4 Founders Share Why You Should Launch Your Startup in Portugal

Published in

Altar.io

9 min readJun 11, 2024

In recent years, Portugal has firmly established itself as a thriving hub for tech startups — ranking #26 in the latest Global Startup Ecosystem Report.

As one of Europe’s fastest-growing tech ecosystems, the country boasts a startup-friendly environment that has garnered attention for its vibrant community, competitive costs, and abundant resources.

Recent reports underscore Portugal’s growing appeal. According to Startup Portugal, the number of tech startups in the country has increased by over 70% in the past five years.

And it makes sense with the support you can find here to build a startup — such as the startup founder visa programme and the 150+ registered incubators.

Moreover, investment is on the rise. Portugal’s startup ecosystem is expected to raise $50.7m from the Venture Capital market by the end of 2024 (up from 2023) — with significant amounts of that capital going to early-stage startups.

To understand what it’s really like to launch a startup in Portugal, I sat down with four founders who’ve all done it successfully.

They shared the benefits, the challenges and their advice for founders who are considering Portugal for their next venture.

The Pros & Cons of Launching a Startup in Portugal from Founders Who’ve Done It

Before I dive into the pros and cons of launching a startup in Portugal, I want to first introduce you to the four founders I spoke to.

First, I sat down with Filipe Quinaz, CEO of Nuada. Nuada creates exo-skeletal gloves that allow people with hand-related problems to regain hand function. Filipe has a background in computer engineering and came up with the idea when he broke a bone in his hand. They’ve raised over $3.3M in funding from startup Angels and crowdlending through another successful Portuguese startup, Goparity.

Next, I sat down with Jim Hartung CEO & Co-Founder of Flair, an AI startup to record and analyse sales video calls, transforming them into coaching opportunities for sales teams.

Then, I sat down with Rui Rocha Costa, the Co-Founder of EatTasty. EatTasty is a revolutionary food delivery service that focuses on providing users with fresh, home-cooked lunches with no delivery charges.

Since 2016, they’ve delivered over 450,000 meals in Lisbon and Madrid.

Finally, I sat down with Alexandre Pinto, a serial entrepreneur who’s been working in startups since the early 2000s. He’s currently an Executive Director at The Next Big Idea, an innovative platform dedicated to showcasing new business ideas and their creators.

This venture spans across media, featuring daily programmes on both the SIC Notícias and SIC Internacional television channels, along with a weekly magazine.

It also maintains a strong online presence with daily content updates on its website and social media platforms.

The Next Big Idea serves as a narrative hub for technological, scientific, and social innovation, as well as new trends in how we think, work, and live, capturing the stories of success, failure, and transformation in an evolving society where different generations come together to take control of their lives and explore new possibilities.

Now I’ll share what these four founders experienced building in Portugal, as well as their advice for you, should you choose to do the same.

The Main Benefits of Launching a Startup in Portugal

Development Talent at Affordable Prices

One of the key things mentioned in the conversations with these four was focused on talent. Notably, as Filipe put it, “It’s very easy to find great developer talent at affordable prices.”

And the data backs this up. Around 30% of graduates in Portugal leave university with a STEM degree. This has led to a robust talent pool of over 131,000 developers.

Moreover, Portugal offers competitive pricing for its development talent compared to the rest of the European market. Development services in Portugal will usually range between $50-$100 per hour — compared to an average of $150-$400 per hour in countries like Germany, the UK or France.

As Alexandre pointed out in our conversation, “an affordable environment for businesses, especially in terms of human resources, is crucial for early-stage startups aiming to manage costs effectively.”

He also pointed out that, while Portugal has a lot of STEM graduates working in the software development environment, there are also “Many individuals in Portugal who have gained tech skills through practical experience rather than formal education.”

For example, at Altar some of our software developers came from coding bootcamps. Others went down the traditional path of a university education. All of our developers have developed award-winning software products that have raised millions.

All of this to say, these alternative paths of development education have created a secondary pool of technical talent that is “more adaptable and practically trained which suits the culture of a tech startup’s rapidly changing needs.”

A Well-Connected Startup Ecosystem That Can Operate Internationally

The next major benefit of launching a startup is the ecosystem that exists here. All four of the founders I spoke to brought it up.

Specifically, Jim mentioned that “once your foot is in the door, it’s extremely easy to start talking to relevant stakeholders to your startup. So not only is there a lot of talent in the city, the community is strong enough that they’re relatively easy to find.”

Alexandre also touched on the hyper-connectivity of the startup ecosystem, adding that “Portugal has a very friendly and open culture in general, which is reflected in the way the startup community operate here.

He also added, “Moreover, it’s very normal for the Portuguese population to communicate in multiple languages. It’s common that people are proficient in English, Spanish or French — making it attractive for startups that aim to operate at a global scale.”

Rui also spoke on the topic of working in an international market. Specifically “The Portuguese people create businesses already thinking shout expanding to international markets — they already look beyond. This is starkly different from the Spanish market, for example, where they have a huge internal market, but rarely look at the rest of the world.”

Quality of Life

Finally, one of the other factors Portugal offers for founders is the good quality of life.

As Filipe puts it, “Something that I’m more aware of now than I ever was is that Portugal is a very easygoing country. Founding a company is a lot. When you have a very stressful, professional life, you don’t want to have a very stressful personal life. Portugal is safe, sunny (for the most part) and the cost of living is very affordable.”

Jim also commented on this, he said, “Not only does a great quality of life help exponentially with productivity, it also attracts talented people to move here.”

The Key Challenges of Launching a Startup in Portugal

The Ecosystem & Funding Challenges

While the startup ecosystem in Portugal is certainly a benefit of launching your next venture here, it can also be one of the challenges.

And that starts with the bureaucracy.

Alexandre noted this in our conversation, saying: “Like many countries, Portugal has bureaucratic hurdles that can slow down the startup process. Navigating these regulations can be a significant drain on time and resources — especially for a young startup.”

And it’s true, that while the startup ecosystem here is dynamic and evolving and speed, compliance with local laws and regulations requires careful planning and advice.

That said. The incentives I mentioned in the benefits section, like the Startup Visa and Tech Visa programs, help to ease these challenges.

The other challenge to launching in Portugal is investment. Something all of the founders I sat down with touched on.

For example, as Filipe put it: “The Portuguese investment ecosystem has very low dynamics, they’re developing on that side of things, but it’s still growing.”

Alexandre went deeper on this issue, “The investment landscape is not as robust as in some other countries, with fewer venture capitalists and angel investors willing to take risks on new companies. Furthermore, terms from local investors can be unfavourable, often demanding significant equity stakes that can deter future investment.”

And it stands to reason. While growing, the startup ecosystem in Portugal is still in its infancy — relatively speaking when compared with The U.S. or U.K.

For you, it just means you’ll have to carefully navigate the investment landscape and potentially look for diverse funding sources, including international investors who may offer more favourable terms and a broader perspective on the growth potential of new companies.

Local Market Limitations

The other challenge launching a startup in Portugal poses is it’s local market.

Rui had good advice to share on this topic: “We have a very small market so it can be quite difficult to have a business here. Sometimes it’s better to start selling in a bigger market, then only look at the Portuguese market later when you have some traction.”

While this is undoubtedly a challenge, it does help to create one of the pros we talked about, thinking on an international scale.

Or as Alexandre put it, “The limited domestic market means startups need to look internationally sooner.”

Advice for Startup Founders Launching a Venture in Portugal

Finally, I want to leave you with the main pieces of advice these founders gave me on launching a startup in Portugal.

“Enjoy Portugal, But Keep an Eye on the International Scene”

“I think the main thing is to enjoy Portugal — but ensure you keep an eye on the international scene.

There are several cool places and thriving local ecosystems within Portugal, primarily in Braga, Porto, Lisbon, and perhaps Coimbra. In these four cities, you can easily integrate into the startup ecosystem.

However, it’s crucial not to lose sight of international connections. That’s the main point — if you manage that, then the benefits definitely outweigh any drawbacks of relocating.”

Filipe Quinaz, CEO, Nuada

“Find Local Mentorship”

“Try to connect with three to five Portuguese mentors who have experience in fundraising and building companies in Portugal; their insights will be invaluable. Additionally, think beyond Portugal’s borders — start selling internationally from day one.”

Rui Rocha Costa, Co-Founder, EatTasty

“Get Your Foot in the Door”

“Join StartupLisboa as it’s the central hub of the ecosystem here. Start from there to expand your network and opportunities”

Jim Hartung, Co-Founder, Flair

“The 7 Steps to Launching Successfully in Portugal”

“Wow, where to start?

First, embrace networking. Actively engage with the local startup ecosystem. Networking with other entrepreneurs and industry stakeholders is essential. Founders should reach out, share ideas, and collaborate with peers in their sector to gain insights, support, and possibly forge beneficial partnerships.

Leverage local advantages. Maximise the unique benefits that Portugal offers, such as cost-effective resources and a multilingual workforce. These can be significant assets in both domestic and international operations.

You must understand the cultural nuances. Be cognisant of the local cultural context, particularly the cautious approach to new businesses and the stigma associated with failure. Tailoring strategies to navigate these attitudes can aid in gaining acceptance and building trust within the market.

Utilise Government and EU Resources. Explore support opportunities available from the Portuguese government and the European Union. Various programs and incentives are designed to help startups thrive, providing both financial and logistical support.

Plan for international expansion. Considering the limited size of the Portuguese market, founders should design their business models to scale internationally. This involves understanding global market trends and positioning the company effectively to compete abroad.

Focus on building a resilient team. Assemble a strong, adaptable team that can navigate challenges. The team should possess the necessary technical skills and the capacity to innovate and manage the complexities of both local and international markets.

Finally, prioritise product market fit. Ensure that your product or service meets the needs of the Portuguese market. Understanding customer preferences is crucial for gaining early traction and setting the stage for broader success.”

Alexandre Pinto, Serial Entrepreneur, Executive Director

Wrapping Up

Portugal is rapidly becoming a top destination for startup entrepreneurs.

The country not only promises over 300 sunny days a year but also offers substantial local support for burgeoning businesses.

From the startup founder visa to the abundance of over 150 registered incubators, Portugal is equipped to support new ventures.

And while it’s not without its challenges, there is a reason the ecosystem is growing so quickly here.

Thanks for reading.

If you’re thinking about launching your startup in Portugal…

…and want to talk more about how to do it effectively, reach out to me here. I’d be happy to help.