Investments in Romania’s software industry almost equally split between local and foreign players

Anca Alexe 08/11/2019 | 12:43

Romania’s software industry remains key for the country’s economy, with a volume of approximately EUR 6.2 billion in 2019, according to estimates by KeysFin specialists, and is also one of the most balanced industries in terms of the shares of foreign and Romanian capital.

Foreign investors control 53 percent of the positive equity of software companies in Romania, while the share of local investments saw an annual advance of about 5 percentage points, reaching 47 percent in 2018, according to the study “Software industry in Romania” conducted by KeysFin.

Foreign investors on the local software market come from over 60 countries, but Germany (10.7 percent), Luxembourg (7.3 percent), the Netherlands (7.2 percent), the UK (5.5 percent), and Cyprus (4.8 percent) are at the top, together controlling two thirds of the total foreign equity.

As far as local investors are concerned, they come both from the big cities in the country, such as Bucharest or Cluj, as well as from mid-sized cities, which are starting to become resonant names for the local software startup industry, such as Targu-Mures, according to the study.

“It is the third consecutive year when we carry out a study dedicated to the software industry in Romania, so we have a broad perspective on the market and we are connected to its trends. This is why increasing local investments by 5 percent in a single year in such a competitive market makes us look forward to the future of Romanian software: our country is beginning to become a regional hub not only for outsourcing, but also for successful startups. Software is one of the few industries in Romania where there is a balance between local and foreign investments, which reflects a healthy and solid development in this field,” said Roxana Popescu, Managing Director of KeysFin.

The turnover of software developers in Romania increased by 12.6 percent compared to 2017 and by 51.6 percent compared to 2014, to EUR 5.7 billion in 2018.

Moreover, analysing the market data and also taking into account the industry’s fluctuations, KeysFin experts estimate a 10.4 percent advance in the turnover of software companies in Romania for the current year, exceeding the threshold of EUR 6.2 billion in 2019.

An important and visible part of the entire software industry is the computer games market. The country has development and tested of some of the most popular games in the world, and these results are also seen at the business level: the turnover of the game publishers increased by 9 percent compared to 2017 and by 46 percent compared to 2014. For 2019, KeysFin experts forecast an advance of over 13 percent, to over EUR 255 million.


In 2018 in Romania, there were about 20,700 companies in the software field, 18.6 percent more than in 2017 and 30 percent more compared to 2014. The highest turnover share was generated by mid-sized companies (39 percent of the total). However, over 4,800 companies (23 percent) had zero turnover in 2018.

According to KeysFin specialists, the largest software company in Romania remains Oracle, with a turnover of over EUR 206 million (3.6 percent of the total) in 2018. The ranking is completed by IBM Romania (EUR 200 million euros, 3.5 percent), Ericsson Telecommunications Romania (over EUR 170 million euros, 3 percent), SAP Romania (approximately EUR 108 million) and Endava Romania (approximately EUR 108 million). It is worth noting the entry of SAP in the top 5, with the highest percentage increase of 63 percent. KeysFin also estimates that Bitdefender remained fourth biggest company by turnover in 2018, but notes that its financial results for the year were not yet available at the time of the data collection.

As for the top game publishers, the first place by turnover of 2018 was taken by Electronic Arts Romania, which marked several records: it was the largest employer and the most profitable player in 2018 (EUR 38 million turnover, 79 percent of the total), followed by King Games Studio (EUR 2.4 million, 4.9 percent) and Green Horse Games (EUR 11 million, 2.2 percent).


The software industry in Romania consolidates its position among the most successful sectors of the national economy. Of the 20,700 analysed companies, 13,200 (64 percent) registered a profit, 5,600 (27 percent) had losses, while the others had a null result in 2018, according to KeysFin.

SAP Romania remains one of the most profitable players in the field, having managed to double its net profit in 2018 to over EUR 40 million. The profit of IBM Romania, the second most profitable player, has increased by 31 percent in the last year.

The five most profitable companies in 2018 had a cumulative net profit of over EUR 86 million – almost 14 percent of the total.


According to the latest opinion polls, 77 percent of Romanians believe that the IT sector as a whole has the highest prospects for the future.

In this context, the number of those who are preparing for a career in the field has also increased significantly, and this is seen at the level of actual employment. The average number of employees in the local software industry increased by 2.9 percent compared to 2017 and by 40 percent compared to 2014, to over 110,000 employees in 2018. However, it seems that educational institutions in Romania cannot cover companies’ needs in this sector, which amount to about 15,500 specialists.

Therefore, due to the massive demand of the workforce in the software industry, the average cost per employee has increased by 54 percent, compared to an advance of only 8 percent of the average productivity per employee during the period 2014-2018. KeysFin specialists point out that the advance of the average cost per employee over that of productivity represents a significant risk in the medium term, with a direct impact on the competitiveness of the local economy.

On the other hand, the experts noted that the largest concentration of workforce was in mid-sized companies, with 43 percent of the total, followed by small companies with 21 percent. However, over half of the local software companies, respectively 10,400 companies, had no employees in 2018.


Although there has been a slight decrease in the turnover of the companies present here, Bucharest remains the main hub for the software industry in Romania, with a result of over EUR 3.3 billion or 58 percent of the total in 2018.

In second place by turnover is Cluj County (16 percent), which registered an advance of 1.5 percentage points compared to 2017, followed by Timis (5 percent), Iasi (4.5 percent) and Brasov (3 percent).


Although Romania is the second largest provider of software and services in Eastern Europe and in the top 10 at the European level, the industry is mainly based on export and outsourcing, which contributes an overwhelming percentage to the value of the entire sector.

However, in recent years, important progress has been made to support local software startups, due to the emergence of international investment funds, mentoring programs and competitions.

Startups like Elrond, Esta, TypingDNA or Happy Recruiter have already raised tens of millions of euros from investors and are developing products or services for countries around the world.

Another successful local example is Starbyte SRL, a software solution adapted to the areas where the largest investments are concentrated today, such as financial-banking, insurance and risk management.

“The accelerated trend of digitalisation is found in almost all areas, but especially in the financial sector, as banks are increasingly trying to attract their customers directly online, so the battle is no longer just about costs, but also on a faster response time, with as little documentation as possible, but with as much attention to risks, by remotely checking clients. Another increasingly common trend is the automation of processes and aggregation of information, as well as that of open banking, which will reach new heights in the software industry. These trends can have a positive impact on the Romanian software industry, especially on local entrepreneurs, provided they are still creative, pay attention to the needs of the market and to integrating as much of the new technologies as possible into their products,” said Adrian Bacaianu, the General Manager of Starbyte.

In 2019, a record amount of EUR 1 billion was invested in startups in Central and Eastern Europe, which led to the acceleration of innovation and the creation of a growing digital business ecosystem.


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