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Startup investments in the Czech Republic are declining. The number of new startups is the lowest in recent years and the market is hampered by low liquidity

12.03. 2026
line-arrow Startup investments in the Czech Republic are declining. The number of new startups is the lowest in recent years and the market is hampered by low liquidity

The Czech startup ecosystem is facing its limits. According to the latest survey among investors, conducted by the investment company DEPO Ventures in cooperation with the Czech Startup Association, the CzechInvest agency and other partners, the share of new investors has dropped significantly and a third of existing investors plan to limit or completely discontinue their investment activity this year. Investors cite low market liquidity, lack of quality startup opportunities and weak investment infrastructure as the main barriers.

Although the Czech venture capital market is gradually maturing, the arrival of new investors is slowing down significantly. Their share is decreasing every year, from 35% in 2023 to 14% today. The biggest proportional drop is among angel investors, from 13% in 2022 to 3% in 2025. Another signal of the changing market sentiment is the fact that almost a fifth (19%) of all current investors do not plan to invest at all this year. While only 4% of investors thought this way in 2024, this year the figure is almost five times higher.

Moreover, a gap in investment appetite and expectations is opening up in the market. While professional investors, i.e. general partners of VC funds, are optimistic and 41% of them plan to increase their investments this year, private investors are more cautious and take a wait-and-see stance. A majority (51%) of limited partners (LPs) who invest in VC funds plan to reduce or completely stop their investment activities. This shows that existing investors simply cannot sustain the growth of the ecosystem in the current set-up in the long term.

“Strong startup ecosystems are built on a broad base of business angels. They are the ones who help startups overcome the valley of death and bring capital, know-how, experience and key contacts. In the Czech Republic, however, there is still no systematic support for these investors and there is a gap in pre-seed and venture funding. At the same time, the number of initial investors is declining and the investment appetite is weakening, which is reflected in a lower number of newly emerging startups. The Startup Act and other upcoming measures are intended to reverse this trend – to simplify investing, increase liquidity and open up space for new investors,” comments Markéta Přenosilová, Director of the Startups and Venture Investments Division at CzechInvest.

The main problem of the Czech startup market is not the lack of capital, but rather the dynamics of the whole ecosystem. Investors point mainly to the limited number of quality startup opportunities and low market liquidity. Slower exits mean that capital remains tied up in older investments and there is a lack of so-called dilution, which would allow money to be reinvested. “The survey data explodes the myth of a lack of capital in the market. Many investors are waiting for their existing portfolios to appreciate, while there are far fewer new investors than would be needed for further market development,” says Eliška Vámošová, author of the survey and marketing director of DEPO Ventures.

The way is through community, education and tax incentives

The survey also shows that there is significant untapped capital for investment in startups in the Czech Republic. It is represented by investors who focus on other investment assets. More than half of them (57%) said in the survey that they would invest in startups if they had more information and support. This is not a lack of interest – only 6% of respondents reported this. Rather, the main barrier is poorer accessibility: 42% of these investors admit that they simply do not know how to get started in startup investing.

Potential investors would also welcome more support in navigating the market: more than half (52%) would appreciate help identifying quality startups, 36% would appreciate the opportunity to co-invest and 31% would appreciate tax benefits.

It follows that the first step to unlocking new capital is a greater emphasis on education and making the investment environment more accessible. Whether through educational programs, community gatherings or professional ecosystem events such as the annual Czech Startup Week or the Engaged Investments conference.

But education alone is not enough. The legislative environment also plays a crucial role, which Czech investors rate with a C according to school grades. This signals a certain degree of stability, but also considerable room for improvement. In addition to the lack of tax incentives for startup investors, the Czech environment is also hampered by barriers to the involvement of capital from pension funds or the complex administration of employee stock ownership plans (ESOPs) . We are seeing the lowest ever entry of new investors and almost a fifth of existing investors do not plan to be active in 2026. At the same time, more than three-quarters of respondents support the introduction of tax incentives for startup investors and pension funds. This is a clear mandate for change. The future of the Czech Republic lies in innovation – if we want Czech ambitions to raise the value of our economy, we need to create a competitive environment that motivates investors and capital,” appeals 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 benefits would motivate 76% of startup investors and 79% of non-startup investors to invest in startups. The consistent level of support across both groups suggests that tax incentives could play a dual role: retaining existing investors while activating new ones. At the same time, a majority of startup investors (75%) would support systemic incentives for pension funds to invest in VC or PE (private equity) funds. Releasing even a small part of pension funds’ capital into startup technologies could fundamentally transform the Czech investment environment.

Investors are shifting their attention beyond the Czech Republic

The broadening of horizons is not only about technological trends, but also about the investment map itself. While more than a quarter of investors used to target the domestic market exclusively, their share has fallen by half year-on-year, to just 12.5%. The capital of active investors is thus increasingly crossing borders and heading to the wider CEE region, which is currently the focus of 43% of them.

A stronger focus on Europe is also reflected in a greater interest in sectors and technologies that support European resilience and sovereignty. The main drivers are now defence and dual-use technologies, which are of interest to 39% of investors. More technology-intensive deep-tech and hard-tech projects, such as those focusing on space (27%), are also coming to the fore.

The strongest investment theme remains artificial intelligence, which is currently the focus of the vast majority of investors (83%). On the other hand, blockchain, which was one of the most sought-after technologies until recently, is experiencing a further decline in interest – it attracts only a quarter of investors, thus contributing to the general decline in this area.

“The Czech venture capital market is maturing and investors are starting to think strategically. Artificial intelligence, defence technologies or space – these are no longer just buzz words, but sectors where future European leaders are being born. What is really holding us back is more a lack of quality opportunities and weak support for startup investment. This is a call that can be addressed and we are actively working on it,” concludes Petr Šíma , General Partner of DEPO Ventures and member of the Board of Directors of the Czech Startup Association.

Data collection was conducted in January and February 2026 in the form of an online questionnaire. 172 responses were included in the analysis, of which 105 were from startup investors and 67 from respondents who do not invest in startups. The survey partners are the Czech Startup Association, the state agency for promoting entrepreneurship and investment CzechInvest, the consulting company Deloitte, the technology-focused law firm Novalia and the data startup Lakmoos AI.

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