The venture capital landscape in Central and Eastern Europe (CEE) is witnessing a new chapter with the emergence of PurposeTech, a Prague-based pre-seed venture capital fund. Launched to back founders who are passionate about health, sustainability, and education, PurposeTech aims to address the notable funding gap in these sectors. While many startups in the region often lean towards B2B SaaS models, PurposeTech is carving out a niche for impact-driven initiatives. As the fund’s mission gains momentum, it is set to create substantial opportunities for startups with a purpose-driven focus.
PurposeTech, co-founded by Zdenek Fred Fous and Impact Hub, seeks to capitalize on the growing interest in purpose-driven entrepreneurship. This initiative contrasts with previous investment trends in the CEE region, which heavily favored B2B SaaS startups. Fous expressed a need for balanced support across various sectors, stating,
“More and more founders are motivated by a deep sense of purpose—they want to create a positive, lasting impact. Yet, despite this growing momentum, funding for HealthTech, GreenTech, and EdTech startups in the CEE region, particularly at the pre-seed stage, remains limited.”
PurposeTech’s Vision and Goals
PurposeTech targets early-stage startups with global ambitions in health, sustainability, and education. Since its inception in 2023, it has reviewed over 1,100 startups and made five initial investments. The fund, headquartered in Prague, covers seven CEE countries and plans further investments in the coming months. An oversubscribed initial fundraising round indicates strong market interest in PurposeTech’s goals.
Gabriela Gandel, a member of PurposeTech’s Advisory Board, emphasized the importance of investing in scalable solutions, stating,
“Investing in scalable, sustainable solutions is essential for creating a healthier, greener, and more resilient future. Over the past three years, our members have raised more than €360M, showcasing the incredible potential of purpose-driven innovation but also the pressing need for greater investment.”
What is PurposeTech’s Investment Process?
PurposeTech employs a structured four-step process for making investment decisions. Interested founders begin with a short application, followed by an introductory call. The fund then conducts a deep dive discussion phase before making a final decision after thorough due diligence. This detailed process ensures that investments align with PurposeTech’s mission of supporting purpose-driven startups.
In August 2024, PurposeTech participated in a €500K funding round for Tingit, showcasing its active involvement in nurturing emerging businesses. This action underscores PurposeTech’s commitment to backing startups that align with its vision of impactful innovation.
PurposeTech’s emergence is part of a broader shift towards supporting startups that prioritize social impact, addressing a need previously unmet in the CEE region. The fund’s operations reflect a concerted effort to leverage the Impact Hub Network’s reach, which extends to over 40 locations in Europe, further amplifying its influence.
As PurposeTech continues to expand its portfolio, it is poised to play a significant role in shaping the startup ecosystem in the CEE region. The focus on health, sustainability, and education aligns with global trends towards impact investment, potentially paving the way for new opportunities and collaborations. For founders, this represents a valuable platform to advance innovative ideas that contribute to a more sustainable and equitable future.
