European Startup Tour, Episode 1: Luxembourg
Station F team is going on a tour across European countries to visit and analyze startup ecosystems. Stay tuned for next episodes!
Brexit and other uncertainties are casting doubts on the European tech scene, but Europe is still doing good with an overall investment in the startups of $12B in 2016 and has some strong assets. At Station F, we want to meet its different components and what better way to do this than taking a European tour!
So here is a first and personal look (thru my eyes only!) on our closest neighbors and I would like to start with the “Grand Duché”, aka Lëtzebuerg, Luxembourg or Luxemburg ☺ .
Did you know the fund behind Skype and Wix is from Luxembourg?
The Luxembourg case is a fascinating one: how can a country of 600K inhabitants with 47% foreigners, stuck between France, Germany and Belgium compete against other European countries? Especially considering they want to improve Luxembourg’s image. Some famous European startups stories have undoubtedly closed ties with the Grand Duchy: Skype, the biggest European unicorn (still) was supported by Mangrove VC and other great companies are just born there like Doctena or Job Today to name a few.
LUX’s main startup sectors: Fintech, IT and Space Mining
Beyond its well-known assets such as a stable business environment and political system, a huge GDP per capita (#2 WW) and multilingual workforce, Luxembourg is relying mostly on finance. Three main expertise domains derive from this: Fintech, IT and … Space Mining (yes you read that correctly):
- Fintech: not surprising when you know that the financial sectors creates one third of Luxembourg’s GDP. FinTech startups can benefit from a unique environment and flourish from a market and human capital perspectives. Truly the case of Governance.io with formers finance exec from the Luxembourg financial place and benefiting now from such a high concentration of financial customers
- IT: as a predominant financial place, Luxembourg has always been known for security and privacy and what else than datacenters to prove that? In a post-Snowden world and data sovereignty era (cf. Linkedin ban in Russia), having highly certified datacenters ones is key. Luxembourg is the European country with the highest density of Tier IV datacenters with a 99,995% SLA
- Space Mining: the new gold rush on steroids of the 21st century? Luxembourg believes so with the launch last year of a €200M fund for R&D grants or equity purchase such as the €25M investment in Planetary Resources (backed by Larry Page) and a new legal framework to “ensure that private operators working in space can be confident about their rights to the resources they extract”
- There are several growing initiatives with different startups hubs to support this new ecosystem such as Luxinnovation and its Fit 4 Start program, Technoport, Nyuko and the dedicated Fintech hub, Lux future lab from BNP.
LUX’s challenge: human capital
Luxembourg benefits from a natural source of talents in the financial field, experts in finance being willing to move to the startup ecosystem at some point in their career. Yet the challenge remains: the local ecosystem lacks other types of talents. For the country, it is of course hard to compete with other European countries with computer science programs and business institutions in London, Munich, Paris or Lausanne. Luxembourg is trying to keep up, for instance with Webforce3 developer school hosted at Technoport.
Luxembourg on the startup map
Luxembourg is a an interesting case. If we should localize it on the startup map, here is where we’d put it:
- Where old and new collide: it will be interesting to see how its traditional financial sector will be reshaped by FinTech startups, challenged in its current product offerings but also discovering hidden opportunities: reduction of infrastructural costs with blockchain solutions or crunching untapped data with advanced analytics
- Where regulation and innovation meet: whether it is for datacenters with high-level certifications or for a new field, such as space mining, the country shows its ability to develop adaptive regulations that is also trying to take advantage of other country’s limited laws (such as the US one regarding space mining)
- Where bets are taken: who knows how the asteroid mining industry will look like in a decade? This is an open question that the country is willing to address.
NEXT STOPS: Brussels, Madrid, Lisbon
Do you want to meet up during my European tour? Please ping me: twitter.com/marwan_elfi
