2018 proved to be a record year for M&A dealmaking in the Baltics, with Technology, Media & Telecommunications (TMT) among the hottest sectors. Although global TMT sector trends show a cool-off by both deal count and deal value, nevertheless mid-2019 results in the Baltics and Belarus plus the pipeline ahead suggest that the fast pace of 2018 has continued into 2019. M&A activity in the TMT sector is expected to continue demonstrating the power of the tech business and to be one of the key drivers in the regional deal market.
Recent investments in Belarus-based tech companies demonstrate that tech startups remain on investors’ radar screens.
In Belarus, the High-Tech Park regime providing tax benefits, English law elements and simplified regulatory requirements envisages one of the key opportunities for startups. The regime is also gaining high popularity among foreign IT companies acquiring local development teams and opening R&D offices in Belarus. This year more than a hundred new companies have already joined High-Tech Park residents with the overall number now over five hundred. Regulatory benefits for mining, ICO and crypto businesses in the High-Tech Park allow Currency.com, a crypto exchange platform, to also join the list of High-Tech Park recent residents.
Although venture capital funds are still not very developed in Belarus, Haxus and Bulba Venture funds operated by well-known IT startup community members from Belarus continue developing their projects, such as Flo and OneSoil, in Belarus. Angel investors have also become quite active working with IT startups.
In Belarus, the 5G topic is becoming hot this year, especially with local 4G infrastructure provider BeCloud and mobile operator Velcom, part of A1 Telekom Austria Group. Additionally, a pilot project introducing 5G technology for driverless Belaz trucks was recently announced.
The draft Law on Personal Data passed its first reading in the Belarusian Parliament and may take effect after a transition period of one year from adoption. The new law may substantially change local rules and practices on personal data protection in Belarus and bring them closer to European GDPR standards. TMT businesses in Belarus should keep an eye on this process as preparations for implementation of new standards may take considerable time.