The Global Startup Ecosystem Report 2024
Georgia: The Rising Star of Startup Innovation at the Crossroads of Europe and Asia
Nestled at the intersection of Europe, Asia, and the Middle East, Georgia is rapidly emerging as a regional hub for innovation and entrepreneurship. This strategically-located country capitalizes on its unique position to serve as a bridge between continents, providing access to vast markets and attracting visionary entrepreneurs worldwide.
How the Georgian Government Supports Entrepreneurship Through Business-Friendly Regulation
Thanks to supportive government initiatives, international partnerships, and a vibrant community of entrepreneurs, Georgia’s startup ecosystem is thriving. The country boasts one of the most business-friendly environments globally, with a streamlined business registration process that takes less than 30 minutes and a highly competitive tax system. With the world’s third-lowest total tax and contribution rate on profit at 9.9% and corporate income tax levied only on distributed profits, Georgia offers an enticing landscape for startups to flourish.
The Georgian government’s commitment to fostering innovation is evident through the efforts of the Georgia Innovation and Technology Agency (GITA). Over the past decade, GITA has invested $14 million in up to 240 startup projects, seeding an ecosystem that has attracted 13 times the initial investment from private investments and generated revenues. GITA’s grant program is the most powerful innovation engine in the country, targeting first-time entrepreneurs with financial support, training, mentoring, networking opportunities, and access to Silicon Valley experts. Notably, GITA offers Startup Matching Grants of up to $60,000 with just 10% co-financing and Innovation Grants for Regions of up to $10,000, making it easier for aspiring entrepreneurs to kickstart their ventures.
Regulatory advancements, such as the Law on Investment of Funds, have made it easier for Georgian businesses to access international capital, unlocking diversified opportunities at home and abroad. Additionally, special tax regimes for international IT companies, with profit and income taxes reduced to 5%, have attracted more than 120 companies to benefit from these incentives.
The country’s Association Agreement with the EU, which includes a Deep and Comprehensive Free Trade Area and visa-free travel, has further enhanced its appeal to entrepreneurs and investors seeking access to European markets.
“Georgia is becoming a destination of innovative talents, bright-minded entrepreneurs, and tech enthusiasts,” says Avtandil Kasradze, Chairman of GITA. “The message ‘Start Up in Georgia’ will be spread all over the world soon. Our ecosystem offers a favorable business climate with access to finance, mentorship, and infrastructure. Georgia is hosting dozens of community events, meetups, and conferences around the year, building a network of leaders from the most successful global ecosystems.”
Tether: The Global Blockchain Company Driving Innovation Through Strategic Investment
One of the most prominent players in the Georgian startup scene is Tether, an international Blockchain giant with a net profit of $4.52 billion in the first quarter of 2024.
Tether has invested $25 million in the Georgian ecosystem, covering the entire CIS region from its Tbilisi office. Marco Dal Lago, Head of Expansion at Tether, praised Georgia’s entrepreneurial spirit and digitization efforts. “Georgia is an English-speaking country, so Gen Z and Millennials interact and speak excellent English. It’s full of talent, with many universities and technology-driven individuals who have studied abroad or have even built startups,” Dal Lago notes.
”The National Bank of Georgia is interacting with a lot of industry players to create a regulatory environment open to all parties. These continuing interactions should allow digital-asset companies to come to Georgia, making it a neutral state where investment flows and entrepreneurs can find a safe place to foster economic REGIONAL INSIGHTS EUROPE 03 06 03 growth,” says Dal Lago.
Entrepreneurial Support Organizations Connect Georgian Founders with Opportunities
The nine tech parks managed by GITA across the country provide inclusive spaces for idea generation and business development, benefiting up to 32,000 individuals, including 52% females, between 2020 and 2023 alone. GITA's efforts extend beyond financial support, with significant investments in Georgia's education system to enrich the country's startup ecosystem at its roots. The agency supports universities where students learn about business and develop digital skills. It closely collaborates with top universities in Georgia, establishing new educational courses, pre-acceleration programs, hackathons, and tech boot camps. Business and Technology University is offering a hardware product prototyping course with GITA, Kutaisi International University is doing summer camps, and many more initiatives.
The Georgian startup ecosystem also benefits from the presence of an active angel investor network, Axel - Georgian Angel Investor Network, which is a member of the European Business Angel Network and the Global Business Angel Network. This network is crucial in connecting startups with potential angel investors, organizing events and fostering a vibrant investment culture within the ecosystem. The upcoming Investment Ecosystem Conference vol 3, to be held on June 29, 2024, is expected to bring together up to 500 angel investors, 3,000 guests, and over 30 speakers, further solidifying Georgia’s position as an emerging startup hub.
As Georgia continues to attract international service providers and collaborators, the country is poised to become a regional hub for innovation and entrepreneurship. The recent partnership between GITA, the Bank of Georgia, and 500 Global, a world-renowned accelerator and venture capital firm, is a testament to the growing appeal of the Georgian startup ecosystem among the international community.
500 Global Accelerator Program in Georgia Rebrands to "500 Global in Eurasia," Driving Innovation and Entrepreneurship Across the Region
500 Global has rebranded its accelerator program in Georgia to “500 Global in Eurasia,” reflecting its commitment to nurturing startups across the region. In partnership with GITA and Bank of Georgia, 500 Global has successfully accelerated up to 70 startups across five batches since 2020. The sixth batch of the program will feature nine tech startups from six countries, focusing on web3 investment, AI-powered talent acquisition, and educational technology.
“Georgia’s geolocation, cost efficient talent, and the support from key public and private partners were some of the key reasons for us to set up our accelerator in Tbilisi,” says Pedro Santos Vieira, Partner, 500 Global.
Georgia's Startup Ecosystem Poised for Growth: Attracting Global Collaborators and Driving Innovation as a Bridge Between Europe and Asia
Looking to the future, Georgia’s startup ecosystem is poised for even greater success. GITA has recently announced significant developments and initiatives to foster the growth of the Georgian startup ecosystem as part of its GITA 2.0. These initiatives include launching new early-stage acceleration programs, additional tax incentives for innovative startups and SMEs, establishing Excellence Centers in priority technology areas, and creating a comprehensive digital platform called “Start Up in Georgia.”
GITA’s commitment to supporting startups is evident in its plans to mentor 160 startups annually through four "early-stage acceleration" instead of "full-scale incubation" programs, which will incorporate grants and the participation of top international accelerator experts to guide the program. Additionally, GITA will offer new tax incentives, including 0% tax rates for innovative startups, 500% tax credits, and 30% cashback for innovative startups and SMEs. The prioritization of key technology areas, including Artificial Intelligence, Phages, and Agritech, and the establishment of Excellence Centers to support research-based innovation and R&D commercialization, will signal to the world that Georgia is committed to advancing the region’s technological capabilities.