When Paddy Cosgrave brought Websummit to Portugal in 2016, Europe’s biggest tech event, there were already Portuguese startups on the international stage, like Farfetch, Seedrs and Codacity.
The event has grown over the years, putting Portugal in the spotlight when it comes to startups and venture capital, but also as a wonderful place to work and live. The 40.6% growth of expatriates in 2021 compared to 2011 also supports this perception.
Portugal has more unicorn companies than Spain, Greece and Italy combined, according to the executive director of Startup Portugal. If you compare the size of Portugal with these countries combined in terms of population and GDP in 2021, they are respectively less than 9% and around 1%.
The country also has high-quality, cost-competitive engineering talent combined with an extremely high level of English proficiency (compared to Spain, France, Italy). The Portuguese founders are highly qualified, with the majority holding at least a master’s degree. This is one of the reasons for this improbable success in recent years.
The 50 startups in Portugal that have grown fastest over the past 2 years have raised €1.2 billion, have an aggregate valuation of €6 billion and employ 3,500 people according to Rows. These are companies with global activities that have chosen their headquarters or offices in Portugal.
In 2021, the US continues to be the top contributor to funding for Portuguese startups, especially growth-stage funding, followed by the UK.
Public funding is also one of the most important drivers of the venture capital ecosystem in Europe. The European Investment Bank and the European Investment Fund have supported different solutions as direct investment funds and funds of funds. The European Commission is also economically and financially committed to supporting the growth of European entrepreneurs.
Portuguese startups come from a wide range of sectors as a competitor to Excel and Google Sheets, remote work platform, proptech, food support app to currency conservation digital and a cryptobank authorized by the American authorities.
Cryptocurrencies are an area where Portugal has made headlines with digital nomads moving to Portugal to create its first digital nomad village, with the support of the government of Madeira Island. But this is not the only initiative. The Bitcoin family, a well-known Dutch family who made their fortune with Bitcoin, chose Portugal to live in after spending the last 5 years in 40 different countries. Portugal is a tax-efficient country for cryptocurrencies and life is easy in Portugal, according to other expats who have moved to Portugal.
Madeira creates incubators and a crypto village to develop innovation and attract digital nomads. But it happens in many other cities, like Lisbon. The new mayor of Lisbon, Carlos Moedas, has floated the idea of creating a unicorn factory project and it is already under construction and should be completed before the next edition of the Web Summit, in November this year.
Portuguese venture capital funds play an important role in leveraging local knowledge and supporting entrepreneurs with their international footprint, helping to create scale and promote networking. It was a nascent market just a few years ago, but it’s growing and has a lot to offer.
Diogo Saraiva of Ponte
Head of Investments at STAG Fund Management