Greece’s start-ups draw investment as entrepreneurs drive innovation
Pelion’s Mylopotamos Beach in the region of Thessaly is one Greece’s most acclaimed internationally. It is divided in two by a huge boulder with a hole-gallery in its centre. Copyright: Giannis Giannelos

Start-ups

  • Start-ups Stats Icon 1
    180 m

    Total amount invested in Greek start-ups through EquiFund (Dec. 2019)

  • Start-ups Stats Icon 2
    147 m

    Estimated total capital raised by Greek start-ups in 2019

  • Start-ups Stats Icon 3
    4

    Number of companies funded by 70% of total start-up capital raised in 2019*

  • Start-ups Stats Icon 4
    1st

    Athens’ 2019 regional ranking as the best ‘Value for Money’ destination**

*Found.ation, Startups in Greece 2019, http://thefoundation.gr/ 
**European Startup Initiative, Startup Heatmap Europe, https://www.startupheatmap.eu

Athens is evolving into a major hub for tech start-ups. Their new ideas and global business plans are the perfect way to help businesses move beyond the crisis. Recently, funding in the sector has been growing thanks to an increase in initiatives aimed at backing entrepreneurs and venture capitalists. At the same time, the government committed to creating a supportive environment for innovation and growth with the announcement of two innovation parks. While the sector remains relatively small when compared with other European capitals, it is getting ready for some big moves.
Greece Startups.Opener-secondary
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Innovators Take Greece To the Next Level

After coming to the start-up and innovation scene a little late, Greece, spurred on by the crisis, is fast becoming a dynamic European start-up ecosystem, with Athens stepping in as a hub for new tech ideas.

Undeniably, Greece’s crisis has given birth to a flourishing start-up scene.

The country is swiftly moving ahead as one of Europe’s most dynamic start-up ecosystems with Athens stepping in as a hub for new tech ideas, particularly after being named European Capital of Innovation in 2018.

The need for change is spurring a new generation of entrepreneurs into action – a breed of innovative thinkers pushing ahead with business plans despite uncertainty and potentially high failure rates.

“The Greek start-up ecosystem, despite the challenges over the last decade, is vibrant with many examples of companies expanding across the globe, attracting significant funding, or making successful exits,” says Thanos  Geramanis, Partner and COO at Blueground, one of Greece’s most successful start-up stories.

Formed in 2013, Blueground started using technology to help those looking for a furnished place to rent. So far, Blueground has compiled a portfolio of more than 2,000 apartments in New York, San Francisco, Los Angeles, Boston, Washington, D.C., Chicago, Dubai, Istanbul, and Athens. Its goal is to reach 50,000 apartments in 50 cities by 2023.

“Companies like Blueground, Beat, MarineTraffic, Blendo, Softomotive, Hellas Direct, and Transifex are transforming their respective industries globally, hiring hundreds of employees for their offices worldwide and raising significant funding,” adds Germanis.

Copyright: By dotshock / Shutterstock.com

Between 2010 and 2018, a total of 301 Greek start-ups received $2.4 billion in financial backing in 500 rounds of investment funding from 268 venture capital funds, says a study by Marathon Venture Capital – a seed-stage venture capital fund.

The rise on a year-on-year basis has been significant. In 2010, a total of $48 million was pumped into start-ups in Greece. And in 2018, this figure hit $539 million, the study showed.

Greece’s start-up environment has since entered a new phase of maturity with a growing number of investors offering their backing and support to local innovation.

National Bank of Greece and Eurobank were among the first to extend funding, mentoring, commercial operations, networking, and exporting activities to Greek start-ups and young businesses worldwide through their platforms. Eurobank runs a 12-month support programme for start-ups called ‘egg – enter•grow•go’

“Our egg – enter•grow•go is recognised as a leading incubator, having been instrumental in enhancing the innovative entrepreneurship landscape in Greece. We started it in 2013, and one should have in mind the kind of environment in which this initiative was born,” explains Fokion Karavias, CEO at Eurobank.

“This was one of the peaks of the prolonged economic crisis and a most challenging period for the banks. However, we believed in its prospects and in the need to create something that would allow a new generation of entrepreneurs to stay in the country and turn their ideas into businesses,” says Karavias.

The figures clearly show egg’s achievements: it has hosted 172 groupswith 730 members, among them 100 start-up businesses. In the first six years, 62 have submitted 31 patents. Businesses hosted by the incubator are primarily focused on tourism, fintech, digital, commerce, and agri-food, among other areas.

Show me the Money

With bank lending in Greece remaining tight, start-ups have been turning to alternative solutions to raise money for their ventures.

Much of the capital so far has come from abroad. According to the same study by Marathon Venture Capital, Since 2010, 268 institutional investors have backed Greek start-ups, 12 of the investors being from Greece. The rest were based mainly in the U.S., the UK, mainland Europe, and Israel. A total of 47 acquisitions and 5 IPOs were also carried out during the period of the study.

One key source of financing is EquiFund, dubbed the ‘fund of funds’.

Created in 2018 by Greece, in cooperation with the European Investment Fund (EIF, part of the European Investment Bank), EquiFund aims to strengthen the local venture capital (VC) market. By December 2019, it had invested a total of €60 million in Greek start-ups, with 74 companies having received total funding of €180 million.

“Initiatives like EquiFund … that leverage the power of VCs in Greece to help start-ups are a major milestone in the right direction. Although the VC ecosystem in Greece is new, most of the VCs have been founded by people with significant experience in the domain of start-ups worldwide,” says Chris Kachris, CEO and Co-Founder of InAccel. His company helps businesses run faster software applications and deal with a growing amount of data.

On a broader scale, there is also support coming in from Brussels for small and medium-sized businesses.

In 2018, the EU announced the launch of VentureEU – a €2.1 billion plan to stimulate Europe’s start-up scene while aiming at the same time to keep high-potential players closer to home, create more jobs, and drive growth in Europe.

Under VentureEU, the EU is providing cornerstone investments of €410 million in independently managed VC funds-of-funds, including €200 million straight from Horizon 2020, the bloc’s biggest innovation and research programme.

The funds are aiming to raise up to €2.1 billion in public and private investment and generate an estimated €6.5 billion of fresh investment in innovative start-up and scale-up companies across Europe.

Greece’s New Economy Development Fund (TANEO) is also set to play an important role in the funding of start-ups and SMEs through an equity investment programme for entrepreneurs. Together with private investments, targets have been set by the Greek government for the initiative to inject a total of €1.05 billion in the financing of new and pre-existing enterprises.

Charalampos Chomenidis, CTO and Co-Founder at Purposeful, says that getting the right capital for your start-up is a make or break issue. Purposeful is a biotech company that repurposes traditional drugs as a means of curing rare diseases.

“What we need is informed investors who can back our drug discovery process through their funding, international connections, and market awareness,” he says.

Tech Hub Territory

Athens is taking significant steps to evolve into a serious tech start-up hub.

In 2018, the city clinched the iCapital award for using innovation as a call to action to respond to societal challenges and improve the lives of its residents and visitors.

Many innovators start their young businesses in Athens, which is home to most of the country’s coworking spaces, incubators, and accelerators, followed – to a much lesser degree – by Patra, Crete, and Thessaloniki.

Copyright: By GaudiLab / Shutterstock.co

Athens provides access to a large number of highly skilled engineers and developers. It is where all the action is taking place, with more innovation and networking events coupled with contests.

Local government is also tapping into innovation in order to address urban challenges, setting up social cooperatives and clusters, while opening the door to more funding and support.

Efforts are being made to involve universities, government agencies, large companies, and other bodies in order to further develop Greece’s start-up scene, which is forecast to achieve rapid development by 2022.

And while Athens ranks 10th amongst start-up hubs within the Mediterranean region, according to Startup Heatmap Europe’s 2019 report, the progress is palpable. Within the category of ‘Founder’s Choice’, The Greek capital was up 3% versus the same rankings in 2018. Lower costs are also a definite plus, with Athens holding the highest regional ranking in the ‘Value for Money’ category at 96% – compared with 88% in 2018.

In terms of innovator interest, a report by Found.ation, a start-up accelerator, and two tech sector partners, titled Startups in Greece 2019, says the top three areas of pre-seed and seed stage start-ups are life sciences, retail, and agri-technology. Also on the rise, and seen as areas of opportunity and profit, are the lifestyle, tourism, and energy sectors.

Start-Up Stars

They are the ones with ideas, the energy, the knowhow, and the keys to the future. Greece’s start-up scene is booming and so Greece Investor Guide gathered five of the top players around a table to talk about problems, how to solve them, opportunities, and what it means to do business in Greece.

Read the full Roundtable
  • Odysseas Ntotsikas Managing Director of ThinkDigital Group
  • Eleftheria Zourou Founder & CEO of Doctoranytime
  • Charalampos Chomenidis CTO of Purposeful
  • Chris Kachris CEO and Co-Founder of InAccel
  • Thanos Geramanis Partner and COO of Blueground

Fighting the good war

Project Agora helps publishers in emerging markets take maximum value out of visitors, says Odysseas Ntotsikas, Managing Director of ThinkDigital Group.

Getting the right doctor

Doctoranytime helps patients get the best medical services, says Eleftheria Zourou, Founder & CEO.

Repurposing for rare diseases

Purposeful uses existing drugs to cure overlooked diseases, says CTO Charalampos Chomenidis.

Boosting performance 20 times

InAccel helps companies run faster software applications and handle huge amounts of data, says CEO and Co-Founder Chris Kachris.

Hassle-free renting

Blueground compiles a 2,000 apartment portfolio and eyes a target of 50,000 by 2023, says Partner and COO, Thanos Geramanis.

The Minuses

The same Startup Heatmap Report says 39% of start-up founders prefer launching their companies abroad, in an attempt to find a ‘friendlier’ eco-system, pointing to the need for Greece to step-up its efforts to lure investors.

In an interview with Kathimerini,Startup Heatmap Europe Co-founder, Thomas Kösters, said the phenomenon was mainly due to a lack of available capital – which he said stands at 42% versus the 58% average of the top 25 business centres – coupled with a “problematic business legislation” that hinders startup growth.

The 2019 Found.ation report says Greek start-ups raised at least €147 million in 2019. And yet, more than €100 million of this amount targeted only four companies: Blueground, Netdata, Balena, and Weengs.

Eleftheria Zourou, CEO and Founder of Doctoranytime, says that some good companies have come out of Greece’s ecosystem but that it remains small. “I believe the reasons are the lack of support and the right business environment,” says Zourou. Other reasons she cites include high taxes and not enough people able and willing to work in the demanding and competitive start-up environment.

Doctoranytime is a service that helps match up patients with the most suitable doctor based on their needs.

Compared with 2018, there has been an increase in self-employed people running solo, demonstrating the fact that more innovators are seeking funding opportunities even before setting up a solid team.

And while the same Found.ation report acknowledges that entrepreneurship has become a top priority for the Greek government, it calls for the creation of a national strategy concerning start-up activity and support. Additional efforts, it adds, need to be made to overhaul education, further encourage research and development, and update Greece’s legal framework to allow new companies to form and develop in their initial stages.

profile of the early stage greek startups infographic

On the Bright Side

Since 2010, start-up activity in Greece has boosted employment, particularly among the younger generations, while serving as an incentive for the country’s productive working force to remain at home, reversing a massive brain-drain wave over the last decade.

In the meantime, the talent is there. Greece ranks 47th in innovation capability among 140 counties on the World Economic Forum’s 2019 listing but holds the 76th spot in business dynamism and 120th in venture capital availability.

2019 was a transitional year for the Greek start-up ecosystem. Some 24 months after the EquiFund mechanism was rolled out, Greek startuppers are actively seeking opportunities. Indicatively, pre-seed stage activity increased by 11.2% year-on-year, demonstrating a flow of newly established companies trying their luck with investors. At the same time, there was also a 6.4% increase in the number of companies in Series A deal stage.

Meanwhile, demonstrating the government’s commitment to tap into innovation, in September 2019, Greek Prime Minister Kyriakos Mitsotakis announced the creation of the “Thess Intec”, an innovation park in northern Greece. Set to be backed by private funding, the park will serve as a hub for the development of high-tech products as well as research and development. Plans are also being made for a similar innovation park in Athens this year (2020).

And it appears the government has also taken heed of the need to address challenges within the start-up environment. “With regards to start-ups, we acknowledge their existing track record in the country and their tremendous potential,” says Digital Governance Minister Kyriakos Pierrakakis. “We want to adopt international best practices which have enabled the creation of ecosystems. Currently, we’re mapping the ecosystem in order to see where and how we can assist tech entrepreneurs,” he adds.

Add to this the deployment of new generation access (NGA) network infrastructure, including fibre optics, and a new day for Greece’s start-up scene is about to dawn. 

“The challenge for Greece is to become a benchmark in the broader European technological market and a role model on how a country can reposition and enhance its economic footprint in the international sphere while transforming itself,” says Dimitris Kalavros-Gousiou, investor, Co-Founder, and Partner of Velocity.Partners Venture Capital, Founder of TEDxAthens and Found.ation.

What's Next?

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