Portugal’s startup ecosystem next challenge

  • Sérgio Massano
  • 6 September 2022

The country is an outlier in unicorn generation (7) and startup generation with 2.159 active startups (2022Q1), 13% above the European average per capita.

The Portuguese Carlos Lopes won the marathon Olympic gold in 1984 in Los Angeles, with a time of two hours, nine minutes and seven seconds. This event is still perceived as one of the most remarkable Portuguese sports feats and created a generation of athletes that believed and worked to achieve that level of excellence.

In many ways, we can find a parallel in today’s Portuguese tech ecosystem, which is spawning companies increasingly more ambitious and successful as they build on the shoulders (and talent) of previous successes.

Although natural in larger countries, the goal of building global leaders is a significant shift in how Portuguese entrepreneurs approach their ability to be competitive in increasingly larger markets. A study on the leading tech companies with Iberian DNA, developed by the Venture Capital Fund I am a Partner in, shows Portugal as a rising tech ecosystem. That, combined with the post-pandemic paradigm shift, makes the current moment a unique opportunity to evolve our ecosystem to the next level.

Portugal is an outlier in unicorn generation (7) and startup generation with 2.159 active startups (2022Q1), 13% above the European average per capita. Strikingly, the Portuguese ecosystem rose with little capital (27% of the European average VC investment as a percentage of GDP), even when compared to Spain (67%). As new funds and tech exits flourish, we should see this percentage rising and, consequently, more unicorns and success stories with increasing weight in the local GDP (currently 1%).

Although Portugal trails more developed European hubs in educational metrics, the 12 founders of portuguese unicorns all have a technical background and 72% hold a master’s degree from Portuguese universities. This may explain why more than half of the Portuguese unicorns follow software-oriented business models and why it has become a technical hub for non-local companies.

Nevertheless, it’s surprising to see such an imbalance in technical vs business backgrounds, particularly when compared to Spain, in which 30% of the unicorn founders have business backgrounds (many of them from top US business schools). This indicates a significant untapped potential in non-technical people who haven’t found the support to create the same level of success.

We can also find opportunities in founder diversity. For instance, the percentage of female founders is still too low at 7%. Although this reflects a broader, structural problem, starting at a much earlier stage, we need to take action now and ensure that similar opportunities are given when starting their ventures, regardless of the background.

Due to the crisis a decade ago, Portugal shifted towards entrepreneurship and the development of startups, allowing for the fast growth of an ecosystem that has attracted the attention of entrepreneurs and investors worldwide. These newly arrived founders have high expectations and ambitions. With the next generation of Portuguese entrepreneurs, they’ll build even more advanced and ambitious projects.

Carlos Lopes’ Olympic gold medal finishing time would see him finish no higher than 4th in Lisbon’s 2021 marathon. Like in athletics, tech ecosystems need to continuously improve to remain competitive and be able to support the next generation of winners.

  • Sérgio Massano
  • Antler Partner, Iberia & Latin America