A startup ecosystem is flourishing in sunny Lisbon
Straight out of the economic crisis Portugal is going full throttle in its startup economy. One of Europe’s oldest cities, Lisbon, is at the heart of this push in innovation. Surrounded by the seven hills you can find a rapidly growing number of startups scattered across the city. Supported by cheap rents and a low cost of living many startups are setting up shop. Its startup environment is still in the nascent stages but is making waves, appearing as the San Francisco in Europe. The resemblances are more than obvious. Ponte de 25 Abril is Lisbon’s Golden Gate, it looks exactly like its Bay Area cousin, but in more beautiful as locals like to point out, there’s no fog.
Many international startups have chosen to make Lisbon their home, driven by a search for the sun and a better lifestyle. Rents are 86% lower than San Francisco and the cost of living is among the cheapest for a European capital. You can easily get a coffee and a famous pastel de nata for €1.50, anywhere in the city.
A number of smaller accelerators and incubators, like Fabrica and Startup Lisboa, are scattered across the city but you will also find bigger ones like Beta-i. The incubator and co-working, which took over an old eight story building of the Portuguese post office, is a visual reminder that there is a new guard arriving in Lisbon. Beta-i runs a number of events to animate the community and early stage acceleration programs to help startups get to the MVP stage before they go on to raise seed funding. Uniplaces, the student accommodation booking platform, went through this program before raising a $24 million Series A. Other incubators are looking towards Lisbon, like the London based Second Home, is also preparing to set up in Lisbon this year.
The biggest difficulty for Lisbon startups is raising funds. The golden visa, which allows wealthy internationals to acquire residency easily by purchasing a home, has helped with the launch of a number of seed funds and angel investors. While this has facilitated raising money at the seed stage, which is also boosted through government support, there is a lack of national venture capital for later stage funding. So, it’s no surprise then that Portuguese startups look abroad for growth. Feedzai and Talkdesk, both SaaS startups, quickly moved their headquarters to the California Bay Area but continue to have operations in Portugal.
Creativity is abundant in Lisbon, from its historically famous azulejos to the modern design museum MUDE, it is the home to a number of fashion and design festivals. The government has understood that its future lies in the support of the creative young people who want to leave their mark on the world. It supports startup acceleration programs like Startup Lisboa and even invests in them through Portugal Ventures, which have contributed significantly to making Portugal a prime market to launch your startup.
The Portuguese brain drain, resulting from the 2008 financial crisis and the ensuing employment slump, is now being reversed with many Portuguese returning home and bringing an international outlook with them. Meanwhile Portuguese universities such as the Universidade de Lisboa are continuing to produce a high class of engineers. Portuguese universities have partnered with others known around the world, like the MIT and Carnegie Mellon, which is contributing to the high level of quality that you can find among Portuguese engineers.
The recent move of the Web Summit from Dublin to Lisbon this year, is a further testament to the innovative potential in the country and points to 2016 as a turning point in the launch of Lisbon’s startup economy.
