Records, Unicorns & Reflections of What Works

This op-ed was first published as a preamble of “Startups in Greece Venture Financing 2021–2022 report), published by Found.ation & EIT Digital. You can download the full version of the report here.

2021 has been a year of new records and heights for the ever-growing Greek Startup Scene when it comes to venture funding, exits, and Unicorns. It is also the year in which yet another transition in venture financing for our emerging market is starting to take place.

New heights

European & US venture capital is taking notice of Greece’s tech startup scene. Overall, the newly deployed capital this year almost tripled compared to the year before. Impressive, isn’t it?

This year was characterized by a record number of follow-on investments. More than forty, to be precise. As the market we operate as Venture Capitalists and Startup Companies is private, perception and momentum are often built based on signaling events such as the size of the next round of financing as well as the mix (foreign and local) of the investors a startup company can tap into. For every euro invested by Greece-originated venture capital funds, two and a half more come from institutional foreign investors, while in terms of investors, there is an almost equal split between Europe (including Greece) and the US (and the rest of the world). Expect this trend to continue next year, as the latest vintages — the pre-seeds and seeds of 2020 and 2021 — will flourish in the next year or so.

Welcome to the Unicorn Club

Greece may also claim its first two Unicorns, with Viva Wallet and PeopleCert, while Blueground is expected to join the club as soon as it finalizes its next financing event. Unthinkable for a Greek tech company just a few years ago, this newly formed club of companies valued above 1 billion ($ or €), may act as a tipping point for our industry in the country. First and foremost, it creates a precedent. As Europe recognizes its next winners may come from decentralized hubs, Greece signals that it has a role to play in the years to come. Secondly, it will validate the real potential of the startup (and venture capital) market as an investable asset class for private capital, that’s so much needed for the long-term sustainability of our market. Thirdly, it will create a fresh generation of investors, operators and talent - willing to re-engage under new ventures and roles.

Walk the talk, let’s fix the inefficiencies

Amid the explosive rise of the Greek startup ecosystem over the past decade, it’s been easy to forgo engaging with the inefficiencies that still hold our ecosystem back. For every 10 startups that get funded, less than two are female-led. Although in the last 18 months we notice a growing number of active angel investors, who traditionally are the backbone of every healthy ecosystem, first-capital- in (the sub 300k region) remain largely underserved and untapped, minimizing this way the inflow of new talent and ventures in the market. Although data is limited, it seems pretty obvious that as far as social and educational inclusion is concerned, the startup economy involves a small subset of the Greek society.

Greece as a Startup Nation

So, us Greek, what are we good at? Can we distill insights for our founder-origin/market fit that could point our north as a nation in the next years? Unsurprisingly, 80% of Greece’s early winners (first realized investments and up rounds in existing ventures) come from the B2B sector. In the Top10 list of all-time exits (by value), only one company claims direct affiliation with a Research Center and/ or University. Seven are coming from the wider B2B sector, while the remaining two are coming from the B2C/marketplace area. This helicopter view of our track record as an emerging Startup Nation draws interesting conclusions as to where the local entrepreneurs should focus in the years to come.