The Global Startup Ecosystem Report 2022

Discover Portugal: An Unbeatable Value Proposition for Startups

Portugal’s startup ecosystem is on the rise and the decision makers and organizations that power it have no intention of slowing down. The community continues to make strides toward attracting and retaining more international talent while forging partnerships with big corporations, making it easier than ever for startups to access markets throughout Europe and beyond.

The Portuguese startup ecosystem dates back to the early 2000s. Since then, the availability of top-tier talent backed by highly ranked universities, a thriving community with seven unicorns, and a world-class digital infrastructure has popularized Portugal as a destination for startups from around the world. In 2016, the Portuguese government galvanized the country’s startup ecosystem with the creation of Startup Portugal as part of a national strategy to foster entrepreneurship through increased structural support, funding, and internationalization efforts.

A Booming and Vibrant Entrepreneurial Community

With over 2,200 registered startups and counting, Portugal’s startup community is booming. In 2021, Portugal’s startup ecosystem garnered over $1 billion in funding — a growth rate of 100% over the previous year. The amount of total VC funding invested in the ecosystem has grown an impressive 15x from 2017 to 2021, mainly in late-stage funding, which has grown by 55x. Private funding and co-investing initiatives like 200M Fund ensure that local and foreign private resources continue to flow into Portugal’s thriving startup community.

Portugal’s largest cities, Lisbon and Porto, are part of the Scale Cities Alliance. This collaboration among public ecosystem builders from 13 European cities aims to create Europe’s most connected technology hubs. Further, a national network of incubators makes it possible to start up and develop a concept with support even outside of the major hubs.

Lisbon is also the home of Web Summit, the world’s leading tech conference, which brings together thousands of founders and investors from around the globe for an invaluable networking opportunity. In 2021, the Europe Startup Nations Alliance (ESNA), an initiative of the Portuguese Government, was announced at the conference. Headquartered in Lisbon, ESNA has the mission of supporting European governments with improving structural conditions for startups. Also in 2021, the Regional Government of Madeira, through Startup Madeira, launched Digital Nomads Madeira Islands, an initiative that aims to attract digital nomads to the Atlantic islands of Madeira and Porto Santo.

Startup Portugal provides support to entrepreneurs through its One Stop Shop, which has all the information needed to set up operations in Portugal and assists entrepreneurs and investors both online and offline on a one-to-one basis. The organization also hosts Above and Beyond Hangout, which brings the entrepreneurial community together to discuss a relevant topic each month. Startup Grind is also active in several Portuguese regions.

All these initiatives are paying off. Portugal has produced several unicorns to date: SWORD Health, a world-renowned digital physiotherapy company; OutSystems, a low-code enterprise development platform; Farfetch, an online platform for luxury fashion; Feedzai, a RiskOps platform for financial risk management; Talkdesk, a cloud-based contact center and AI software provider; Remote, which provides global HR solutions. Digital asset platform Anchorage, which was founded in the U.S. and has a Porto office, also achieved unicorn status in 2021.

A Magnet for Top-Tier Talent

At its core, Portuguese society offers an attractive sense of stability. Ranked #4 in the Global Peace Index, Portugal is known for fostering a diverse, inclusive society that benefits from a sense of freedom. Globally ranked #3 for expat quality of life by the InterNations Expat Insider survey, talented workers from around the globe flock to Portugal.

Portugal’s global attractiveness is complemented by thriving sources of local talent. Four Portuguese universities are ranked in the 2021 Financial Times European Business School Rankings and seven are featured in the QS World University Rankings. Additionally, Portuguese university graduates are poised for international success, as the country ranks #7 globally in English proficiency, according to the EF English Proficiency Index. Aspiring tech talent and those looking to upskill have access to ​Academia de Código and the local chapters of 42, Ironhack, and Le Wagon among other workshops and bootcamps.

An open society and quality educational environment are woven together by government policy that actively encourages startup activity. Popular incentives include Startup and Tech Visa programs, two options that fast track residency for those bringing investment, talent, and innovation into the country. The Startup Voucher program, which will be relaunched this year for founders looking to create startups for the digital and green economy, helps young entrepreneurs breathe life into their ideas by minimizing risk and lowering the barriers of entrepreneurship, making it more accessible. Public-private intermediaries like Startup Portugal ensure the smooth flow of information, resources, and support among startups, investors, incubators, and the government.

World-Class Infrastructure

In a 2021 OECD report, Portugal ranked #11 globally in fiber optic connectivity. Additionally, Portugal was the first country in the world to provide all public schools with fiber optic internet access. Additionally, 5G access is expanding throughout the country. NOS, a regional telecommunications service provider, collaborated with Amazon Web Services (AWS) to launch the 5G Accelerator, an investment fund designed to “stimulate research and development in the use of 5G by the community of entrepreneurs in Portugal.”

In addition to its technical infrastructure, Portugal offers a rich network of institutional knowledge. A national network of over 160 incubators ensure that entrepreneurs can receive the support and resources they need to thrive. According to IDC’s Startup & Entrepreneurial Ecosystem Report, 65% of founders stated that they relied on incubator support during the early stages of their startups.

A Global Gateway to European Markets

Situated at the southwestern tip of Europe, Portugal is the ideal portal for startups looking to enter or expand into the continent, a market of over 500 million people. As the closest European country to the U.S., Canada, and Brazil, doing business in Portugal also allows startups to stay in sync with some of the world’s most prominent economies. Portuguese startups adopt an international-first strategy earlier in their lifecycle, which can be a more efficient path to success.

Portugal boasts a coastline of about 2,500 km, with one of the largest exclusive economic zones in the world, which extends over 1.7 million square kilometers, including a great diversity of ecosystems and resources. The Portuguese maritime triangle (mainland, Madeira, and the Azores) constitutes 48% of all marine waters10 under the jurisdiction of the Member States of the European Union in spaces adjacent to the European continent.

There is also the importance of the continental shelf extended beyond 200 nautical miles, whose delimitation process is underway with the United Nations, and which increases the area covered by maritime spaces under national sovereignty or jurisdiction to 4,100,000 square kilometers, thus extending rights of sovereignty, in addition to the Exclusive Economic Zone, for the purposes of conservation, management and exploitation of natural marine soil and subsoil resources, which will make Portugal even more attractive to new ventures related to the Blue Economy.

Portugal is the perfect beachhead for European expansion. Geographically efficient with world-class talent, communities, and infrastructure, Portugal is an unbeatable value proposition that startups around the world would do well to consider.

The opinions expressed in this sponsored article do not necessarily reflect the views or position of Startup Genome.