39%) and space technologies (27%) are gaining momentum. At the same time, SaaS (Software as a Service) remains strong, with 52% of investors focusing on this segment.

Data was collected in January and February 2026 through an online survey. The analysis includes 172 responses, of which 105 came from startup investors and 67 from respondents who do not invest in startups.

Partners of the survey include the Czech Startup Association, business and investment development agency CzechInvest, technology-focused law firm NOVALIA, consulting firm Deloitte, and the data startup Lakmoos AI.

Investment Appetite in Decline: Slow Exits and Fewer New Investors 

While the Czech venture capital market is gradually maturing, the inflow of new investors is slowing significantly. Their share has declined each year – from 35% in 2023 to the current 14%. The steepest relative decline occurred among angel investors, whose share dropped from 13% in 2022 to 3% in 2025.

Another signal of shifting sentiment is that nearly one fifth (19%) of all current investors do not plan to invest at all this year. In 2024, only 4% of investors expressed this view; this year the figure is almost five times higher.

A widening gap is also emerging in investment appetite and expectations across investor groups. Professional investors – General Partners of VC funds – remain optimistic, with 41% planning to increase their investments this year. Private investors, however, are more cautious and largely adopting a wait-and-see approach.

More than half (51%) of Limited Partners (LPs) who invest in VC funds plan to reduce or completely halt their investment activity. This suggests that the current investor base cannot sustain the ecosystem’s growth on its own under current conditions.

The core problem of the Czech startup market is not a lack of capital, but rather the overall dynamics of the ecosystem itself. Investors point mainly to the limited number of high-quality startup opportunities and low market liquidity. Slower exits mean that capital remains tied up in older investments, preventing the kind of capital recycling that would allow funds to be reinvested.

“The survey data dispel the myth that there is a shortage of capital in the market. Many investors are waiting for returns from their existing portfolios, while the number of new investors entering the market remains far below what would be needed to sustain future growth,” says Eliška Vámošová, author of the survey and Marketing Director at DEPO Ventures.

Unlocking Capital: Community, Education, and Tax Incentives

The survey also shows that a significant pool of untapped capital exists in the Czech Republic among investors who currently focus on other asset classes. More than half of them (57%) stated in the survey that they would invest in startups if they had more information and support. This is therefore not a matter of lack of interest – only 6% of respondents say they are not interested in startup investing.

The main barrier is access: 42% of these investors admit they simply do not know how to get started with startup investing.

Potential investors would also welcome stronger support in navigating the startup investment landscape: more than half (52%) would appreciate help identifying high-quality startups, 36% would value opportunities to co-invest, and 31% point to tax incentives.

These findings suggest that the first step toward unlocking new capital is greater emphasis on education and improving access to the investment environment – whether through educational programs, community meetups, or ecosystem events such as Czech Startup Week or the Engaged Investments conference.

Awareness alone, however, is not enough. The legislative environment also plays a critical role, and Czech investors currently rate it a ‘3’, equivalent to a ‘C’ on the school grading scale – indicating a certain level of stability but also considerable room for improvement.

In addition to the absence of tax incentives for startup investors, the Czech environment is also constrained by barriers to deploying pension fund capital and by the complex administration of employee stock ownership plans (ESOPs).

“The Czech startup investment ecosystem is at a crossroads. We’re seeing the lowest inflow of first-time investors on record, and nearly one-fifth of existing investors don’t plan to be active in 2026. At the same time, more than three quarters of respondents support introducing tax incentives for startup investors and pension funds. That’s a strong mandate for change. The future of Czechia lies in innovation. If we want Czech ambition to translate into real economic value, we must create a competitive environment that motivates investors and capital,” says Jiří Vicherek, Chairman of the Czech Startup Association.

Tax policy is one of the few areas where startup and non-startup investors strongly agree. Tax incentives would motivate 76% of startup investors and 79% of non-startup investors to invest in startups. The identical level of support across both groups suggests that tax incentives could play a dual role: retaining existing investors while attracting new ones.

At the same time, 75% of startup investors support systemic incentives that would enable pension funds to invest in VC or private equity funds. Even allocating a small portion of pension fund capital to startup technologies could significantly transform the Czech investment landscape.

Czech Investors Are Looking Beyond the Domestic Market

The ongoing shift is not limited to technology trends – it also applies to the geography of investments. While more than a quarter of investors previously focused exclusively on the domestic market, their share has now dropped by half year-on-year to just 12.5%. Capital from active investors is increasingly flowing beyond the country’s borders, into the broader Central and Eastern European region, which 43% of investors now target.

A stronger European focus is also reflected in growing interest in sectors and technologies that support European resilience and strategic sovereignty. Defence technologies and dual-use solutions have newly emerged among the leading sectors, attracting 39% of investors. Technologically demanding deep-tech and hard-tech sectors are also gaining prominence, including those focused on space technologies (27%).

AI remains the dominant investment theme, with 83% of investors currently focusing on the sector. By contrast, blockchain – once among the most sought-after technologies – continues to decline in popularity, now attracting only about one quarter of investors amid a broader slowdown in the field.

“The Czech venture capital market is maturing, and investors are starting to think more strategically. Artificial intelligence, defence technologies, and space tech are no longer just buzzwords – they’re sectors where the next generation of European technology leaders is emerging. What is really holding us back is the limited supply of high-quality opportunities and insufficient support for startup investing. These are challenges that can be addressed, and we are actively working on them,” concludes Petr Šíma, General Partner at DEPO Ventures and Board Member of the Czech Startup Association.