BR/03/2018

RESIDENTIAL MARKET GRAPPLING WITH INSUFFICIENT STOCK

April, 2018 / Volume 22, Issue 3

www.business-review.eu

6

LOCAL EXPORTERS FEEL THE PRESSURE OVER EU-US TRADE SCUFFLE

18

THE ARCHITECT SHAPING THE LOCAL RETAIL INDUSTRY

20

LOCAL LENDERS CUT THE CASH AND DEVELOP DIGITAL

26

www.business-review.eu Business Review | April 2018

EDITORIAL 3 REAL ESTATE

• Editorial •

Anda Sebesi • Deputy Editor-in-Chief •

6 Residential market grappling with insufficient stock, price and financing pressure

COVER STORY

We can do it!

In March, Robotic Process Automation (RPA) software provider UiPath was valued at USD 1 billion, thereby achieving “unicorn status”. Impressively, UiPath is Romania’s first USD 1 billion tech start-up, and only five years ago, the company considered shutting

8 Romanian start-up UiPath achieves unicorn status TWENTY YEARS IN REVIEW

it down.

Having emerged from Bucharest as leader of a market that is only now taking shape at a global level, Romania’s first unicorn is part of an extremely select group. The company has managed to develop from a small software outsourcing company, DeskOver, which built automation libraries and software development kits for companies such as IBM, Google and Microsoft, which embedded them in their own products.

According to TechCrunch, there are currently 279 private VCbacked start-ups valued at over USD 1 billion. Last year, only 60 new start-ups joined the exclusive unicorn club. Europe currently boasts 31 unicorns, with the UK contributing last year with four and Switzerland with one.

34 Having a moment…20 years in the making

35 ‘The 90s: economic growth powered by lawlessness’- CEC president

38 Pegas: born communist, rebuilt capitalist

CITY

And now UiPath has joined this exalted group. It serves as confirmation that Romania can produce top performers, regardless of the field of activity. More importantly, local businesses have the potential to play in the big league with the largest international companies.

“Uipath is a series of all possible mistakes that one entrepreneur can make,” company CEO Daniel Dines told Business Review. The lesson? Entrepreneurs are allowed to make mistakes, learn from them and move forward in an attempt to improve and become the best. They can do it! We can do it!

42 Casting a wide net: Romanian actors dream on

44 Snow joke as Facebook data scandal reaches Romania

45 Film review 46 Cultural calendar

FOUNDING EDITOR: Bill Avery, EDITOR-IN-CHIEF: Ioana Erdei, DEPUTY EDITORS-IN-CHIEF: Sorin Melenciuc, Ovidiu Posirca, Anda Sebesi JOURNALISTS: Anca Alexe, Georgiana Bendre, Georgeta Gheorghe, Romanita Oprea, Oana Vasiliu COPY EDITOR: Debbie Stowe, PHOTO EDITOR: Mihai Constantineanu, ART DIRECTOR: Raluca Piscu PUBLISHER: Bloc-Notes Media Network, ADDRESS: No. 10 Italiana St., 2nd floor, ap. 3, Bucharest, Romania­­­­, LANDLINE: Office: 031.040.09.31 EXECUTIVE DIRECTOR: George Moise, BUSINESS DEVELOPMENT DIRECTOR: Oana Molodoi, SALES DIRECTOR: Ana-Maria Nedelcu, SALES MANAGER: Alexandra Rosca, EVENTS MANAGER: Mara Dragoiu, Alina Moldovan, MARKETING: Eugenia Pupeza PRODUCTION: Dan Mitroi, DISTRI­­BUTION: Eugen Musat EMAILS: editorial@business-review.ro, sales@business-review.ro, events@business-review.ro­

Publicație auditată pe perioada Apr 2015 - Mar 2016

ISSN NO. 1453-729X

www.business-review.eu Business Review | April 2018

4 NEWS

WHO’S NEWS

Photo: Dreamstime

BR welcomes information for Who’s News.

Submissions may be edited fo­­­r length and clarity.

Get in touch at georgiana.bendre@business-review.ro

Aurelia Costache is the new head of EY Romania’s business assistance department, after coordinating the company’s consultancy division for the financial services industry for three years. In the last two years, she has also been involved in setting up EY’s global excellence centers for RPA (Robotic Process Automation) automatization. Costache has over 20 years’ experience as a consultant in the banking and telecom field. She has an EMBA from Ecole Nationale des Ponts et Chaussees Paris and a post-graduate diploma in International Business from Edinburgh University.

The hospital should be built in three years, according to the municipality

Plan for Metropolitan Hospital hit by deadline scandal

provider MedLife, told BR that

By Anca Alexe

too long, and one too short.

Hall are unreasonable – one is “For hospitals in the private

the City Hall issued a statement

the Bucharest Metropolitan

contradicting the Emergency

sector, the authorization phase

Hospital is 20 years from now

Ordinance text, claiming that it

alone usually takes at least two

at the latest, according to

was only a technical specification

years. If the City Hall makes an

Nelu Barbu, the government

and a “bureaucratic measure to

exception for its own hospital,

spokesperson, citing the Emer-

support the land transfer from

it would mean that they are

gency Ordinance approving the

the government to the City Hall”.

mocking the private sector,

transfer of a land plot in north

The mayor of Bucharest,

Bucharest from state owner-

Gabriela Firea, claims that the

ship to the City Hall.

municipality aims to build the

and I’m sure that won’t be the case,” Marcu said.

Professional preparation

hospital in a “decent, reasonable”

is required in order to finish

designated for the construction

timeframe, currently estimated

projects in Romania, whether

of the Metropolitan Hospital is

at three years from the beginning

it’s hospitals, motorways or

situated on Pipera Road in Dis-

of construction.

energy projects, according to

The 47,000 sqm of land

government’s announcement,

page 5

the government and the City

The construction deadline for

trict 2 of the capital. After the

Bogdan Pelinescu has been appointed general director for Central Europe

by Luxoft. He will manage the company’s development plans at European level, replacing Wojciech Mach. Pelinescu has been general director of Luxoft Romania since 2011 and has over 20 years’ experience in the IT industry, half of which in various leadership roles. In the seven years that Pelinescu has coordinated the activities of the Romanian center, the number of employees has tripled.

the timeframes given by both

Mihai Marcu, board president of private healthcare services

Vlad Voiculescu, the former minister of healthcare.

German Sennheiser to open plant in Brasov

By Georgeta Gheorghe Audio company Sennheiser has

By investing in the new facto-

chosen Brasov in which to open

ry, Sennheiser aims to strengthen

its fourth factory, joining facili-

its position on the European

ties in Germany, Ireland and

electronic products market. “For

the US. The new production

many years, EMEA (Europe,

base will provide the German

Middle East and Africa) has been

firm with the flexibility to cover

the region that has brought us

market demand, officials said.

the biggest increases. With the

The Brasov factory is sched-

new factory in Romania, we have

uled to be completed by the

a third European production base

end of the year and will focus

and, at the same time, we expand

initially on building electronics

our distribution network in Eu-

for personal use.

rope,” said company officials.

This is the fourth plant of the manufacturer

www.business-review.eu Business Review | April 2018

NEWS 5

Photo: Dreamstime

(251 work permits), Turkey (234), Nepal (101), China (92), Serbia (78), Moldova (58), Morocco (56), the Philippines (48), Bangladesh (30), Brazil (23) and other countries (202).

Official data show the total number of work permits for foreign employees issued by Romanian authorities and still in use was 7,249 on March 1, 2018, up from 6,709 in December 2017 and 5,594 at the end

The total number of work permits for foreign employees still in use at 7,249 this spring

Foreign worker employment at record high

of 2016.

The statistics don’t include EU citizens, who don’t need a permit to work in Romania.

China and Turkey are by far the two leading countries by origin of migrant workers in

Christina Verchere will take over as president of the directorate and general executive director (CEO) of OMV Petrom on May 1, replacing Mariana Gheorghe.

Verchere started her career in 1993, after studying Economics at Aberdeen University in Scotland, and has worked at one of the largest oil and gas companies, where she had several management positions, in the UK, US and Canada. Since 2014, she had been regional president for Asia Pacific, in Jakarta, Indonesia, for British Petroleum.

Romania, with 1,473 and 1,332

By Sorin Melenciuc

work permits, respectively.

But the real number of

During the first two months of

foreign workers’ origin. These

the year, Romania issued work

figures show the record demand

foreign workers in Romania is

permits for 1,174 foreign em-

for foreign employees in Roma-

much higher, due to unofficial

ployees who came mainly from

nia, where businesses are strug-

work.

Vietnam, Turkey, Nepal, China

gling with workforce shortages

“In 2017, police officers of

and Serbia, according to data

in sectors such as construction,

the General Inspectorate for

from the General Inspectorate

HORECA and logistics.

Immigration carried out 994

for Immigration submitted to Business Review.

Between January 1 and March

actions and controls in the fight

1, the General Inspectorate for

against illegal work, at 1,559

Immigration, a branch of the

companies, which resulted in

Bangladesh and Brazil also

Ministry of Internal Affairs, is-

the detection of 515 foreigners

entered the Romanian statistics

sued 1,174 new work permits for

working illegally,” Inspectorate

for the top 10 countries of

foreign employees from Vietnam

officials told Business Review.

For the first time, Morocco,

Dan Sandu has been appointed CEO of Intesa Sanpaolo Bank. Sandu will succeed Marco Capellini.

Sandu has over 25 years of experience in banking and capital markets, giving him solid knowledge of the Romanian banking sector. He began his career at BNR as chief dealer and director of the international reserves management and market operations division.

Jovan Radosavljevic has been appointed general director of Coca-Cola HBC Romania, effective May 1. Currently, he leads the operations of Pivara Skopje. Radosavljevic started his career at Coca-Cola HBC more than 16 years ago in the sales team in Serbia. From 1998, he held several positions within the company, until 2009, when he became sales director of Coca-Cola HBC Serbia.

Photo: Dreamstime

www.business-review.eu Business Review | April 2018

6 REAL ESTATE

Residential market grappling with insufficient stock, price and financing pressure Developers have accelerated their housing investment, with residential projects worth over EUR 750 million in various stages in Romania. Analysts say that there is still significant demand in the sector, which is helped by the availability of cheap financing and growth of wages across industries.

By Ovidiu Posirca Imobiliare.ro. Meanwhile, analysts are talking about an adjustment price risk for the housing market, although new investments are still below demand.

The number of built homes stood at 53,000 in 2017, up only 2 percent compared to 2016, according to Dorel Nita, coordinator of Analize Imobiliare, part of Imobiliare.ro. “Still, too little is being built. There is a desperate need to build more,” said Nita, adding that the number of delivered units in the BucharestPhoto: Dreamstime

Ilfov area stood at 10,000.

Price trends on the residential market in Romania have been strongly dependent on what has been happening on the housing sec-

I

Development drive: 14,000 homes are under development in the Romanian capital and its surroundings

tor in the Euro zone since 2013, according to Andrei Radulescu, director of macroeconomic analysis at Banca Transilvania. “If residen-

n the banking sector, which covers 90

deliveries will target the mass market – which

tial prices in the Euro zone market start the

percent of all financing in Romania, the

can also cover FTBs. But the stock of mid-

adjustment process, this will be felt immedi-

emergence of controversial draft bills

market homes surged from 17 percent of

ately in Romania,” said the economist.

might force banks to toughen their lending

completed buildings in 2015 to 46 percent this

policies, which could mean bad news for indi-

year in Bucharest and the surrounding areas,

viduals looking to take out a mortgage.

according to data from Coldwell Banker Ro-

COST OF FINANCING REMAINS LOW FOR NOW

mania. The agency states that 14,000 homes

Radulescu of BT says that real financing

Prima Casa, will remain the main growth

The program for first-time buyers (FTBs),

are under development in the Romanian

costs continue to be “very low”. “If we adjust

engine for the market, with 22,000 potential

capital and its surroundings in 2018.

interest rates for inflation, we see that real

mortgages that could be granted this year,

Residential property prices were up by 6.2

financing costs are still extremely low domes-

according to Coldwell Banker Romania, the

percent at the end of the third quarter of 2017

tically and will continue to be like this at least

real estate consultancy. The 5 percent down

compared to the same period of 2016. This

through to autumn,” said Radulescu.

payment and partial state guarantee for loans

year, analysts expect prices to continue their

have attracted buyers in droves. Up to now,

growth but at a more moderate pace.

banks have issued over 225,000 mortgages of

“The evolution (of property prices – e.n.)

Meanwhile, MPs are debating several draft bills that might limit the availability of new bank loans for individuals, according to Florin

this kind. This year the volume of loans for

in Romania is not as dynamic as other coun-

Danescu, head of the Romanian Association

which guarantees will be granted has been cut

tries in the region such as the Czech Republic

of Banks (ARB). The most contentious is one

for the first time to RON 2 billion. The average

and Hungary, where prices grew by more than

that aims to cap interest rates on loans and

loan granted to FTBs stands at EUR 40,000.

10 percent,” said Florin Dragu, head of the

penalties. Danescu suggested that Roma-

department for the monitoring of systemic

nians’ access to bank loans might be limited

MORE MID-MARKET PROJECTS IN BUCHAREST

risks at the National Bank of Romania (BNR),

as lenders could decide to grant loans only

during a conference organized by the associa-

to customers that pose the lowest risk of

In Bucharest, 51.5 percent of new housing

tion of property evaluators, ANEVAR, and

defaulting.

8 COVER STORY

www.business-review.eu Business Review | April 2018

www.business-review.eu Business Review | April 2018

COVER STORY 9

ROMANIAN START-UP

UIPATH

ACHIEVES UNICORN STATUS In March, Robotic Process Automation (RPA) software provider UiPath was valued at USD 1 billion, a rare enough event for the company to be dubbed a ‘unicorn’.

But the road to success has been far from straightforward. Having strayed from the path a number of times, it faced closure, before emerging as the leader of the global RPA market, proof that in UiPath’s case, success lies not so much in the recipe, but in the ingredients.

By Georgeta Gheorghe

10 COVER STORY

www.business-review.eu Business Review | April 2018

A

AN EXCEPTION TO NEARLY EVERY RULE

mirror. In this particular case,

tech start-up had its origins in

due to the speed with which

a software outsourcing com-

UiPath has moved in the past

pany founded by UiPath’s CEO

two years, one mere glance is

Daniel Dines and Marius Tirca,

bound to give anyone motion

its CTO, in 2005. Located in a

sickness. On 6 March, UiPath,

flat in Delea Veche, DeskOver

which is headquartered in New

built automation libraries and

York but has kept its software

software development kits

development in Bucharest,

for companies such as IBM,

received a USD 153 million

Google and Microsoft, which

investment in the form of a

embedded them in their own

Series B funding, pushing its

products. But it wasn’t until

valuation above USD 1.1 billion.

2012 that the team, which

The move came after a year of

numbered 10 people, realized

record growth, during which

the market fit with RPA and

UiPath was named leader of

started putting its resources

the RPA market by Forrester,

into building a platform for

scoring highest when assessed

training and orchestrating soft-

for its technology. 2017 also saw

ware robots. While that may

the firm’s enterprise customer

seem like a natural progres-

base grow from fewer than 100

sion, for the start-up and its

customers to more than 700,

product, today’s most widely

s the saying goes, everything looks clear in the rear view

Romania’s first USD 1 billion

pushing the company’s annual recurring revenue up by a staggering 690 percent.

To sustain the growth, last year the start-up embarked on a mas-

adopted RPA platform in the world, that time could have spelled a dead end.

“During that period, we failed multiple times. Uipath is a series of

sive expansion of its global presence, doubling its workforce to over

all possible mistakes that one entrepreneur can make,” says Daniel

500 professionals and opening offices in ten countries. Among them,

Dines in a candid interview in Bucharest, after making the global

the Japanese chapter, UiPath K.K., the first office opened in the

announcement that UiPath was a newly minted unicorn. To his

country by a leading RPA software provider, had a major role in the

right, in an airy office with a charming view in the heart of the city,

company’s advancement.

sits a little rainbow-haired unicorn he had just been gifted. “The

But, having emerged from Bucharest as leader of a market that is

first mistake,” Dines recalls, “was to build a start-up while also doing

only now taking shape at a global level, as a seller of enterprise soft-

consulting work and outsourcing. We had to bootstrap the company

ware, Romania’s first unicorn is part of an extremely rare subspecies.

by doing consulting work. It’s distracting, really. You’re much better

Especially considering that it started developing its core product

raising money by going to accelerators. But in our time it wasn’t pos-

independently of a market it had very little knowledge of, and only

sible,” he acknowledges, a hint that, perhaps, his confession should

five years ago considered shutting down the business.

What does RPA do?

UiPath is a robotic process automation vendor providing a complete software platform helping organizations automate business processes. The ‘robotic’ term can be misleading, as it has nothing to do with robots. Instead, it is a software tool that digitises highly repetitive work processes. Hence, the company’s mission is to eradicate tedious, repetitive tasks and let software robots do the grunt work.

UiPath enables businesses and organizations to develop an agile digital workforce by providing a state-of-the-art platform for software robots orchestration. Their products automate across all internal or web-based applications/databases and have unmatched solutions for Citrix, SAP and BPO automation.

be taken with a grain of salt. “I didn’t even know that that was the idea of building a start-up: to raise money from investors, validate the ideas, build a go-to-market product and then a strategy.”

Secondly, “the motivation wasn’t right in the beginning,” says Dines, in what sounds more like explanation than self-criticism. “My motivation was, I think, to build the minimum wealth. To have a

www.business-review.eu Business Review | April 2018

COVER STORY 11

decent life, in a way – Romania

software developer Adrian

was never an easy country in

Dorache, part of UiPath’s

which to have that. And espe-

original team, puts it, “At that

cially to be an entrepreneur.

time, we were building an

And going through the tough

engine and selling that engine

years, in the early 90s in Roma-

to other garages. We had a

nia, to me was an experience

good product and were always

that touched my entire life. So

busy with it, but we didn’t yet

I was always a bit concerned

know what we could do with it.

about building some wealth,

Until somebody came and told

to live a decent life,” he recalls.

us ‘you can use it to build an

“But that’s really a mistake,”

airplane.’”

he adds, stressing the perils of

The first client discovered

taking on the risk of becoming

them, not the other way round.

an entrepreneur in search of a

The Indian chapter of a large

stable income. “You don’t have

BPO company was doing a

to be an entrepreneur to build

pilot project to find the best

a decent life. It’s not worth it.

provider of RPA technology

So the right motivation for an

to meet its business needs.

entrepreneur is that something

UiPath, still named DeskOver

deep inside of you, the desire

at that time, competed against

to do something. Because be-

other RPA providers and came

ing an entrepreneur is extreme-

out on top. But the biggest

ly risky and while doing it you

take away from the experience

risk ruining your career.”

was a keen understanding of

“What changed my per-

the market their product was

spective was looking at new start-ups coming out of Silicon Valley.

operating for. “We understood there was a huge market out there of

TechCrunch started talking about new start-ups, and then there was

people who just do repetitive processes all day long, for whom our

Y Combinator [an American seed accelerator, started in March 2005]

technology, which emulates what people do, is perfect. From that

and then Paul Graham, one of my virtual mentors whose think-

moment on, things changed dramatically for us. We started to grow,”

ing really influenced me deeply. And I saw that you could actually build a company out of love for technology. For the sake of doing something for the greater good, of doing something better in this world. It changed my thinking completely. We gave up outsourcing completely and we said, ‘let’s build the best thing that we can and then we’ll see what happens.’ That was really a pivotal thing in our history,” he says.

But they still had room to make more mistakes. “We launched our product too late. That’s because we polished it too much, instead of bringing it to market much faster, getting feedback and going where the market wanted and not where we wanted to take it. And second, we killed it too late. So we didn’t fail fast, we failed late. We launched it late and failed late. Two big mistakes. I think for two to three years we were going in the wrong direction” he adds, as compelling as this can sound from the mouth of the co-founder of one of the world’s newest unicorns.

The breakthrough came in 2013, and it was nothing short of an “astral moment,” as Dines put it in the post-announcement press conference that introduced him to the Romanian public. Before that, with no clients willing to pay for their technology, they had considered closing their business. And with some justification, as they were breaking the basic rules of entrepreneurship: know your market well and build a product that the market needs. Instead, as

Unicorn stats Being magical creatures, unicorns are very rare. According to TechCrunch, there are currently 279 private VC-backed start-ups valued at over USD 1 billion. Last year, only 60 new start-ups were added to the unicorn club, fewer than the 66 that had joined the year before and way behind the record-setting 2015, which brought 99 newcomers.

Also, they are highly unpredictable. Traditionally having taken a major liking to the financial- and innovation-driven climate of Silicon Valley, of late they have found in China the second friendliest place to develop. But although in 2017 the majority of newcomers still emerged from the US and China, which contributed 29 and 24 unicorns respectively, thanks to the rise of cloud computing and easier access to international funding, new unicorns have started popping up in more exotic locations across the globe. Zooming in on Europe, the continent currently boasts 31 unicorns, with the UK contributing last year with four and Switzerland with one.

Moreover, their preference for markets is also largely a guessing game, although, as trends go, in recent years start-ups in sectors such as ridesharing, bike-sharing and co-working have consistently attracted strong funding. And not least, the USD 1 billion valuation itself carries with it a magic formula. Being fully known to investors only, its algorithm takes into account alongside intuitive factors such as the size of the market, for instance, growth predictions based on calculations that mostly elude outsiders.

www.business-review.eu Business Review | April 2018

12 COVER STORY

cilitating UiPath’s access to EY’s

Dines explains.

global clients as well.”

That year DeskOver

By April 2016, the company

launched the first UiPath Desktop Automation product line

had released its Front Office

based on Microsoft Workflow

and Back Office Server suites

Designer that specifically tar-

and made available its Studio

geted the RPA market. “In 2014

Community Edition, reaching

and 2015 it seemed to me that

10,000 active members in six

we had giant competitors, but

months. By the end of the year,

without looking at them, we

it had opened new offices in

started to grow the team and

London, New York and Benga-

things later exploded. There

luru (Bangalore), India, and had

comes a moment when you

added more than 250 enterprise

need to get a little crazy,” Dines

customers to its portfolio.

2017 brought UiPath indus-

says.

try recognition and marked the

GROWING ON THE RIGHT PATH

year of the company’s global

In 2015 DeskOver became

recognized as an RPA industry

UiPath, and concluded its first

leader in the Forrester Wave

partnerships with several glob-

Robotic Process Automation, Q1

al BPO and consulting firms.

2017, which compared 12 RPA

Moreover, the company opened

vendors against criteria in the

its US office, UiPath Inc, and

areas of current offering, strat-

expansion. In February, it was

expanded the team from the core of 10 to over 100. In August, UiPath

egy and market presence. When assessed solely by RPA technology

closed an initial seed round led by Earlybird, with Credo Ventures

criteria, it received the industry’s highest score. “The ranking count-

and Seedcamp as backers. Announced the previous year, the round

ed a lot,” Dorache says. “It matters a lot what analysts say, because

required 14 months of negotiations and brought the start-up a USD

they communicate with the funds and for us that was good feedback.

1.6 million investment. In September, it was included in Seedcamp

Besides making sales, it is also important that the product you bring

Week in London.

is indeed very good. It mattered because we had started as a team of

It was as early as 2015 that UiPath appeared on the radar of EY

ten. And by the time this report came out, we were a company that

Romania, with which it later developed a strategic partnership that

delivered. And this is important, because big companies want to deal

turned global. “We got into Romania through our partner EY. EY

with big companies.”

Romania has built an implementation team based on UiPath technol-

The main catalyst of growth, a USD 30 million investment, was

ogy and it is very successful worldwide within the entire EY group,”

secured in April in one of the biggest Series A rounds of funding in

Dines says.

Europe in 2017, led by Accel. Previous investors Earlybird Venture

Aurelia Costache, advisory services leader at EY Romania and

Capital, Credo Ventures and Seedcamp also joined. The lead investor

head of the RPA Center of Excellence in Bucharest, which is cur-

for the deal on behalf of Accel was Buzau-born but London-based

rently acting as a global hub for UiPath expertise, takes up the story,

partner Luciana Lixandru, who joined UiPath’s board. “What I

noting, “EY Romania became aware of UiPath’s technology in 2015

thought was very intriguing early on,” she told howtoweb.co about

and, since then, we have been developing our partnership to jointly

the firm she was introduced to by Dan Lupu, partner at Earlybird

bring our clients the value-add-

Venture Capital, “was that the

ed of an end-to-end solution.

company did not have any real

With the benefit of proximity,

feet on the ground in the US

we were able to work together

and yet they were getting a lot

in implementing the first RPA

of attention from US custom-

projects in Romania, leveraging

ers, riding a very timely trend.”

on the trust relationships that

What attracted Accel to UiPath,

EY had built with its clients.

she notes, was the team and

Being a globally integrated

its commitment to building a

firm, we were able to support

large company. “We’re early

our offices in other countries

stage investors, so for us at the

with the UiPath expertise, fa-

end of the day it’s all about the

www.business-review.eu Business Review | April 2018

COVER STORY 13

founder and the team. Even

thousands of people world-

the most successful companies

wide to train with the UiPath

grow with ups and downs; it’s

RPA platform solution.

never a straight line to the top.

If you have the right team and

THE YEAR OF THE UNICORN

the right founder they can nav-

Less than one year after receiv-

igate these periods smoothly.

ing its first substantial invest-

When I go back to the drawing

ment, UiPath raised USD 153

board, I focus most on the team

million in a Series B funding,

and their ability and ambition

again led by Accel, with new

to build a large company, and

investors CapitalG and Kleiner

I would not underestimate the

Perkins Caufield & Byers

value of the second part.”

(KPCB) contributing, along-

At that time, UiPath already

side early investors Earlybird,

counted about 200 large en-

Credo Ventures and Seedcamp.

terprises among its customers,

The company’s USD 1.1 billion

including Lufthansa, Gen-

valuation put UiPath on the

erali, Telenor and Dong Energy.

exclusive list of so-called uni-

About 30 percent were located

corns. According to Accel rep-

in the US, with another 40

resentatives, the new financing

percent in Europe and 30 per-

will be used to accelerate the

cent in Asia, and they spanned

development of the company’s

sectors such as banking and

product roadmap, particularly

financial services, insurance,

around innovations that inte-

manufacturing, utilities, healthcare and government.

The investment, UiPath’s chief robotics officer (CRO) Boris Krumrey told BR in an exclusive interview in December of last year, was directed at hiring the best people, growing the sales, technical

grate machine learning and AI algorithms within customers’ digital business operations. Following the round, Accel partner Rich Wong joined the company’s board of directors.

According to Dines, securing the Series B investment took just

customer service organization and product development as well as

two months and choosing its future partners was this time up to

expanding into key markets and an infrastructure that is globally

UiPath, which went for investors with a Google connection. Apart

expanding. “Right now, we are focusing on growing and strengthen-

from being a substantial endorsement for UiPath’s technology, the

ing our partnerships with our service integrators, service providers,

addition of CapitalG, the late-stage growth venture capital fund

consulting partners and technology partners. Especially with the

financed by Google’s Alphabet Inc., paves the way for collabora-

integration of leading technology partners such as Oracle, Celonis

tion with Google’s technical advisors to continue advancing AI

and ABBYY, we have realized an expandable and business agile RPA

and ML capabilities. “We chose Google for its interest in AI,” Dines

platform that can actually realize a ‘digital workforce’, he outlined.

says. Headquartered in Silicon Valley, KPCB was an early investor in

In 2017 UiPath opened offices in Australia, France, Japan and Singa-

Google, alongside Amazon and AOL, among others.

pore, and had an employee base of over 400 people.

Needless to say, in 2018 UiPath proved to early investors that

Last year, UiPath’s number of clients increased by 611 percent,

it was more than just a winning horse. “Two and a half years ago,

and included Allianz, BMW Group, CenturyLink, Dairy Farm Group,

when we invested, the company consisted of 12 people huddled

Dentsu Inc., Huawei, Morningstar and Sumitomo Mitsui Financial

together in an apartment in Bucharest. There was still no product

Group. Turnover went up by

presentation and no company

790 percent. According to

deck. Commercial model and

Dines, the company’s growth is

pricing were still to be tested

unique in the world, as it takes

with clients,” recalls Dan Lupu,

place in the enterprise software

partner at Earlybird Venture

enterprise field. “Our investors

Capital, the largest Venture

say they have never seen this

Capital Fund for Emerging

level of growth from enterprise

Europe, in a March 2018 blog

software, rather than the con-

post. “In hindsight, after two

sumer kind.”

large funding rounds in quick

2017 also saw the launch of UiPath Academy, which allows

succession, the decision to invest in UiPath back at the

www.business-review.eu Business Review | April 2018

14 COVER STORY

seed stage now seems obvious… Tell that to the long list of smart

being, to reach humility. Ego is the worst enemy in one’s life. And

investors that turned down our offer to become part of the syndicate

to us humility came a bit from the realization that we were not the

and co-invest with us.”

best software engineers in the world. We don’t have the best ideas

That privileged category includes Marius Ghenea, partner at 3TS

in the world. And what can make us successful is really the desire to

Capital, one of the region’s most important investment funds, who

do something better. To become better. And only people who think

dubbed UiPath “the one that got away.” He tells BR, “Of course I wish

within the humility framework can improve. Because otherwise you

I had invested in the start-up, and furthermore, I was in discussions

think you are good enough. And humility helps you overcome this

with Daniel, the co-founder, and the other VCs for the first round,

type of barrier,” he says.

but did not finalize the investment at that time. But one cannot make every investment.” Ghenea adds, “Besides, UiPath had very

RUNNING TOWARDS THE RAINBOW

good and smart investors. I respect very much the activity of the VCs

To many analysts, 2017 was the year that RPA truly emerged as a

involved there, and the results are visible. Then again, in retrospect

new enterprise software category, similar in scope, size and impact

it is always a lot easier to determine which investments a VC should

to ERPs, databases and security software, which supports markets

have made, when one sees the results.” Moreover, the valuation

worth billions where big tech companies thrive. According to UiPath

“is excellent news for the company and its founders and sharehold-

CRO Boris Krumrey, in 2017 Uipath grew alongside the market. “2017

ers and great news for the Romanian tech ecosystem, as something

was the year RPA proved itself in terms of ROI and business out-

like that has almost never happened in the region,” he adds, except

comes, with enterprises actually surpassing the prevision potential

for, “LogMeIn from Hungary, a few years back, a company with the

of RPA adoption and Enterprise RPA becoming a household name

initial investment provided by 3TS Capital.”

for global companies,” he notes. “We proved to customers and implementation partners that not only is our product superior, easier

FROM ROMANIAN START-UP TO GLOBAL PLAYER

and faster to scale up, but that implementation is smooth with the

The growth of the company, both in size and in value, was explo-

support of our strong and dedicated specialists. UiPath was quick to

sive. No longer a Romanian start-up, UiPath morphed into a global

respond to particular customer needs, so we went the extra mile in

firm that thrives on international talent, Dines is very keen to stress.

terms of both the product, and the delivery teams.”

Speaking from his office on Bucharest’s Caderea Bastiliei Street,

Although overall the RPA market is still considered an emerging

where the company occupies three floors, Dines reflects on the effect

one, it is expected to grow to USD 8.75 billion by 2024. According to

of the growth on the company and its people. “In June 2017, we had

UiPath’s CEO, being a newcomer in a nascent market brings more

only one person in our finance team and no one in the legal team.

advantages than challenges, because you are allowed to establish

Now we have about 12 lawyers worldwide and almost 40 people in

your presence in the market. “An incumbent in an enterprise is very

the finance team, that fast was our growth.”

difficult to replace,” says Dines, whose company expects to double

The repeated metamorphoses of the company were witnessed

its 700-strong customer base in 2018. For new start-ups now, that

by its core team, all of whom are still on board. “We have a few gen-

are trying to copy our technology… even if they succeed in building

erations,” Dines outlines. “The first generation, around 15 people;

a slightly better technology than us, it’s going to be very difficult to

then the second generation; and the next, about 100.” Part of the

replace us in the enterprises where we have very good relationships

“Delea Veche generation”, lead software developer Lavinia-Andreea

and we will have more time to build better and better technology. It’s

Cojocaru, who still remembers the time when neighbors would come

a race. Being new in the market allows you to be ahead in the race

knocking on their door to bring treats to the young people work-

and it is very difficult to catch the market leader.”

ing till late, was in the middle of it all. “Things changed very much.

“A well-established market is very difficult to disrupt,” he

When there were ten of us, we would communicate with each other

stressed. “So, it will be a long time before someone disrupts you, and

and that was that. But when the team grew, we had to transfer the

from the point of view of technology they will not be able to disrupt

knowledge to new employees, help them and answer a lot of ques-

your position on a market you are already so well established in.”

tions. Moreover, it was a matter

And investors agree. As Accel’s

of learning to trust other

Lixandru told howtoweb.co last

people. They did things better

year, UiPath might very well

than us, but it required some

become a decacorn. “I think we

adjusting.”

can expect to have a multi-

According to Dines, it is

billion dollar company out of

down to the core team as well

Bucharest.” However, for Dines,

as his co-founders and himself

listing on the NASDAQ, some-

to promote a culture built, in

thing he expects the company

his own words, around the

to achieve in two to three years’

concept of “humility”. “It’s the

time, is a much more coveted

natural evolution of a human

goal.

www.business-review.eu Business Review | April 2018

16 INTERNATIONAL POLITICS

Council of EU presidency: is Romania ready?

Despite the local political turmoil and Romania’s failure to implement all EU legislation, the country is due to assume the bloc’s rotating presidency from January to June 2019, effectively putting it in charge of directing the EU for six months. The honor comes at one of the most critical moments in the EU’s history, with the UK due to exit the union at the end of March 2019.

Moreover, over May 23-26, 2019, EU citizens will be called upon to elect a new Parliament. The result will set the course for the next EU Commission and other top jobs in the bloc’s institutions. So is Romania ready to roll the dice for the European Union?

By Oana Vasiliu SIX-MONTH ROADMAP From 1 January to the end of June 2019, there will be about 250 meetings in the country and 1,400 in Brussels, as well as major events such as a European summit in Sibiu and ministerial meetings to be hosted by the Parliament Palace in Bucharest, the minister-delegate for European affairs, Victor Negrescu, recently told Europa FM. He also shared some financial information, stating, “In the last ten years, the budget has ranged from EUR 60-171 million. Poland had a budget of EUR 110 million, and the Bulgarian presidency about EUR 75-80 million.”

What’s next?

www.business-review.eu Business Review | April 2018 May 2016

Romania’s finances with the EU in 2016*: TOTAL EU SPENDING IN ROMANIA: EUR 7.4 BILLION

INTERNATIONAL COVER POLITICS STORY 14 17

Absorption angst There were concerns that Romania needed more time to prepare for accession back in 2007, so EU transfers could be absorbed efficiently. Lack of institutional capacity and widespread corruption have prevented the country from fully benefiting from EU funds. Out

TOTAL EU SPENDING AS % OF ROMANIAN GROSS NATIONAL INCOME (GNI): 4.47%

of the EUR 15.5 billion allocated to Romania under the EU cohesion policy over 2007– 2013 (supplemented by EUR 3.4 billion national co-funding), only 75 percent was spent by April 2016, according to EU

TOTAL ROMANIAN CONTRIBUTION TO THE EU BUDGET: EUR 1.4 BILLION

analysis. The total sum used in Romania amounted to 1.5 percent of GDP over seven years, one of the lowest shares among new EU members. Still, there have been good results, including the expansion of

ROMANIAN CONTRIBUTION TO THE EU BUDGET AS % OF ITS GNI: 0.83%

water and sewage infrastructure and the modernization of public heating systems.

*according to official information from EU

Fighting corruption

WHO’S GOING TO RUN THE EU PRESIDENCY? Several names have been put on the table. In March, the Ministry of

The Cooperation and Verification Mechanism (CVM) was set up

Finance (MFP) said it would pursue an administrative reform program

during Romania’s EU accession journey to address shortcomings

to cut red tape, improve IT infrastructure and support Romania’s EU

in judicial reform and the fight against corruption. Since then, CVM

presidency – for which it will would create 14 new jobs with contracts

reports have sought to help focus the Romanian authorities’ efforts

through to August 31, 2019. The MFP has also updated the organiza-

through specific recommendations, and have charted the progress

tional charts for itself and the tax administration agency ANAF.

made. Of the 12 recommendations made in September 2017 for Ro-

Romania’s EC representative told Business Review that the EC was

mania’s legal system, only one has been achieved. Challenges to and

in close contact with the local authorities for the preparation of the

the questioning of judicial independence have also been a persis-

presidency. “We appreciate the broad public consultation organized in

tent source of concern, notes the EC. A scandal has arisen regarding

Romania for the definition of its priorities for its first-ever presidency.

the CVM of 2012, when the EC released a list of culprits, which was

We’re complementing these efforts with our own citizens’ dialogues,

leaked to the media in March of this year.

where members of the college go to all member states to listen to our citizens’ hopes and concerns,” said Romania’s EC representatives.

Road to the Union

They added that the Juncker Commission had organized over 500 citizen dialogues, with some 30 such events taking place in Romania.

“We look forward to a very successful presidency, as a maturity test for Romania’s EU membership and the country’s commitment to the fundamental EU values,” they noted.

Radu Magdin, international analyst, consultant & trainer and CEO of Smartlink, told BR: “The Romanian presidency is a moment of opportunity, acknowledged as such by all the stakeholders involved in the preparations. It has escaped local political controversies for the moment.” He added that as a country with constantly high approval ratings for the EU, Romania has the potential to be a mediator, consolidating the European idea.

“Our diplomats will compensate for the current state of the political class. Romania should and will engage the region and the member

February 1, 1993 – The Romania-EU Association Agreement is signed, beginning Romania’s EU journey 1995 – The document comes into force 1998-2006 – The European Commission presents annual reports assessing Romania’s progress December 1999 – The European Council officially opens accession negotiations with Romania and six other states December 14, 2004 – Accession negotiations technically concluded and accession calendar finalized April 2005 – Treaty of Accession signed

states’ leadership in a process of redefining the European project

January 1, 2007 – Romania and Bulgaria become the 26th and 27th members of the EU

beyond Brexit: how do we want Europe to look 5 to 10 years from now,

Source: www.romania2019.eu

how do we advance more inclusive development, reduce the gap between the EU’s East and West, and address global challenges together.”

He urged, “Romania should act as a mediator as much as a vision-

the EU presidency, due to the heavy work done behind the scenes by

ary, with confidence, pragmatism and consideration for its regional

professionals at the Permanent Representation in Brussels and in some

ambitions – the #road2Sibiu will prove better than the state of other

ministries; the President is also more experienced now in the Euro-

country roads, if we can make a pun. Expect positive surprises from

pean game.”

www.business-review.eu Business Review | April 2018

18 ECONOMY

Romanian exporters feel the pressure over EU-US trade scuffle With Romanian exports to the United States having climbed to USD 2.2 billion in 2017, the risk of a trade war between the European Union and the US could pose serious challenges to local companies that have ventured onto the American market.

By Ovidiu Posirca

Donald Trump, US president

A

Joseph Quinlan, expert in the transatlantic economy

nalysts say that all sides stand to lose

can president, Donald Trump, announced

American products that would be subject to

from a trade conflict. The EU and

new steel and aluminum tariffs. His admin-

penalties if Trump’s tariffs are enforced. It

US economies together account for

istration is imposing tariffs of 25 percent on

covers around USD 3.4 billion of annual trade

about half the entire world’s GDP and nearly a

imported steel and 10 percent on aluminum,

and includes everything from bourbon and

third of world trade flows.

but is temporarily exempting Canada and

jeans to sailboats. Trump reacted to the move,

Mexico.

announcing that the US could enforce a tax on

“There would be no winners in a transatlantic trade war—only losers over the long

Trump said that only “real friends” of the

imports of EU-manufactured cars.

haul,” Joseph Quinlan, an expert in the trans-

US would avoid tariffs and it was not clear if

atlantic economy and high-profile Wall Street

the EU was in this category. Meanwhile, the

from this situation, even if one is given to be-

economist/strategist, told BR. He added that

German minister of economy Peter Altmaier

lieve that the EU is more dependent on the US

consumers on both sides of the Atlantic and

and EU Trade Commissioner Cecilia Malm-

because of the EUR 121 billion trade surplus

workers would be directly affected by tariffs.

strom flew to Washington to negotiate a tariff

with the US in 2017,” said Anghel, who sits on

exemption for the EU with Trump. The tariffs

the board of the Foreign Investors Council

were set to be enforced in late March.

(FIC).

“I expect cooler heads to prevail and believe the US-EU will avoid an all out assault

“Neither the US nor the EU would benefit

on each other’s trade. The stakes are too high

“The EU should act with wisdom and,

given the thick web of trade and investment

at least for the moment, not respond in the

has warned that American import tariffs

that makes up the partnership,” added Quin-

same manner to the US actions. The risk of

would cause damage both in the US and

lan, who authored The Case for Investing in

triggering an escalation that would also hit

outside, “including to its manufacturing and

Europe report.

other areas of cooperation between the two

construction sectors, which are major users of

is quite high,” Daniel Anghel, tax services

aluminum and steel.”

IMF WARNS TARIFFS WOULD HIT US ECONOMY

partner at PwC Romania, the professional services firm, told BR.

Gloomy predictions of a trade war between

The European Commission, the executive

the EU and the US emerged after the Ameri-

arm of the EU, has already published a list of

The International Monetary Fund (IMF)

Meanwhile, US commerce secretary Wilbur Ross told CNBC that the White House is “not trying to blow up the world” with tariffs.

“We’re not looking for a trade war. We’re

www.business-review.eu Business Review | April 2018 May 2016

COVER ECONOMY STORY 19 14

dangerous paths,” said Anghel.

While the local business environment is carefully analyzing the implications of a potential trade conflict on both sides of the Atlantic, players in the pharma sector are planning to boost their presence in the US. The Association of Industrial Pharma Producers in Romania (PRIMER) says that its member companies are looking to tap the American market. At present, only Antibiotice Iasi, one of PRIMER’s 16 members, exports to the US. Romania was recently included in the Mutual Recognition Agreement signed by the European Medicine Agency (EMA) and the US Food and Drug Administration (FDA).

Daniel Anghel, PwC Romania

Dragos Damian, head of PRIMER, said this deal means that drugs manufactured in Romania will be exported immediately after

going to have very sensible relations with our

also be affected, since exports are the primary

allies,” Ross said.

means by which firms sell goods

registration to the US, without the need for

in the US,” said Quinlan.

JOBS AT RISK IN ROMANIA The Americans imported USD 120.5 million worth of steel mill products from Romania in 2017, says the US Department of Commerce. In total, the EU’s steel exports to the US amounted to USD 6.6 billion, with Germany selling the biggest quantity, 1.49 million metric tonnes. Romania’s exports stood at 82,278 metric tonnes.

Looking at the figures, the EU would stand to lose the most from the tariffs, while China would be less affected. The value of Chinese steel exports to the US stood at USD 1 billion last year, but it should be pointed out that the country is already subject to tough trade penalties from the US. Romania will be among the nine member

Local companies exporting to the US should also pay attention to the EU acquis

additional inspection by the FDA. “It’s possible for groups that have plants in

states that will bear the brunt of the new

that forbids “one to one” deals between the

Romania to transfer technology to these sites

tariffs on steel and aluminum, said MEP Iuliu

US and EU members.

to accommodate manufacturing for the US,”

Winkler, vice-chair of the Committee on International Trade in the European Parliament.

“The enforcement of such taxes by the US will endanger thousands of jobs in Romania

Anghel of PwC Romania agrees that EUbased companies will be affected by the roll out of tariffs.

“However, I hope that in the end reason

representatives of the association told BR. PRIMER officials declined to expand on the ongoing negotiations between the US and the EU, but pointed out that the removal

alone,” said Winkler in a press conference. He

and common sense will prevail and the world

of customs and trade tariffs once Romania

added that the main steel products exported

as a whole will not revert to the ill-fated

joined the EU had both positive and negative

by Romania to the US are seamless pipes.

protectionist trading policies that hurt global

effects. “The share of imports went up, as did

growth so much in the 1930s, deepening the

patients’ access to more drugs, but paradoxi-

steel products head to the US, with a value of

global recession during that decade and lead-

cally, the share of intra-EU re-exports grew,

around EUR 160 million, said Winkler.

ing to the Second World War. I believe that

thus limiting access to certain drugs,” they

we need to learn from history and avert such

commented.

More than 3 percent of the country’s total

“Smaller exporters like Romania would

www.business-review.eu Business Review | April 2018

20 INTERVIEW

The architect shaping the local retail industry For Matius Ichim, co-founder of Matius Studio, the first retail architecture studio in Romania, and managing partner at the Retail Academy, the entrepreneurial path started in 2000 when he was a student. Today his studio has a team of 18 specialists who have worked for about 15 percent of the stores in each mall opened in Romania so far. He tells Business Review about the development of the local retail sector and what’s next for the industry.

By Anda Sebesi

How and when did you make your entrance on the business scene?

How would you describe the business environment back then?

Balkan, which was quite familiar for both the

In 2000, when Iulius Mall was under con-

First, there was no credit for start-ups and

employees. Individuals who had recently

struction and I was a fourth-year student at

nobody knew what a business plan was.

left their jobs in the public system and fresh

the Faculty of Construction and Architecture

Everything was intuitive. Demand exceeded

graduates were among the first investors I

in Iasi, I had the opportunity to access one of

supply, and products that were not sold in the

interacted with back then.

the most competitive, dynamic and avant-

current year were “suitable” for the next two

garde niches in architecture: retail. It was the

or three years. The market was comprised

first time that I had interacted with modern

of shapeless buyers who had no consumer

How would you describe the retail sector in the early 2000s?

retail. My first notable project was Otiola,

profile and the idea of luxury products was

While private retail was in its infancy, state-

a fashion street store in Iasi developed as a

practically nonexistent.

owned retail lurched from one month to

family business.

The majority of foreign investors were

Romanian state and their local partners and

another, because of a lack of suppliers, vision

www.business-review.eu November Business Review | April 2018 2017

INTERVIEW 21

and capacity to adapt to what we now call

translating some

consumer society. Kiosks dominated the

solutions from brand

retail scene, international retail chains were

books and designing

lacking and imports were done by bus. Family

retail concepts.

members were the sole source for invest-

Deluka, Jolidon,

ments at that time and there were no market

Noriel, JPB Tabac

research, ATMs or online payments.

Shop, FarmaVet, D’s

The retailer was entrepreneur and sales-

Damat, Autograf,

clerk. He or she felt the market, anticipated

Lancel, FreyWille,

the next season, and fixed the prices depend-

Columbia, Roberto-

ing on demand and competitors’ prices. There

Bravo, Only for You,

was no medium- or long-term vision and

Levi’s, Lacoste and

entrepreneurs active in retail invested their

Pegas are among our

profits either in huge houses or second-hand

clients so far.

cars. The mannequins were reshaped mummies and the signs were made of manually

just socioeconomic activity. It will be rather

Against this backdrop, the second mall in Bu-

What major opportunities does the online environment offer the retail sector now?

charest, Plaza Mall, was about to be opened.

The retail space has jumped over many

need, related to tourism, education or day-to-

stages, but the IT sector could significantly di-

day activities.

cut out letters soldered together and pasted.

the consequence of a normal and contextual

How has technology influenced the concept of stores?

minish the differences between domestic and

The IT sector has constantly changed our

ment facilitates comparison between prices

How has the approach to store concepts changed in the last two decades?

lives and generated the emergence of the first

and customers don’t hesitate to buy or decide

At the beginning, we came up with designs

virtual stores which expanded and started

to buy online right from the physical store of

for the owner of a store; later for the devel-

to revolutionize the buying experience. A

the competition.

oper of a commercial center and then for a

project in Russia in which the company was

For example, now a product in storage can be

so called “persona”. We began to think in a

involved in 2016 is a successful example of

accessed and tested

how a real commercial space “pixelates” its

virtually, analyzed

frontiers, migrating to virtual and augmented

in 3D or validated by

reality. As a trend, the storefront is digitaliz-

friends from a virtual

ing and becoming intelligent and predictable,

network and then

anticipating consumers’ expectations based

bought from an of-

on their online profile.

fice building or taxi.

For sure the IT industry will greatly

external competitors. The online environ-

There are just digits

reshape the retail sector in terms of both

between produc-

logistics – facilitating the process for the re-

ers, customers and

tailer – and the purchasing experience. It will

retailer, without any

plunge the consumer into diverse universes

costs.

with the support of tools like virtual glasses and augmented reality environments.

I started by working for local retailers in Iasi

How do you think stores will look in the next 10-15 years?

like Piticot, Otiola, Herren and Raviolu, and

I think that in the

then I extended my activity to the border-

next 10-15 years we will no longer talk about

much more nuanced way from different per-

ing counties. Soon after we moved our office

malls as they are today, because they will

spectives: the psychological perspective and

to Bucharest, in 2004, we started to extend

be converted into multifunctional spaces.

the flow between interaction points with the

our team, integrating engineers specialized

The retail space will be where the customer

real, virtual and augmented reality.

in different fields of activity. Back then we

wants to be: in the park, on the bus or at the

worked for large national and international

university. We will no longer go to the mall; it

retail chains, making adaptations to local-

will come to us. The retail sector as we see it

What’s your most important project so far and what did you learn from it?

ize projects designed by foreign specialists,

today will be reshaped and it will no longer be

Liberty Mall was the most organized, safest

Who have your clients been so far?

www.business-review.eu Business Review | April 2018

22 INTERVIEW

concepts. Mean-

levels, being visible in product design, mar-

while, constructors,

keting and the arrangement of retail spaces.

retailers, developers

Finally, the market needed a brand identity,

and customers could

a differentiation and local detail. Both local

have some terms to

producers and retailers started to sell their

make comparisons.

products through their own chain of stores.

Specific standards and external

impose expensive

You are about to launch the Retail Academy. What can you tell us about this project and what does it bring to the Romanian market?

and sophisticated

The Retail Academy will revolutionize the

systems like lighting

retail sector and the associative culture of

furniture and display

creatives and businesspeople in Romania. It

systems along with

will comprise 12 specialists with international

market strategies,

expertise in fields like behaviourism, audio

market segmenta-

and olfactory identity, IT architecture, HR,

specialists started to emerge and

and cleanest site where I have worked in

tion and tenants’ books. About 90 percent

cultural anthropology, gamification, market-

Romania. The Noriel stores and Dona phar-

of the local retailers copied or drew inspira-

ing and communication, facilitation, design

macies have been the largest chains and the

tion from the identity of the brands that had

thinking and production.

most complex projects for us, but also those

already entered or would enter the local mar-

which made a higher contribution to our

ket. We’re talking about marketing and facil-

retail community oriented towards design-

income. The project we developed in Russia

ity management, retail architecture, design,

ing prototypes. It has been conceived as an

was by far the one which most valued our

identity, storefronts, flows and effective use

environment where some utopian projects for

creative potential, cross-culture and power to

of a commercial space. It was a frenetic time

the retailers and entrepreneurs of today will

access very different environments and social

dominated by a fever that included the whole

become valid tools in the society of tomor-

and professional fields. Aside from having

industry eager to seize the market.

row.

innovated at the frontier of retail, I learned

From 2008 con-

to appreciate much more local creativity and

sumption shrank,

intelligence.

and this put investments on hold while

What stages has the local retail sector gone through?

many sites were

In my opinion, the local retail sector has wit-

crisis, retailers lift

nessed four major stages in the past twenty

their heads gradu-

years: outlawry, the external invasion, the

ally, although they

crisis and nationalism. In the outlawry stage,

didn’t have the same

there was a lack of services and the retail sec-

appetite to sign

tor was the first economic field to explode. It

contracts with the

was commerce based on imports. Everyone

new malls that were

was in with a chance, and many entrepre-

about to be opened

neurs started to make small investments. The

like AFI Cotroceni

lohn system generated an infusion of technol-

(2009), Maritimo

ogy and know-how in fashion retail. Last but

(2011), Ploiesti Shop-

not least, promotions were nonexistent. Malls

ping Center (2012)

had no cinemas while their food courts were

and Promenada

comprised of a McDonalds, one or two restau-

(2013).

rants and a coffee house.

The so-called external invasion was

closed. In times of

Last but not least, after the crisis, the

characterized by the advent of large interna-

nationalism frenzy

tional retailers which increased the standards

gained momentum

of image and services. It was the moment

and extended each

when players started to copy other formats or

year to more social

The Retail Academy will be the first

www.business-review.eu Business Review | April 2018

24 BUSINESS

Local infrastructure woes create business If strong infrastructure is considered a key factor in development, weak infrastructure is usually seen as its opposite: a factor in underdevelopment. But decades of poor infrastructure in a rapidly developing country have stimulated the growth of ‘poor infrastructure-related’ businesses in Romania.

By Sorin Melenciuc had only one option: state-owned company Tarom and a return fare of more than EUR 200. Today, you can buy tickets for the same route from EUR 17 with low-cost carriers like Wizz Air or Blue Air, which are posting record passenger numbers.

According to recent official data, the number of passengers on domestic flights in Romania soared 53.7 percent in 2017, to a record high of 2.74 million. Growing incomes, cheap flights by low-cost airlines and poor infrastructure across the country have all boosted passenger numbers in recent years.

Photo: Dreamstime

In the last couple of years, no-frills carriers like Wizz Air, Blue Air and Ryanair have entered the domestic flights market in Romania, which was controlled for years by The lack of infrastructure is considered to be one of the main problems of Romania

N

state-owned Tarom, trying to benefit from the rising appetite for flights between large urban areas. But lack of investment in increasing air-

ew business models vowing to

“Many companies that had their own distri-

port capacity is already affecting passengers’

relieve the infrastructural woes of

bution branches closed them and came to

comfort, especially at Henri Coanda Interna-

other businesses have developed in

us. They could have chosen rail, but there is

tional Airport, say players.

Romania during the last decade. And com-

a huge lack of investment,” Fan Courier CEO

mentators say they have grown stronger, as

Felix Patrascanu told Business Review.

UBERISATION

Poor infrastructure has also kept giant

Bucharest is said to be Europe’s most congest-

international couriers out. “If Romania had

ed city. In the face of local authorities’ inertia,

good infrastructure, the multinational com-

solutions proposed by emerging technology-

COURIERS TAKE THE STRAIN

panies would probably also be present on the

driven business models are helping tackle the

The first major disadvantage of poor infra-

domestic courier market. But they prefer to

capital’s traffic troubles.

structure is that it reduces people’s ability to

operate only international couriers in Roma-

move around the country, say experts. But

nia,” Patrascanu said.

infrastructure projects are rare due to lack of financing.

In 2017, Bucharest was ranked the most congested city on the continent and fifth in the world by TomTom’s Traffic Index. On

they still have to get merchandise and items from one part of the country to another, and

DOMESTIC FLIGHTS SOAR

average, Bucharest drivers can expect to

are persuaded to send even objects they

But in other sectors, multinational compa-

spend 50 percent more time stuck in their

would usually carry with them while visiting

nies have been the first to take advantage of

cars than inhabitants of global cities like New

friends or relatives. As a consequence, this

poor infrastructure. A couple of years ago,

York, Istanbul, Rio de Janeiro and Beijing,

poor infrastructure-related behavior has

if you wanted to fly from Bucharest to the

which are home to between 8 and 21 million

boosted the activity of local courier firms.

biggest city in Transylvania, Cluj-Napoca, you

people. In the face of the city’s mounting

www.business-review.eu Business Review | April 2018 May 2016

COVER BUSINESS STORY 25 14

laxation), Elysium (wellness) and Galaxy (the family area, with playground).

Representatives say the investment has already proved successful. Within less than a year after its official opening, Therme Bucharest expended the Galaxy area by 4,000 sqm, following an investment of EUR 10 million.

The expansion was decided earlier than initially planned due to the success enjoyed since the opening, according to Therme representatives. “Romanians were very open to the new relaxing, wellness and fun at Therme Bucharest. Expansion was a natural step due Travelling from one Romanian city to another takes many additional driving hours due to poor infrastructure

to our visitors to the Galaxy area,” said Stelian Iacob, general manager of Therme Bucharest.

Other tourism investments close to Bu-

traffic problems – the most pressing of them

Corolea said. According to a survey conduct-

charest have proved fruitful, as inhabitants

being, alongside traffic-clogged arteries and

ed by the company in October 2017 on 2,770

of Bucharest have had increasing difficulty

the ensuing air and noise pollution, the poor

Uber users, many of them combine the ser-

visiting resorts like Comana (30 km south of

state of many roads, scarcity of parking spots

vice with public transportation. “One in two

Bucharest) due to heavy traffic.

and ageing car parks – local authorities have

respondents prefer Uber or public transporta-

been notoriously slow to react.

tion when they are headed somewhere with

PREVAILING DISADVANTAGES

limited parking spaces,” Corolea noted.

But these poor infrastructure-related busi-

“Moreover, in Bucharest, the service

nesses are far from able to offset the many

It’s no surprise that Uber, to many a byword for disruption, has successfully exported its business model, one of the major

extends the city’s public transportation

disadvantages the lack of infrastructure

global symbols of the sharing economy, to

network – more than 20 percent of Uber rides

creates. Local entrepreneurs warn that entire

Bucharest.

in Bucharest begin close to a subway station

regions of Romania are cut off and lack a

or public transportation hub, especially in the

future if the situation does not improve.

Finance Group Romania, the local branch of

outskirts, which are underserved by public

“Lack of investments isolates. Government

Porsche Bank AG, made Bucharest one of the

transportation,” she added. The service, sur-

investments are usually followed by private

first major European cities to experience the

veys show, has had a real impact on decreas-

sector investments. We have already isolated

product of its think-like-a-startup mental-

ing the number of cars in Bucharest.

Moldova (Romania’s poorest region) and we

At the other end of the spectrum, Porsche

ity, the sharetoo car sharing business line for corporate clients.

risk being cut off from the major European

SHORT-DISTANCE TOURISM

transport corridors,” Patrascanu told Business

While both provide Bucharest’s digitally

The difficulty of moving around the coun-

Review.

savvy consumers with alternative transport

try has also boosted one particular type of

Investors also point out that poor in-

experiences, they promise to do so while also

tourism: short-distance tourism. It follows

frastructure increases the costs of running

benefitting the city they operate in. Since

the proverb: “If the mountain won’t come to

businesses in Romania. “In order to have

entering the market in February 2015, Uber

Muhammad, then Muhammad must go to

good logistics, you need investments from

has attracted 300,000 registered users in

the mountain”. Tourism entrepreneurs have

two sources: private and public. If the public

four major cities, making Romania its largest

moved their investments closer to clients, in

investments are missing, you risk investing

market in CEE, after Poland and well ahead

or around the big cities. Someone living in

money for nothing,” Patrascanu added. Inves-

of the Czech Republic, Croatia and Slovakia.

Bucharest can now visit several local attrac-

tors and mere drivers alike want the govern-

Of the total, 250,000 are based in Bucharest.

tions without much traveling.

ment to speed up investments in motorways,

According to Alexandra Corolea, Uber senior

Austrian group A-HEAT has invested

city ring roads and national roads in order to

communications associate for the East Bal-

around EUR 30 million in Therme Bucharest,

improve Romania’s transport links. Looking

kans, the service managed to more than triple

one of the biggest European centers of well-

on the motorway map of Europe, Romania is

its user figures at the end of its first year.

ness based on thermal water, which opened

a blank spot on the fringes of the continent’s

in January 2016.

busy network.

“The service grew also because its reliability improved dramatically. While, at first,

The facility has an outdoor area of over

a car arrived, on average, in 12 minutes, now

250,000 sqm and an indoor area of 30,000

European Union member states, but has only

the waiting time is under 4 minutes. Our

sqm, and can host 4,000 visitors at a time.

748 kilometers of motorways, less than Bul-

objective is to reduce it to below 2 minutes,”

It is split into three zones: The Palms (for re-

garia, which is about half the size.

The country is the seventh largest among

www.business-review.eu Business Review | April 2018

26 BANKING

Local lenders cut the cash and develop digital Photo: Dreamstime

While Romania’s major lenders are already investing in the banking of the coming decades, trying to adapt to the new generations who’ve grown up on Google and Facebook, some say a sizeable portion of their customers may still prefer old school, offline banking.

By Sorin Melenciuc

I

n the last couple of years, big banks in Romania have revealed projects responding to the emerging trends of the interna-

tional banking industry.

The first such trend is digitalization, and local lenders are now trying to find the best digital solutions for their customers.

“Raiffeisen Bank’s priority for the next few

ING has started to grant loans online.

allocate enough resources to comply with all

“Investments in digital have just started.

the regulations that have been or will be ad-

years is to deliver enhanced experience to our

(…) If you want a digital revolution, the entire

opted. So, there are many challenges now for

customers by developing capabilities on three

company must become digital, not just the

banks, that will change the banking industry,”

pillars: digitization, simplification and data.

tech or innovation department,” Robert Ang-

he added.

By doing so, the bank wants to provide its

hel, head of digital channels at ING Bank, said

But this new way of banking comes at a

customers with simpler, faster, more intuitive

last year, during the eighth Focus on Technol-

cost. Lenders in Romania have already cut

banking experiences,” Raiffeisen Bank’s presi-

ogy & Telecom event organized by Business

around 15,000 jobs during the last decade,

dent, Steven van Groningen, told Business

Review.

taking the industry to fewer than 55,000 em-

Review.

Consumers’ greater number of electronic

ployees, after years of breakneck expansion

“We will continue to invest in the digital

devices, the digitalization of payments and

transformation program by starting the de-

the technology enhancing the portability of

velopment of the new internet baking/mobile

identities are some of the trends that will

leaders representing bank employees, who

banking application and also by digitaliz-

shape the banking sector in the years to

claim the digitalization strategy is not suited

ing the internal flows in order to offer more

come, experts say.

to Romania.

products through online channels, like credit

“At the same time, we are developing our

and tough competition for clients.

A strategic mistake, according to union

“Banks think only of preparing for genera-

cards through internet banking and personal

actual mobile banking application, and we

tion Z – kids today have a greater appetite for

loans available on the corporate website

have introduced new biometric methods for

this kind of online, distant relationship with

www.raiffeisen.ro,” he added.

authentication, touch ID and face ID, which

banks. But here, in Romania, we lag behind

But digitalization means a lot of things,

will also be used for payment authorization,

developed markets. I think banks hurried too

and banks have different strategies to imple-

replacing our old method (through card

much to invest in new advanced systems,

ment it. BCR, Romania’s biggest lender in

reader). We want to be a more agile bank and

because the real clients in Romania belong

terms of assets, has launched on the local

we are proposing an increase above the mar-

to generations X and Y, are rather conserva-

market George, the digital banking platform

ket average,” the Raiffeisen Bank president

tive and want to interact with real bankers,”

developed by its owner, Austria’s Erste Group

told BR.

Cristian Mocanu, leader of Impact Union, told

Bank, and turned dozens of branches across

“We are convinced that we can expect

the country into cashless units. Several other

many further changes for which we need to

banks have announced investments in over-

be prepared and we will continue to invest in

preparing for a tough battle with managers to

hauling their digital platforms, notably Raif-

at least three areas: customer relations, train-

save jobs and obtain benefits for workers who

feisen Bank and Banca Transilvania, while

ing, and technology. Equally, we will need to

are made redundant.

Business Review.

Bank employees’ unions in Romania are

www.business-review.eu Business Review | April 2018 May 2016

ENTREPRENEURSHIP COVER STORY 14 27

Dream business: local photo site shoots ahead of rivals through flexibility Local startup Dreamstime has become the world’s largest stock photography community since its foundation 15 years ago. A 100 percent Romanian project that was launched in the US, the site has major clients, such as Samsung, Coca-Cola, Google, Ikea, and McCann-Erickson. Its founder gave BR the bigger picture.

By Georgiana Bendre costs. But things have

needs than its traditional rivals was one of its

improved tremendously

advantages, says Enache. “We bet on digital

since then, and Romania

cameras, despite their lower quality to begin

is now one of world’s

with. We relied on technology to keep costs

best markets both for

down and in fact had AI optimizations from

doing business and

our first year. This allowed us to have a much

hiring talented people,”

smaller staff. A smaller organization reacts

says Enache. “It was

faster to changing conditions in the market,”

great to work remotely

he adds.

because it allowed us to

A

And attractive prices made Dreamstime

be cost efficient while

first choice in its field of activity. “Plus, we

competing with strong

are more selective than our competitors and

companies. This is why

run a better engine, with AI capabilities that

Dreamstime managed to

learn from our customer behavior. We know

compete with no outside

that the market makes wiser decisions than

capital and no invest-

internal staff so we always involve market sig-

ment, and remains to

nals in our editorial process. Search is vital for

this day one of the very

customers. Moreover, we provide customer

few independent stock

support – we speak human! While AI is a great

agencies out there.”

asset, we know that whenever people have a

The company initially had a small photo collec-

question to ask, they feel more comfortable talking to a person. This brings a high level of

lthough Dreamstime has a good audi-

tion, mostly taken by partners of the project.

ence in Romania, very few people

This attracted huge interest because stock

– whether buyers or contributors

images were very expensive at the time – as

in 2017, but it predicts a decrease in income

– know it is here. A crowd-sourcing platform

high as USD 300 for a regular royalty-free im-

for 2018, as well as a slowdown in business

to which photographers, artists, illustrators,

age. With such photos, no additional royalties

growth, mainly due to search engines. As for

videographers and audio artists all over the

are payable per use after the initial outlay: the

the future, the company plans to focus mainly

world sign up, Dreamstime facilitates the

user pays the license fee once and gets to use

on AI.

upload of their work and then markets their

the image for life.

portfolios to its client database.

Its story began 15 years ago, when Serban

Dreamstime’s market share was 30 percent

“The mechanism is simple: register, upload and sell. Also, most people in our team

Enache and his friend and associate Dragos

have consistent stock photography portfolios.

Jianu started it as a side project to their web

This is a company policy; using the product

design company launched in the US.

is vital. It’s how we created Dreamstime and

They focused on the US for many reasons.

loyalty,” Enache outlines.

how we are able to detect market needs.

First, the photography industry was based

Listening to your customers and using your

there and it was where the founders had most

product are a must,” says Enache, CEO of the

of their client database. “In addition, Roma-

company.

nia had a bad reputation for online fraud back

But how did Dreamstime manage to

in the 2000s. Romanian banks were unable to

take on big stock photography providers? A

charge any international cards at reasonable

quicker response and adaptation to market

Dream big • •

• •

Dreamstime currently has more than 20 million registered accounts.

Close to 2 million accounts purchase and download images. It has 400,000 contributors (+5,000 new ones monthly).

It comprises 75 million images selected from almost 150 million submissions.

50 percent of Dreamstime’s submissions were sent in the last 24 months, which shows high growth is still there.

www.business-review.eu Business Review | April 2018

28 TAX & LAW

Tax authorities eye simplification for firms after move on individuals The authorities are looking to consolidate and simplify the payment of taxes for companies after the government decided in mid-March that individuals earning income from independent activities need submit only one form to the tax administration agency, instead of seven.

By Ovidiu Posirca

Left to right: Raluca Buciuc, Colliers International; Adina Vizoli-Alexandru, NNDKP Tax Advisory Services, Madalina Nicola, Noerr Finance & Tax; Viorel Sbora, Atipic Solutions; Ioana Erdei, Business Review

T

he move comes months after the

ments into a single one for individuals report-

individuals that submit their taxes online

government approved a raft of fiscal

ing income from independent sources.

from this year. The tax agency plans to send

“From next year, the statement will be

credentials – such as name and password – to

payment of social security contributions from

made electronically, while this year reporting

each taxpayer in order to boost online opera-

companies to employees and the reduction

will also be done in paper format,” said the

tions.

of income tax for individuals from 16 to 10

state secretary.

changes that included shifting the

percent. Oana Iacob, state secretary at the

Individuals can file tax returns through

Meanwhile, the tax administration agency ANAF is also looking to enhance the training

Ministry of Finance, said during the Tax&Law

the fiscal private space or through the e-

of its staff and improve relations with taxpay-

conference organized by Business Review

Guvernare platform, where a digital signature

ers.

that the government is aiming to “continue

is required.

“You already know that ANAF has started

along the same lines of simplification and

There will be a single deadline for sub-

reduction of red tape.” “After the finaliza-

mitting the single tax statement. The next

tions. Instead, we perform partial inspections

tion of the system for individuals, efforts will

deadline will be July 15 2018 for completing

based on risk analyses. We look at the sums

be initiated for simplification in the case of

the fiscal year 2017 and for the estimate of

declared and give a deadline for compli-

companies, if possible with the consolidation

income for 2018.

ance instead of starting a general inspection.

of some tax statements,” said Iacob.

The minister of finance, Eugen Teodoro-

preventive activities based less on inspec-

This allows us to cut our costs. Both we and

vici, said that 964,166 taxpayers will submit

the business environment feel the need for

AIMING TO IMPROVE RELATIONS BETWEEN TAXPAYERS AND AUTHORITIES

the new consolidated statement. This is used

dialogue in what regards the need to bring

for the payment of CAS (social insurance) and

together all institutions involved in manag-

For individuals, the approved draft bill

CASS (healthcare insurance) contributions.

ing these realities. Because if we study the

includes the consolidation of seven tax state-

The authorities will provide bonuses for

legal framework – the law does not provide a

www.business-review.eu Business Review | April 2018 May 2016

COVER TAX STORY & LAW 29 14

definition of tax evasion,” said the president

tax break, if hired by an IT company. More-

they have prepared the transfer pricing file

of ANAF, Mirela Calugareanu. The ANAF head

over, new companies are exempted for the

directly on the profit tax form that has to be

went on to say that there are plans for the

first two years for revenues over EUR 10,000

submitted to the tax authorities. Sbora said

creation of a Mediation Council that will have

per employee.

this was one of the new measures expected to be enforced.

the right to intervene in fiscal inspections and administration.

“Prepare a coherent transfer pricing policy,

UPDATES OF TRANSFER PRICING AND THE ATAD DIRECTIVE

aligned with the group policy and at ‘market

reconcile the taxpayer and tax body so that

In terms of transfer pricing policy, any

value’,” was Sbora’s advice.

the former cannot challenge the latter in

taxpayer making transactions with affiliated

Meanwhile, Mihaela Pohaci, partner at

court. We are looking around at other coun-

entities must prepare a file that can be con-

PNSA Tax, spoke about the implementation

tries for best practices and we have seen that

sulted by ANAF, said Viorel Sbora, manager of

of the Anti-Tax Avoidance Directive (ATAD).

they have such a thing – the UK and Poland. It

Atipic Solutions.

“The purpose of this council would be to

will include ANAF experts as well as repre-

“Since the second half of 2013, we have

The new measure includes the limitation of deductibility of excess debt-related costs.

sentatives of the professional and business

seen a significant increase in the number of

In order to compute the deductible amount,

environment. We are expecting a drop in the

inspections relating to transfer prices,” said

this cost has to remain below the EUR 3

amount of challenges and litigation,” she said.

Sbora. He added that one market trend is an

million threshold, under the amendments

increase in authorities’ inspections of com-

approved by the Senate. Additional changes

panies with two to three years of consecutive

approved by senators mean that the deduct-

losses.

ibility of debt-related costs that exceed this

In addition, ANAF’s leadership is exploring the creation of a new body tasked with reducing the number of legal complaints sent by the institution to the courts.

Furthermore, ANAF wants to create a specialized training facility for fiscal matters for its employees.

IT TAX BREAKS COLLUDE WITH SHIFT IN SOCIAL SECURITY CONTRIBUTIONS As the shift in the payment of social security contributions moved from companies to employees, a high share of employers decided to increase gross wages by 28.5 percent in order to prevent a reduction in net wages.

“There are few companies that did not actually cover the cost of the fiscal changes. Companies are impacted the same as they were in December, except the IT sector that took a hit,” said Madalina Nicola, head of accounting & payroll at Noerr Finance & Tax. Mihaela Ionescu, CFO of Microsoft, called for increased prudence in the coming months as regards fiscal changes.

“For IT companies, the shift of contribu-

One of the major changes approved last

threshold will be limited to 30 percent of the

year includes the roll out of a dashboard

computation basis. Initially, this figure stood

for all multinational groups with a consoli-

at 10 percent.

Financial institutions are excluded from

tions for tax-exempted employees meant an

dated turnover above EUR 750 million. This

increase in the wage bill,” said Ionescu. Under

includes a comparison tool for the fiscal posi-

the application of these rules, according to

current provisions, employees in the IT and

tion for each entity within the group. It aims

Pohaci. For foreign-controlled companies,

R&D sectors are exempted from the payment

to detect groups that have fiscal optimization

a taxpayer, under certain conditions, will

of income tax.

schemes in place.

include in its taxable base in Romania its

Nicola of Noerr added that tax facilities are

Locally, companies that are part of groups

undistributed revenue proportionally to its

available for employees working for compa-

that fall into this category have to notify the

stake in the company. This would apply, for

nies included in the category of the “creation

authorities regarding the entity that draws

instance, to revenue generated from finan-

of computer programs.” Even students going

up the report. Going forward, large taxpayers

cial assets, royalties or insurance, banking or

to a certified university can benefit from this

in Romania might have the option to say if

other financial activities, according to Pohaci.

30 INTERVIEW

Going international: how Romania’s diaspora can help local start-ups expand Claudiu Vrinceanu, business consultant and initiator of the Start-Up Bridge, has embarked on a quest to help local start-ups think internationally. After meeting with entrepreneurs across Europe, he says that the millions of Romanians émigrés can be one the main sources of support for local business owners that have ambitions to expand abroad.

By Ovidiu Posirca

www.business-review.eu Business Review | April 2018

ABOUT Claudiu Vrinceanu October 2017 to present partner & co-founder of VP Connections August 2017 to present co-founder of Risers Net May 2017 to present senior project manager, Start-Up Bridge Romania December 2015 – January 2017 secretary of state for Business Environment, Foreign Investors, Tourism and SMEs June 2015 – December 2015 manager and editor-in-chief, Wall-Street.ro He holds an MBA in Management, Entrepreneurship and Innovation from Maastricht School of Management.

www.business-review.eu November Business Review | April 2018 2017

INTERVIEW 31

What are the main challenges for local entrepreneurs who want to expand their business outside the country?

Romanian markets and the target ones.

The main challenge for Romanian entrepre-

a significant barrier, especially for smaller

neurs that want to go international has to do

entrepreneurs that want to expand abroad.

first of all with their courage to think and act

Romanian firms need studies and research

globally. We believe that there is a mentality

about business opportunities in international

that keeps us stuck in thinking and acting

markets.

information regarding the target markets is

mainly locally in business. This is why we initiated the project in response to the need

manufacturing and agriculture.

Fifthly, the lack of concrete and updated

Have you talked to Romanians living abroad who are thinking of returning home to start a business? How do Romanians from the diaspora perceive the local business environment from the point of view of opportunities?

I have been in contact with a lot of Romanians abroad, entrepreneurs and managers, who

overcome the mental obstacles that we have

What were the first markets targeted by Start-Up Bridge? Which ones were more receptive to the needs of Romanian entrepreneurs?

when it comes to business. These mindset

The first countries included in the Start-Up

years. Romanians from the diaspora represent

barriers can be easily removed through direct

Bridge program were Bulgaria, Hungary, Swit-

a potential that hasn’t been used yet; they are

contact with entrepreneurs and executives

zerland, Norway and Spain. We identified a

facilitators for Romanian entrepreneurs that

from different business cultures. We want to

high degree of receptivity from the neighbor-

want to expand and I have already invited

help Romanian entrepreneurs to expand their

ing countries, Bulgaria, Serbia and Hungary,

them to join Start-Up Bridge. For instance, in

of Romanian entrepreneurs to cross the borders for regional development, but also to

want to invest in Romania, but also to support Romanian firms that want to internationalize in the cities in which they have been living for

horizons further,

where the main busi-

Madrid we have many start-up founders and

whether this means

ness development

top managers, including CEOs, that know

the vision of the

opportunities exist

the local market very well and can open the

business, the execu-

if we look at the ac-

door to Romanian entrepreneurs looking to

tion or other market

tions of entrepre-

expand in Spain. The Romanian diaspora is a

opportunities.

neurial firms such as

catalyst for the stimulation of international-

FanCourier, MedLife

ization.

Another significant barrier for

and Autonom Rent

Romanian entrepre-

a Car.

neurs that aim to internationalize is

ence to date, I see

Where do you plan to take the StartUp Bridge this year?

an increase in the

The markets tar-

the limited capital, but from my experi-

Does the Romanian state do enough to support companies that have international ambitions?

The Romanian state could get more involved in supporting businesses that want to go international, by implementing smart support programs with a 360 degree range, including

number of financiers and investors interested

geted by the business community around

not just financing, but also access to infor-

and able to finance business scaling processes

Start-Up Bridge this year are Israel, France,

mation and know-how. Through diplomatic

abroad.

Germany and Poland. Aside from the

representation on external markets for the

match-making events organized abroad, one

stabilization of KPIs that can be correlated

is one of the missing dimensions in the Roma-

efficient way to analyze markets is through

with the measuring of the performance of the

nian entrepreneurial ecosystem. This is why

Start-Up Bridge Meetups, events where we

business environment abroad. By engaging

I believe that in the coming years we should

analyze case studies of Romanian entrepre-

in dialogue with entrepreneurs that want to

train Romanian middle-managers that are

neurs that already went international. For

internationalize, for instance by creating a

specialized in international markets starting

instance, SaladBox has already expanded in

club/group of firms available and interested in

from the experience of Romanian firms that

Europe and North America, while eMAG went

international expansion.

are already international and send their own

to Bulgaria, Hungary and Poland. These com-

employees to the new external markets cur-

panies are already part of the Start-Up Bridge

rently being developed.

community and provide support, know-how

Thirdly, access to people and skills abroad

Fourthly, another challenge is access to partners and organizations that can enhance

and access to information for entrepreneurs interested in internationalization.

the development abroad: chambers of commerce, embassies, hubs, consultants and law-

What relationships does Start-Up Bridge have with financing organizations (banks, venture capital funds, angel investors, stock exchanges) that could help local companies expand?

These financiers represent one of the most

more aware of the role of business communi-

From what fields are the entrepreneurs interested in expanding their businesses abroad?

ties and of platforms for match-making and

Entrepreneurs that want to expand their com-

Start-Up Bridge, and a growing number of

consultancy that can create bridges between

panies abroad mainly come from technology,

investment funds attend our meetings.

yers. Romanian entrepreneurs are becoming

important actors in the internationalization ecosystem. Banks are already involved in

32 BR AWARDS

www.business-review.eu Business Review | April 2018

Praising excellence in the local business environment The 13th edition of the Business Review Awards Gala, BR magazine’s flagship event, celebrated this year’s most dynamic entrepreneurs, executives and companies that have continued to innovate and bring their positive contribution to the local market.

By Anda Sebesi

Business Review Awards Gala, 13th editon

Carmen Uscatu and Oana Gheorghiu from Asociatia Daruieste Viata, winner of Best Community Development initiative for NGOs category

Marius Ghenea, partner 3TS Capital, Jury President

Affan Yildirim, general manager of Anchor Grup handed out the award to Mona Nicolici from OMV Petrom, the winner of Best Community Development Initiative for companies category

www.business-review.eu Business Review | April 2018 May 2016

COVER BR AWARDS STORY 33 14

Representatives from UiPath, winner of Commitment to Innovation category

Representatives from Alba Iulia Municipality, winner of Local Smart Initiative category

Steven van Groningen, president and CEO of Raiffeisen Bank Romania

Mihai Toma and the Dacika Project

Iulian Stanciu, CEO of eMAG, winner of Entrepreneur of the Year category

Winners of the 13th edition of Business Review Awards Gala

www.business-review.eu Business Review | April 2018

34 TWENTY YEARS IN REVIEW

Having a moment…20 years in the making Last month at the Business Review Awards Gala at the Radisson, I referenced the fact that many attendees would not remember our first such Gala in 2006, much less the launch of Business Review back in 1998, exactly 20 years ago. Such is the changing face of the Romanian business community, leaders and entrepreneurs.

By Bill Avery long time. We proudly celebrate our many innovations, best practices and most importantly, our leading standard of editorial integrity, all of which were vital to our success. We celebrate the fact that we are remain the largest English-language platform and source of business news in Romania – by a large margin.

Speaking of moments, I am very proud to announce Business Review has a new majority partner, Ionut Georgescu, and his team at Flat White Economy Investment, the group behind the FEPRA recycling company and the Digitaljobs.org site.

We welcome our new partnership with Ionut and Flat White since he not only understands the BR legacy but also is accelerating our development strategy so that we can remain the most robust and fast-growing

I

player on the market. With Flat White’s help, Business Review will continue to identify and

n Bucharest, what I saw in 1998 was a

exciting time to be a Romanian entrepreneur!

tell the stories of the new generation of Ro-

‘Wild East’ dominated by a few well-

The Romanian economy is among the fastest-

manian entrepreneurs, as well as continuing

connected businessmen, focused on

growing in Europe, technological innova-

to uncover new investment opportunities for

privatizations and government contracting

tion is at our doorstep and capital is finding

Romanian and International investors.

largess. What I see now is a new, more dem-

worthy businesses to support in more creative

ocratically-distributed generation of young

ways than ever. Just take a quick look at our

that I have become the full-time Executive Di-

entrepreneurs, less concerned with ‘pila’ and

exclusive cover story this issue about UiPath.

rector of Alianța, the four-year old organiza-

patronage and more focused on their own

When we broke the story on this investment

tion of Americans and Romanians working for

capabilities and digital resourcefulness, and

last month, we asked: Whoever heard of a

strong ties between the two countries, based

taking their own government to task over fair-

Romanian company being treated the same

in Washington D.C.

ness, transparency and good governance.

as any other Unicorn coming out of Silicon

Twenty years ago, I saw a fleeting opportunity to bet on Romania, when most serious

Valley?

We ALSO celebrate this year 2018, along

I personally am also proud to announce

I am honored to have this opportunity to support Alianța’s ambitious growth plans. I will offer the same dedication to building up

investors would give it a pass. I saw a country

with all our Romanian friends, family and

Alianța as I did to my other activities related

heavy on spirit and light on process. I saw a

colleagues, the Centennial of Romania – 100

to supporting Romanian-American business

runway to EU Accession and NATO member-

years as a modern unified nation. Romania is

and cultural links. I’m looking forward to re-

ship that would support and moderate the

having a well-deserved moment this year.

turning to the front lines of telling Romania’s

political class towards the West. I saw the op-

Business Review is also having a moment.

story, this time from the other side of the At-

portunity because I was here on the ground.

This year we celebrate our own longevity

lantic. Indeed, 2018 is shaping up to be quite

And I met people, a few other entrepreneurs

through the ups and downs of the Romanian

an extraordinary year, and I’m so pleased you

with spirit and a sense that important things

experience. We celebrate the relationships

are with us, and that you continue to support

were in store.

and trust that come from working closely

our efforts to keep telling the stories of the

together and keeping our promises for such a

Romanian business community.

And now, we’re finally here. It’s such an

www.business-review.eu Business Review | April 2018

TWENTY YEARS IN REVIEW 35

‘The 90s: economic growth powered by lawlessness’ – CEC president Everyone wanted to do business in the early 90s, in a wannabe capitalist jungle where no rules applied but the law of the strongest and the most connected. If trading was a hit in the early years of capitalism, very few businesses won the battle with inflation and unpredictable exchange rates. Only the visionaries made it, said the president of CEC Bank, Radu Ghetea, in an exclusive interview with Business Review.

By Ioana Erdei How would you describe the first private Romanian businesses built in the early 90s?

Major steps have been made in the last 28 years. In the 90s, everything moved really fast because people were eager to do things that had been banned until then, more exactly, building a business, making their own decisions. Let’s not forget that Romania, during the communist period, had no private sector. But very few businesses managed to keep up and develop into a success story. For those who made it, it’s thanks to the perseverance and vision of the owners.

I had the chance to work closely with the private sector from 1994, when I left the Romanian Foreign Commerce Bank and transferred to Alpha Bank, where I worked for 13 years. The main issue that the economy was facing back then was the lack of regulation. Even the banking system had issues in registering the financial operations carried out by private companies. There were specific regulations for state-owned entities, but none for the private sector. I remember that business owners came to the bank with a bag full of money, demanding a currency exchange for lei to dollars or the other way around. The rules applied were different from one bank to another.

Why were there different rules for different banks?

The exchange rate was set by the National Bank, but everyone tried different approaches in favoring different transactions in order for companies to be more or less protected by the inflation rate that was huge and unpre-

www.business-review.eu Business Review | April 2018

36 TWENTY YEARS IN REVIEW

dictable at that time. I remember years when inflation was at 300 percent. The exchange

to the banks with interest.

But the reason the country was in this

holders and helped the state to prepare the company for privatization.

rate for the dollar started at ROL 21 and,

situation was because, after the fall of

when the denomination of the leu occurred,

communism, everyone stopped working,

one dollar was worth ROL 38,000. Everyone

believing that capitalism would bring wealth

wanted to export their products back then.

just like that to the economy. Productivity

Did local businesspeople have enough resources to be able to buy a state-owned company?

And it’s a trend that we still see today.

was close to zero. A second opportunity came

Private capital was almost nonexistent at that

along then, for entrepreneurs, and for the

time. Most of the entrepreneurs developed

ing a product from one market to another,

economy – taking over bankrupted state-

their businesses step by step by borrowing

without any added value, is temporary

owned companies.

money mostly from friends and family. There

Some entrepreneurs understood that trad-

business and they started production. A positive example is Mobexpert, a company

wasn’t and there still isn’t a bank lending solution that finances the purchase of stock.

that took advantage of a market opportunity

How was the privatization of the stateowned companies handled?

at that time. Specifically, there were no good

There were hundreds of state-owned com-

to buy a state-owned company accumulated

quality Romanian office furniture products.

panies that had too many employees, and

capital from commercial activities in the

Mobexpert was the first in the industry that,

the production no longer had a market, and I

early 90s.

apart from importing office furniture, bought

am referring to the Middle East and socialist

a furniture factory and started production for

countries like North Korea, Cuba, Nigeria and

time, lending offers were practically non-

export.

Somalia. Some of these countries never paid

existent. Before 1990, corporate loans for

There are lots of examples

for the merchandise they acquired. The

The Romanian businessmen who were able

People needed bank loans. But, at that

state-owned companies were

of entrepreneurs with

positive outcome from chang-

healthy initiatives that

ing market conditions is

investment plan. After

the fact that exports

the communist re-

stood out from the

based on a multiannual

beginning of capital-

based on debt were

gime fall, every bank

ism. The businesses

stopped. It was a

had its own way and

that were based only

complicated time

criteria for offering

on imports and sales on the local market disappeared one by one because they couldn’t win the battle with the exchange rate and inflation fluctuations.

The leu-dollar exchange rate was liberal-

back then, and only those that had vision knew how to take advantage and evolve.

There were three main ways in which privatizations were done in Romania:

loans to companies and individuals.

And this is why some financial institutions went bankrupt, because they didn’t calculate the default risks

where the employees became shareholders,

properly. Years later, at the beginning of the

ized in 1997, and the day after the announce-

but the directors or engineers of those com-

2000s, corporate lending products started

ment was made by the prime minister at that

panies managed to buy up most of them and

to target production for existing companies.

time, Victor Ciorbea, the rate almost doubled

become majority shareholders; where foreign

The financing of agriculture started late,

from ROL 4,000 to ROL 7,774. That was the

corporations came and bought the local com-

after Romania became a member of the EU,

market value of the dollar, and until then,

pany – like Erste Bank’s takeover of BCR; and

and subsidies began to be paid to the farm-

the National Bank, according to regulations

where some local businessmen managed to

ers. Until then, agricultural businesses were

in that period, kept the exchange rate at ROL

buy some of the state owned companies that

ignored by the banking system.

4,000. It’s an important and interesting case

were for sale.

study to get an understanding of the regula-

In my opinion, the privatization of state-

tions and laws that determined the role of

owned companies was more of a demonstra-

When did banks start to see local businesses as potential clients?

the National Bank then.

tion of resilience by the Romanian authorities

I think it started slowly with the local finan-

in order to get into the NATO Alliance and

cial institutions before privatization, and

National Bank took two club loans of USD 100

the EU. The privatizations were considered a

continued with the foreign banks that came

million and USD 150 million from the local

step toward a capitalist market. For example,

to Romania later. They realized once they

banks in order to pay the country’s external

EBRD would agree to grant a loan to a certain

started to operate in Romania that there was

debt. I would say that this amount was pretty

state-owned company provided that it was

demand for a new banking system, because

small for a country but the national reserves

privatized. When it comes to BCR, the sce-

the economy started to grow. But the local

were almost gone, and if the country couldn’t

nario was the same – before the privatization,

banking system has changed over the last 20

pay this sum the situation was not good. The

the EBRD and IFC (the investment division of

years, thanks to the tight and constructive

National Bank paid the whole amount back

the World Bank) became minority stake-

relations between foreign and local banks.

I should remind you that in June 1996, the

www.business-review.eu Business Review | April 2018

TWENTY YEARS IN REVIEW 37

There have been occasional misunderstand-

between a bank and a start-up, because the

encourage and support investment projects

ings, but there was a common goal: to build

government takes on the default risk. The

in small towns and villages in Romania.

a solid, healthy banking system. Also, the

more programs developed, the closer young

National Bank played it strict when it came

entrepreneurs are to being financed by finan-

to regulations. It’s true that the first target,

cial institutions.

in terms of clients, were individuals. And the interest rates were huge at the beginning:

Would CEC Bank be interested today in taking over a new private bank?

Until now we have based our strategy on organic growth. Acquiring new portfolios

over 2001-2002 loans had 30-40 percent

What kind of companies does CEC Bank finance?

interest rates.

Except gun production, we have no restric-

point. It is not easy to merge two different

tions in terms of economic activity. We

When did financing start-up companies become interesting to the financial system?

choose to analyze the business plan very carefully no matter the activity. We have a large range of lending

or entities could be a viable option at some financial entities. In the last 11 years, we have managed to have a positive turnover, without losses. We also increased the share capital

by EUR 122 million. Our market share grew to 7.42 percent in 2018, from 7.16 percent in

To this day, a finan-

products for SMEs

2017. Last year we were the seventh biggest

cial institution will

and small agricultural

bank in the system. The new loans value is

not grant loans to

businesses. We also

at RON 6.6 billion and the loan balance is at

start-ups without

finance projects de-

RON 17 billion. Individuals represent 33.5

bank guarantees. But

veloped by small local

percent of our clients, SMEs 40.1 percent,

the more financial

administrations. These

public administrations 19 percent and large

aid is provided through

are not very attractive

companies 7.4 percent. Our goal in the last 11

national or international

to other financial institu-

years has also been to increase the volume of

programs, the more access to

tions, which target only large

corporate clients, especially SMEs. The gross

administrations, and the competi-

profit for 2017 was RON 222 million and the

entrepreneurs will have financing facilities

tion to land these accounts is fierce. But we

bank solvability is at 14 percent. It’s a good

if they present guarantees. The Start-up Na-

think that the default risk for any public

indicator of the bank’s stability but also a

tion Program helps facilitate a relationship

administration is fairly small, and we want to

very big responsibility.

lending new companies have. Young

38 TWENTY YEARS IN REVIEW

Pegas: born communist, rebuilt capitalist With an estimated turnover of EUR 2.5 million this year, Pegas aims to extend its chain of stores and raise money to open a factory. Andrei Botescu, co-founder of Atelierele Pegas, tells Business Review how the old communist symbol has been reborn as a fresh brand that has caught the attention of today’s young cyclists.

By Anda Sebesi

www.business-review.eu Business Review | April 2018

ABOUT ANDREI BOTESCU CO-FOUNDER OF ATELIERELE PEGAS he is the man behind the revival of the iconic Pegas bicycle, many a Romanian’s favorite childhood buddy. Relaunched in 2012, under his supervision, in 2017 the company managed to get a complete portfolio for each and every category of bike, from urban to e-bikes.

www.business-review.eu Business Review | November April 2018 2017

TWENTY YEARS IN REVIEW 39

How do you see the new generation of Romanian entrepreneurs and how is it different from the old one?

prove that their ideas can be implemented.

in an extremely competitive business and in

It is similar to Pegas in its early stages, six

a country where consumers don’t invest in

years ago. As for the situation in the 90s, I

buying bikes. Despite this, we have managed

I wouldn’t call it the “old generation of entre-

think that the courage to build something in

to increase both our sales and our portfolio of

preneurs” because 20 years ago there were no

Romania, in an unfriendly and permanently

Pegas bikes and accessories every year.

business schools or internet where you could

changing business environment, is the only

learn good practices in business or entrepre-

constant thing that links the generations of

neurship. Even now we don’t have a solid

Romanian entrepreneurs.

academic base to train people in the business field. Instead, we have probably tens of thou-

How was Pegas positioned in the past and how is it now?

Under communism, it was clear that Pegas was a folks’ bike, because all the advertise-

your start-up idea, and so models from which

How does the new generation of entrepreneurs see the local economy and the Romanian market now?

you can learn.

I think that the new generation of entrepre-

Now we can talk of the folks’ bike again, as in

neurs, including us, banks very much on

2017 we managed to cover all segments of the

ties to study business and benefit from men-

the new economic models, like the shared

bike market: bikes for kids, for longer rides,

toring because there are many people eager

economy. They are much more careful about

for mountain biking, electric bikes, tricycles

to mentor you for free. The new generation of

the environment. They are more responsible

and cargo bikes for kids and adults.

entrepreneurs comes with both much more

with regards to the future – an increasing

self-assurance and more relevant and realistic

number of businesses in the renewable and

business plans along with an international

rechargeable sectors are emerging.

sands of case studies of businesses similar to

In addition, there are plenty of opportuni-

dimension to their business. They think of it at an international scale from its early stages.

ments had the same communication message back then. Plus, it had a diversified portfolio.

How much have you invested in the business so far and what are your plans?

Investment is an ongoing process for Pegas, from opening new stores to processing new

How do you think that business opportunities have changed in the last two decades in Romania?

You transformed a symbol of communism into a fresh brand which the young generations use without making the connection with the past. What was your strategy to achieve this and how long did it take?

Now we have access to information via the

Pegas used and still uses the perception from

Bucharest and nationwide, with another ten

internet and it’s much cheaper to travel

the past: we speak about the best-known

Pegas mono stores. We also intend to extend

worldwide and easier to relocate your busi-

Romanian bike, Pegas, with the easiest way to

our chain of stores through a Pegas franchise,

ness according to your interests. The free

recognise its main detail – its long saddle and

a turnkey business that we relaunched and

circulation of goods and being a member of

horn-shaped handlebar. We also speak about

which is starting to take shape.

the EU community help a lot. I think that

communist models that have been reshaped

mobility – both of individuals and goods and

using the latest technologies in the bike in-

Have you accessed any financial sources?

services – is the best word to describe this

dustry. Last but not least, we speak about the

The first major financing came from Network

change of business opportunities.

symbol of Pegas, the winged horse that has

One Distribution, in October 2015, when it

super powers. This is what we’ve managed

took the majority stake in Pegas. Now we are

In your opinion, what main principles governed businesses 20 years ago? How different is the situation now and what are your business principles?

to do: keep the interest in a product that had

looking actively for new ways to finance our

disappeared from the market. Pegas was and

Pegas factory and research lab for which we

still is a product loved by the public – both

intend to access EU funds.

I truly believe that planning is the key to suc-

design and new technologies who understand

cess. Since its beginning, Pegas has benefited

that beyond an easily recognizable bike there

Is it easier for entrepreneurs to access money now than 20 years ago?

from medium- and long-term planning. We

are many hours of research so that the Pegas

Yes, if you are inclined to invest time and en-

had a design team that helped us to prog-

bike is in line with all the other international

ergy in a large project in order to get European

ress with our range of bike models and have

cycle brands. This communist symbol still

funds or you are convinced enough that your

original products which, in time, assured us

offers us the greatest international awareness

business is extraordinary and you manage

tional players design. We aim to conclude the investments plan for our Pegas factory by the end of this year, along with our expansion in

nostalgic individuals and those interested in

our identity in the bike industry. We chose to have a permanent design department even

bike models, in line with what large interna-

to attract business partners that have both expertise and financial capital to support your

•

Established: 2011

•

Initial investment: EUR 70,000

nesses that the mass media promotes now,

•

Total investment: EUR 5 million

business on its feet. Last but not least, crowd-

the majority of them seem to have a young,

•

2016 turnover: EUR 1.5 million

funding is now a valid option – both locally

enthusiastic team that have some financial

•

2018 estimated turnover: EUR 2.5 million

and globally – along with block chain and the

though, in general, there is no need for this.

If I take a look at the entrepreneurial busi-

capital at their disposal and who want to

ideas. In addition, there are plenty of small venture funds that can help you get your

future coin.

40 ADVERTISING

‘We need more outstanding CEE projects getting recognition at international festivals’ McCann Bucharest has taken the number two spot in Contagious Pioneers 2018, the prestigious magazine’s global ranking of the top performing agencies. This is the first time a Romanian agency has made the list. BR talked to Catalin Dobre, recently appointed regional creative director at McCann CEE, about his new role and goals in the position.

By Romanita Oprea

www.business-review.eu Business Review | April 2018

ABOUT Catalin Dobre Chief creative officer at McCann Worldgroup Romania and regional creative director at McCann CEE He started working in advertising as a copywriter, 15 years ago. In 2017 Dobre was named regional creative director for McCann CEE and his first accomplishment was winning the Golden Drum 2017 Network of the Year distinction. More recently, he has also started teaching at the ADC School in Bucharest.

How did your new position come about?

Were you expecting it?

I started 2018 with this promotion in the network and I’m looking forward to investing time and energy in taking the creative culture in the CEE region to the next level. I was already in close contact with the creative directors in the region, developing some interesting projects together; therefore the role follows this process of development.

What does the new job involve?

My ambition is to build a creative culture based on the strongest values and highest ambitions. It needs to be a culture that generates famous work for our clients. Work that makes a difference, work that travels and places CEE on the hot map of the most creative places in the world. This way we will be able to attract more and more talent from around the globe, creatives who can bring diversity and enrich this culture. We have a problem with the “brain drain” in CEE. We need to stop it in order to grow as a region.

We need to be, without a doubt, the network where ambitious people need to come in order to have the best chance to do great work.

How will it change your everyday work?

How much time do you think you will be spending in the offices abroad?

I’m still based in Bucharest and I’m keeping the position of chief creative officer at McCann Bucharest. So I have a strong focus on the local business. At the same time, I’m organizing my time in such a way that I can be involved in the important projects at a regional level. We are building a very collab-

www.business-review.eu Business Review | April 2018

ADVERTISING 41

orative network so we are approaching the big

where we have the Network of the Year title

battles as a group, as a creative community. I

to defend and, of course, Eurobest.

would spend one day a week in every office, but this is impossible. I try to visit as often as I

Do you believe that technology will totally blur those differences one day or not?

Technology is just a tool. A tool that gives us access to great opportunities. But, in the cre-

can and to “creative huddle”, working on dif-

What are McCann’s star countries in CEE besides Romania and why?

ferent projects. Today we also have technol-

Lately there is work from Prague, Belgrade,

is powerless. People are the ones who need to

ogy helping us avoid some plane journeys. So,

Milan, Tel Aviv and Warsaw getting some big

make the most of technology, to give it value.

even though I prefer live interaction, I must

distinctions in festivals. Also, I have seen a lot

I would say that technology should help us

admit I also “visit” a lot through Skype.

of ambition and very interesting ideas from

promote and maintain our creative identity.

ative industries, technology without insight

across the region and it’s just a matter of time

What are the first decisions you have taken?

until we see winners coming out of more and more countries.

The first thought is to invest some time in the “creative relationship” in the region. We’ll

What were the weakest points that you want to improve and how will you do it?

It’s all about the people. I want to see McCann in CEE as the sexy destination for creatives

directors on a regular basis, hosted by dif-

What do you believe distinguishes CEE from Western Europe when it comes to advertising nowadays?

ferent agencies across CEE. It’s essential to

I always like to say that here, in the region,

the big Western city lifestyle and this is push-

spend time together, to grow the work, to

we are lucky enough to have a lot of prob-

ing them to make a career move. Sometimes

spot opportunities, to learn from each other.

lems! Because each of the problems can be

they are underestimating the advantages of

We are making a habit out of this.

the start of an amazing idea, as it forces us to

the region, where you can have a great com-

come up with a smart solution. We learned

bination between the opportunity to produce

What are your plans and goals for 2018?

this the hard way as we grew up in this part

solid work for both local and international

We need to see more outstanding projects

of the world. We needed to find solutions to

clients, a shorter time for the work to get

coming from the region getting recognition

our everyday problems and this trained us

produced and a really good quality of life that

in international festivals, and I’m putting

as creatives. It made us more inventive. We

is not as expensive as in the West.

in place a system that allows us to grow the

got used to looking for the non-traditional

I’m considering a branding campaign for the

work. It’s early in terms of preparations, but

approach, for the lateral ideas. And you can

region and, maybe, in the future even starting

ideally I would see this year’s Cannes Lions

see this as a red line in the work coming from

an advertising school that can grow both local

as the first milestone. Then, Golden Drum,

the region.

and international talent.

restart planning meetings with the creative

worldwide, but we are fighting the brain drain. Talented young people are tempted by

www.business-review.eu Business Review | April 2018

42 CINEMA

Casting a wide net: Romanian actors dream on To mark the Gopo Awards, the local version of the Oscars, due to place at the end of March, Business Review took a look at the film industry’s casting process, how rising Romanian stars get their international breakthrough, and some of Hollywood’s household names with a local connection.

By Oana Vasiliu a breakthrough in film, indifferent of age or career to date.

The actors are given brochures, photographs, films and videos made by a professional studio, they participate in workshops and meetings and they are introduced to the public, journalists and industry movers and shakers – directors, Romanian and foreign producers, casting directors and agents.

Business Review asked Iulia Popovici, theater critic and 10 for FILM jury member, about Romania’s up-and-coming silver screen icons.

Popovici says she is wowed by actors “several times a year on stage, but I have to say that being a very good theater actor doesn’t make one a good film actor. I know several extraordinary stage actors who perform quite badly in cinema. It does happen once in a while in movies too, depending on the local productions in a given year.”

Ready, steady, action: the Romanian film industry

Asked why more Romanian actors don’t appear in international movies, she says that acting is the only language-based, culturally-

THE CASTING PROCESS

HUNTING RISING STARS

dependent artistic activity – language plays a

Casting directors are among the most pow-

One notable project to unearth new Roma-

more important role here than in literature,

erful figures in showbiz, able to make or

nian talent is 10 for FILM, held each year at

say, since one can mask an accent in writing

break careers. But what exactly do they do?

the Transylvania International Film Festival

but not in acting. “It’s a constant issue we

Domnica Carciumaru, managing partner at

(TIFF) since 2012, which introduces ten re-

have at 10 for FILM: should we or shouldn’t

Dcasting, says auditions, callbacks – and mak-

markable, but as yet undiscovered Romanian

we select a (very good) Hungarian-speaking

ing great discoveries.

actors, to film audiences and professionals.

actor knowing his/her chances here are lim-

Spotted in the theater or in minor movie

ited by the mere fact that Romanian cinema

some secrecy, casting directors read the script

roles, they are given a professional portfolio

doesn’t offer many parts for characters speak-

and liaise with the director, as they seek the

and a chance to impress. In a country where

ing with an accent?”

perfect actors for each and every part, from

cultural life is concentrated in the capital and

starring roles to extras. They find the right

a few big cities, aspiring performers from

world (90 percent, I would say) became

actors for plays, TV series, adverts and films,

outside these areas struggle to get a break.

famous acting in their native language – and

and they stand between every young actor

The main purpose of 10 for FILM is to shine a

they have an international career because

and their big break.

spotlight on impressive stage actors seeking

they work in internationally relevant cinema.”

Although the casting process involves

She adds, “Most of the top actors in the

www.business-review.eu Business Review | April 2018

CINEMA 43

GOING INTERNATIONAL Marcel Iures is still the most obvious Romanian actor to feature in American

Hollywood stars with Romanian roots

blockbusters. His US film credits include The Peacemaker starring George Clooney, Mission: Impossible (1996) with Tom Cruise, and Interview with the Vampire: The Vampire Chronicles (1994) starring Cruise (again) and Brad Pitt. More recently there is also Anamaria Marinca, who started her international career in the Channel 4 film Sex Traffic, for which she won the British Academy Television Award for Best Actress.

More recently, there has been Ana Ularu’s success in Hollywood; Alec Secareanu’s triumph on the international and European

Sebastian Stan His movies include: Captain America: The Winter Soldier, Ant-Man, The Martian, Captain America: Super Soldier, Captain America: First Avenger, Gossip Girl, Hot Tub Time Machine and The Avengers.

Harvey Keitel He was born into a family of actors who originated from Poland and Romania; his mother was from Braila. His movies include: Reservoir Dogs, Taxi Driver and Thelma and Louise.

Dustin Hoffman One of America’s top actors, his many accolades include Academy Awards for Best Actor in 1980 for Kramer vs. Kramer, and in 1989 for Rain Man. His Jewish parents fled Romania for the US.

Bela Lugosi The Hungarian-American actor, who played Count Dracula in the 1931 Vampire-horror film Dracula, was born in Lugoj, not far from Transylvania, the land of the iconic movie vampire.

Natalie Portman Her great-grandmother on her father’s side was born in Romania. Films include: Closer, Black Swan (for which she won an Oscar) and V for Vendetta..

Stan Lee The parents of the American comic-book writer, publisher and media producer were Romanian-born Jewish immigrants.

Elsa Pataki With a Romanian mother, the actress is fluent in both Romanian and Spanish.

Johnny Weissmuller Born in Timisoara in 1904, he was the first actor to play Tarzan.

market with God’s Own Country, described as a poem made into a film script; and director Adina Pintilie’s Golden Bear for Touch Me Not. However, critics say there still isn’t a consistent list of names of Romanian talent recognized worldwide. Popovici says, “Unless they want to play trafficked women or other immigrants, Eastern European actors are not usually given leading roles in non-Eastern European movies. Romanian actors will get an international career and stardom the moment Romanian cinema really goes international, as Adina Pintilie’s Touch Me Not may do.”

Secareanu of God’s Own Country told BR about his first international audition experience. “I found out about the casting at the end of 2015 from my Romanian agent at that time. (Director) Francis Lee was searching for a Romanian actor and worked with Domnica Circiumaru, the casting director. She proposed me, and asked me to film myself for the movie. A month later, Francis came here to meet some of the actors filming samples, and I was among them. After a few weeks, I was called to London with two colleagues to read for the part with the other main actor in the film, Josh O’Connor, a sort of test of the ‘chemistry’ between us, and it seems to have gone pretty well since I passed the test! But the fact that I had to fly to London to audition made me feel a lot of pressure at the time.”

Carciumaru adds, “We don’t have a lot of Romanian actors in international movies because they don’t have international agents to promote their work. Agents work to always get the best possible deal.”

www.business-review.eu Business Review | April 2018

44 EXPAT EYE

Snow joke as Facebook data scandal reaches Romania In our monthly look at life in Bucharest and Romania through the eyes of a foreigner, BR’s resident expat considers the role of the country in the latest international political scandal, and (being British) can’t pass up an occasion to talk about the weather.

By Debbie Stowe

I

moved to Bucharest five years before its EU accession. Back then, Romania was desperate to integrate into the European

business scene. Well, it got its wish! Just this week, for example, it came to light that the highest profile British consulting firm of the moment has done business locally.

What a pity that the company in question is Cambridge Analytica, the shady operators accused of harvesting our Facebook data to help put the US – and its nuclear codes – into the hands of an unhinged reality TV buffoon, and send the UK crashing out of the EU and back to the dark ages, among other misdeeds.

Yes, sadly it seems that whenever there’s an international furor, Romania is dragged

it stands proudly alongside major countries

that I hadn’t put sun cream on the children.

into it. There were Romanians named in the

such as the US and (for now) the UK, queuing

And then another volte face: just when I

Panama Papers of 2016, and even the horse-

up to pay companies like Cambridge Ana-

was about to put the winter clothes away for

meat scandal of 2013 was blamed (unfairly, it

lytica for access to our data, so it can make

another year, the snowstorms were back and

turned out) on local abattoirs.

everything worse. Every cloud has a silver

Bucharest was once again under a thick white

lining…

blanket – which soon became a thick brown

Cambridge Analytica is (allegedly) pro-

blanket thanks to the traffic pollution.

Trump, pro-Putin and pro-Brexit. So have

Here it’s not just the low temperatures

a guess which players on the Romanian

COLD COMFORT

political scene it might favor. Goodness, it’s

On the topic of weather, it’s hard to have a

and slippery surfaces that we have to worry

only the PSD! Who would have thought it?

conversation these days without mention-

about, though. “Atentie, cade tencuiala!”

The dodgy outfit that has (allegedly) had a

ing the Bucharest climate, which seems to

signs around the place warn of the treacher-

tentacle in all the major adverse international

have undergone more changes in the last few

ous icicles that form on the edge of buildings,

electoral outcomes of recent years is (alleg-

weeks than the Trump administration.

which, once the days become a little warmer,

edly) on the payroll of the PSD!

I flew back to the UK before Christmas,

start to melt and then plunge to the pave-

smugly thinking that I’d be escaping the bit-

ments below. If you’ve done much walking in

a story of modernization and economic

ter Eastern European winter for the milder

Bucharest in winter, you’ve likely seen these

advancement. Where once the best crooked

climes of England – only for Britain to freeze

icicles, or even just large clumps of snow and

local politicians could do was low-tech elec-

while friends back in Bucharest were saunter-

ice, plummet to the ground ahead of you,

toral fraud like bussing country folk around to

ing around in t-shirts in 15 degrees.

or over the road. Find yourself in the wrong

But let’s look at the positives. This is

vote in multiple jurisdictions, or implement-

Then the “beast from the east” delivered

place at the wrong time, and it could be fatal.

Fortunately, at the time of writing, the

ing laborious procedures so members of the

playing field-leveling blizzards across the

diaspora queued for hours without being able

continent, courtesy of Siberia (those Rus-

weather is set to warm up this week. But a

to cast a ballot, now the shenanigans are far

sians, again!).

week is a long time in the life cycle of the

more sophisticated.

And while Romania once considered itself a minnow on the international stage, now

Just when I was getting used to the frost,

Romanian climate at the moment. You might

the temperature shot up, and I was left carry-

be reading this while lolling on the grass in

ing around all the winter gear, feeling guilty

Herastrau – or snowed in at home.

www.business-review.eu Business Review | April 2018

FILM 45

Three Billboards Outside Ebbing, Missouri FILM REVIEW

By Debbie Stowe – plays the victim’s mother, Mildred Hayes.

DIRECTOR: Martin McDonagh STARRING: Frances McDormand, Woody Harrelson, Sam Rockwell, John Hawkes, Peter Dinklage ON AT: Movieplex Cinema, Grand Cinema & More, Happy Cinema, Cine Globe Titan, Hollywood Multiplex, Cinema City Cotroceni, Cinema City Sun Plaza, Cinema City Mega Mall, Cinema City ParkLake, Glendale Studio

C

With no arrests seven months on, she decides to take matters into her own hands, and rents – well, you can probably work out what she rents from the literalist title – to spur the local police into action.

While the other residents of her Midwestern backwater pity Mildred for her loss, her provocative action divides the town, in part because the popular police chief (Woody Harrelson) is going through his own problems.

inema plots don’t get much more

The billboards have a profound, some-

emotive than the murder of a child. At

times transformative, effect on everyone

the same time, the slayings of pretty

linked to them, from Mildred’s awkward

young women and the police’s attempts to

teenage son and abusive ex, to the staff of

catch their killers are standard film fare.

the advertising company responsible for

So it’s testimony to the singularity of

them, the officers accused by them (notably

Martin McDonagh’s movie that it manages to

racist deputy Dixon, Oscar-winningly played

justice and closure at its heart will be disap-

be a laugh-out-loud funny film about child

by Sam Rockwell), and the townsfolk, who

pointed.

murder, and show practically nothing of the

alternately rally round or condemn the griev-

cops’ hunt for the murderer, despite this be-

ing mother.

On the downside, there’s too much swear-

ing the premise.

Frances McDormand – who won the Best Actress Oscar for her striking performance

Instead, this is an almost indefinable film, about redemption and forgiveness, against the backdrop of American race relations. It’s

ing, and anyone expecting a conventional

wickedly funny, deeply moving, inspiring,

murder mystery or police procedural with

bleak, hopeful, and unforgettable.

The Workshop (L’Atelier) FILM REVIEW

By Debbie Stowe to the audience an outsider: Antoine (Mat-

DIRECTOR: Laurent Cantet STARRING: Marina Foïs, Matthieu Lucci ON AT: Elvire Popesco

A

thieu Lucci), a white boy from a lower-income background. He’s not a bad kid – we see him affectionately caring for his cousin’s little son and his family life isn’t unhappy. He’s

diverse group of French teenagers

also dedicated enough to the workshop to

gather in a languid port town for a

go home and read the books of group leader

across each other half-dressed, hint at a cer-

summer writing workshop, hosted

Olivia (Marina Foïs).

tain chemistry or mutual fascination between

by a successful Parisian novelist. They could

But his social circle is clearly from the

serve as a microcosm for modern France – or

wrong side of the tracks, he’s flirting with

even Western Europe. All major communities

low-level criminality, his social media use

tween the development of the writing project,

are there: black, white, Muslim, middle and

would ring alarm bells, and some of his

and the author’s interaction with the troubled

working class.

contributions in class concern and anger his

teen. It’s a topical movie, with a focus on

fellow students for their provocative alt-right

pressing contemporary themes of identity

tone.

politics, race, and social justice. While it’s

Like many teens, they’re passionate and political. Forced to work together to come up with a plot (they’re writing a murder

Olivia is intrigued by Antoine. He’s bright

them.

Cantet’s film moves back and forth be-

talky and naturalistic – much of the action

mystery), they frequently clash as issues of

and challenging, and while there’s noth-

consists of the debates held by the young-

identity – particularly religion and racism –

ing inappropriate in their classroom-based

sters, who are played by non-professional ac-

cause friction.

exchanges, the swimming and sunbathing

tors – the director doesn’t sacrifice the drama,

scenes during breaks, in which they come

atmosphere or sense of menace.

Director Laurent Cantet soon telegraphs

www.business-review.eu Business Review | April 2018

46 CITY

Cultural calendar Cesar Millan Live – Once Upon a Dog April 1, Sala Palatului

By Oana Vasiliu

through one of Bucharest’s most impressive buildings: the CEC Palace.

Jazz in Church April 19-22, Lutheran Church

Bohemian Rhapsody (Queen),

Gregory Porter, the so-called

Mexican-American dog behav-

Clocks (Coldplay) and the Clas-

Voice of Jazz, is returning to

iorist Cesar Millan is bringing his

sical hit Vivaldi’s Storm, plus

Bucharest. Porter is a two-time

canine-based show to Romania.

more. The event takes place with

Grammy-winner for Best Jazz

The so-called Dog Whisperer

The sixth Jazz in Church festival

the support of the Bucharest

Vocal Album in 2014 and 2017.

will interact with and wreak

will bring to Bucharest artists

Metropolitan Orchestra. Ticket

He is described as the voice of

his magic on local pooches, in a

from ten countries, including:

prices run from RON 65 to RON

his musical generation and a

show the organizers describe as

harpist twosome Catrin Finch

270.

leading figure in today’s music

“a remarkable, enlightening and

of Wales and Senegalese Seckou

moving experience”. Tickets cost

Keita, duo Sylvie Courvoisier

from RON 105 to RON 300.

(Switzerland) and Mark Feldman (US), and Catalan-born French

Spotlight – Bucharest International Light Festival April 12-15, CEC Palace

contrabass player Renaud GarciaFons. The festival will also have a Jazz for Kids program, where children can hear their favorite stories performed to jazz rhythms. Tickets cost RON 150 per night.

Edvin Marton – Stradivarius Concert Show April 20, Sala Palatului This fourth local Spotlight will also celebrate the festival’s centenary, under the slogan, United We Shine. The event has attracted artists from Spain, Italy, Russia, Romania, Germany and China. Themes are solidarity, and connections between people, cit-

Edvin Marton is an Emmy

ies, cultures, ethnicities, facades,

Award-winning composer and

art, light and darkness. The event

performer with fans on five con-

will allow artists from all over

tinents. The show will include

the world to express their own

violin versions of pop/rock hits

visions of unity and team spirit

Nothing Else Matters (Metallica),

scene, mastering and molding

Gregory Porter April 22, Sala Palatului

gospel, blues R&B and soul.

Tickets start at RON 59.