Portugal has now seen 7 startups achieve unicorn status – Farfetch in 2015, OutSystems and Talkdesk in 2018, and Feedzai, Remote, Sword Health, Anchorage Digital in 2021.
This number is even more impressive if you compare it with unicorns coming out of neighbouring Spain (Cabify, Glovo, Wallbox and Flywire) Italy (Yoox and MutuiOnline) or Greece (PeopleCert). It’s estimated that these 7 Portuguese unicorns combined valuation accounts for about 15% of the country’s GDP!
But what explains this fast change? Is this a fad or are we witnessing a transformation?
To understand all this, we need to take a deeper look at what happened in Portugal and in Europe in 2021.
2021 was an untypical year due to the pandemic, multiple lockdowns and disruptions to our lives. But it has been a remarkable year for European tech. Deep tech companies are now worth a combined €700 billion, more than 70 have reached unicorn status across the continent, Seed and VC funding have had double-digit growths and companies such as Revolut and Klarna have reached Decacorns status.
Much of this activity is concentrated in the UK, Germany, France and Scandinavia, but the Portuguese ecosystem has also benefited, especially from the availability of funding. The most active VC’s in the country are Portugal Ventures, Armilar or Indico. A knowledgeable and hands-on VC scene has helped to establish a more mature entrepreneurship culture.
Let’s now take a step back to the late ’90s / early 2000’s, when the first tech companies sprouted. Some succeeded – Novabase, Primavera and Critical Software – but the fallout of companies like Ydreams cast a grey sky for years over tech founders. It was only after the financial crisis of 2008, which hit the country hard in 2011 with the IMF intervention, that the situation changed. Due to spiralling unemployment, many had to resort to their ingenious and creative skills.
Incubators became increasingly popular as entrepreneurship and self-employment were seen as options to escape the crisis. The country also experienced a mentality shift as younger generations increasingly began to move abroad for work and opportunities – experiencing new ways of thinking and doing things. The so-called “brain drain” has had some positives – several of the current unicorns were founded abroad, or after founders returned from long international experiences.
As a country, Portugal became an open door not only for tourists, but for businesses and especially for tech talent.
In 2010 IPNincubadora was considered one of the best tech incubators in the world, 2012 saw the birth of Startup Lisboa and by 2016 the government launched a national strategy for entrepreneurship. So, by 2015 with Web Summits’ announcement of moving to Lisbon, a new spotlight was shining over the growing tech scene and the country became increasingly popular for foreign companies.
Cloudflare, Uber, and household names such as Daimler and Bosch, set up offices across the country. These steps crafted a new ecosystem, that developed across major cities like Lisbon, Porto, Coimbra, Braga and Aveiro, anchored on universities and batches of young engineers. More remote locations as Fundão or Funchal have more recently become hotspots for digital nomads, attracted by the cost and quality of life, and maybe the surf as well.
2021 saw a lot of funding rounds and achievements. Alongside big funding news for Feedzai, Remote, Sword Health, Anchorage, acquisitions were a hot topic. doDOC got acquired by Envision Pharma, Primavera by Oakley Capital, Saphety by Sovos, Abyssall by Ocean Infinity and Huub by Maersk.
Recent years have proven that Portuguese entrepreneurs are able to sail rough winds and reinvent themselves – turning potential obstacles (coming from a rather small country with a limited market) into a great advantage by thinking global from day one and daring to try their luck at it.
Maybe there aren’t any special country-specific factors beyond the fact that ambitious Portuguese entrepreneurs have to think and act globally from the get-go. Maybe there isn’t a “new Berlin” in the making. But one thing is for sure, Portugal has put a flag on the tech map, so be on the lookout for their ambitious sailors and entrepreneurs for the year to come!