Prototype to Unicorn: The Rise of the Greek Startup Ecosystem

If you search for stories about the Greek startup ecosystem over the last thirty days, you’ll probably read headline like:

• Microsoft announces $1 billion data center venture in Greece (Oct 2020)NetData raises a new round totaling $14.2 million (Sep 2020)
• Spotawheel raises €10 million (Sep 2020)
• US. and Greece sign a Science and Technology Agreement (Sep 2020)
• Instashop was acquired by Delivery Hero for $360 million (Aug 2020)

All this spells out one thing: Greece is emerging as a hub for innovative startups.

The Greek startup scene made its first steps during the years of the crisis, and has been steadily growing ever since. Today, the local startup ecosystem is worth billions of euros, with startup valuations soaring. Now, some of the Greek startups are considered “unicorns”, valued at $1 billion.

Τhe ecosystem’s market capitalization exceeds €3.5 billion euros, up from €2.5 billion last year and zero just eight years back. The Greek startup ecosystem has entered a period of maturity, with Athens being named European Capital of Innovation in 2018.

Building Unicorns
Several Greek startups started from scratch, attracting foreign investment, building truly unique technology products. Companies like Blueground, Workable, Viva, Persado, Beat and Skroutz, are valued above €100 million, while companies like Orfium, Marine Traffic, and Netdata are edging that threshold.

Some of the largest global companies have acquired Greek startups. Samsung acquired Innoetics, which builds text-to-speech and voice-to-speech technology, Daimler acquired Taxibeat, a taxi-hailing app. In May 2020, Microsoft acquired Softomotive, a robotics automation platform and Applied Material acquired Think Silicon, which develops of high-performance graphics processing units (GPUs).

Venture Capital Landscape
In 2010, $48 million was pumped into Greek startups and in 2018, this figure hit $539 million. During the same period, 301 Greek startups raised $2.4 billion.

Openfund was the first venture capital fund in the country, making several successful investments in companies like Beat and Workable. EquiFund which was launched in 2017, has already made a positive impact with nearly €500 million being poured into new businesses until 2022.

International interest in Greek startups is growing. For example, Bain Capital Ventures led a €15.5 million round in Netdata. And this is not only one to attract foreign investment. The examples are numerous and this interest signals a new phase of maturity for the local startup industry.

We are entering a new and interesting phase. The necessary venture capital resources are now available, but we need more than just money, to make the next leap.

Next Steps
Greece is facing a crisis again, this time due to the pandemic, which hit hard tourism revenues. To turn Greece into a global innovation hub, some things need to change.

We need to work out how to keep talented entrepreneurs in the country. A report from the Bank of Greece showed that during 2008-2013, 427,000 Greeks left the country. Greek bureaucracy is one reasons. High social security contributions is another, making Greek startups less competitive. We need to improve everything, from health care and social security to taxes. We need to realign salaries and incentives to stay competitive.

We have awaken the entrepreneurial spirit in people and we are on the right track. But building a startup ecosystem, means strong connectivity, networking, formal and informal with institutions, access to financing, human capital and knowledge. Some of these elements are already in place, but others still need time.

The real challenge for the country is to extend its economy, freeing it from the dependence on sectors such as tourism, that are vulnerable to external shocks. 

The road ahead undoubtedly has hurdles, but it also holds more growth, that we have not yet imagine.