Out of adversity come opportunity and innovation. And this has never rung truer than in Greece, where, despite many challenges and successive crises, the fledgling tech ecosystem has evolved into a key European tech hub within a matter of years.
From economic meltdown and global pandemic to wildfire climate disasters, Greece has shown great tenacity and resilience in rising above harsh circumstances. Today, with the environment ripe with opportunity (including EU support and a new generation of tech founders), Greek companies are determined to make an impact in Europe and beyond, with several native Greek startups seeing exponential growth as they reach greater levels of market maturity. As Greece comes into itself as an emerging tech hub, tech heavyweights such as Microsoft and Tesla are taking notice and setting up shop in Greece, planning to further expand their operations in the future.
The evolution of Greek Tech
The industry’s first major milestones date back to 2017, a year marked by the first major exit by a Greek startup—Daimler’s $43M acquisition of Taxibeat—and by EquiFund’s launch of six new VC funds with over €300M for investments. The subsequent boost to innovation saw the establishment of more than 100 startups receiving at least €210M in funding and the creation of more than 3700 jobs in the first three years alone. The Greek government supported entrepreneurship by implementing business-friendly, startup-focused measures, including reducing bureaucracy, lowering taxes on businesses and employment as well as stock options, and increasing foreign investments and exports. By 2018, the European Commission had awarded Athens the title of “European Capital of Innovation.”
The future of Greek tech is bright
When COVID-19 hit in early 2020, Greece had to increase its innovation, with specialized crisis adaptability and recovery strategies. That same year, the Greek government launched Elevate Greece, its first national startup registry, as well as innovation and technology centers in Athens and Thessaloniki. As a consequence, Greece climbed three places, to 46th from 49th in 2020, in the IMD’s World Competitiveness Ranking 2021, achieving its highest rank on the “Starting a business” subindex. This also led to many Greek angels and successfully exited founders investing back into the ecosystem, while Greece also gained ground as an investment option, with the deployment of more than €72BN in recovery funds. The following year, 2021, saw a massive increase in digital transactions across the country, brought the strategic partnership between Microsoft and MarathonVC to support Greek startups, and went down in Greek startup history as a record-breaking year for the country’s ecosystem, marked by six exits, over €500M in funding, more than 40 follow-on investments, momentous Series C rounds (€154M), and Greece’s first two unicorns. In 2022, Greek tech continued to grow and gain international recognition.
To ensure that the Greek tech and innovation ecosystem continues evolving, new funding has been made available, including €20M from Business Angels Co-Investment Fund, €93M from Phaistos for 5G-related tech, €100M for Series A financing and €60M for tech transfer funds from HDBI, €400M public funds for renewables; and €20M for sustainability and social impact investments. Greek startups are also becoming key drivers of job generation, with the total number of jobs created by startups in Greece (8,536) on par with full-time jobs created by international tech companies with a presence in Greece (8,650). Meanwhile, the number of Greek unicorns has also grown, with at least 17 Greek-founded startups around the world valued at more than $1b, ten of which in 2021.
Investment trends and priorities
Total investment in Greek tech grew 23-fold in a decade, soaring from $51M in 2010 to over $1.1B in 2020. In 2021, as funding rounds increased by a third and fundraising hit a new record, fintech got the lion’s share (with more than 55% of total capital invested in Greek startups during 2021), followed by consumer (25%) and education and talent (8%) startups.
Fintech (55%)—which includes sub-sectors such as payments, banking, and insurance—benefitted hugely from increased integration of new tech into financial services and products during the pandemic, which also accelerated digitalization and remote provision of digital services and, through necessity and, restrictions reshaped how the public interacts with the banking sector and broader financial system.
Consumer startups (25%)—which includes sub-sectors such as proptech and automotive—also exhibited exponential growth and growing popularity.
Edtech startups (8%) responded to global pandemic developments, such as the growing demand for remote/learn-from-home learning and the pressing need for upskilling and reskilling, by developing innovations to support hybrid learning. Ranging from cloud-based e-learning platforms to STEAM solutions and educational games—including the Challedu platform, which offers educational games and facilitates STEAM learning, and Kinems, which provides game-based personalized learning for children with dyspraxia and other learning differences and conditions such as autism, ADHD, dyslexia, and dyscalculia.
Greek-founded startups raised a total of $4.5BN in investments in 2021, exceeding expectations and breaking previous records. Greek tech in particular saw significant developments, and the Greek government aims to further support tech startups in order to boost the economy. Greek tech is also gaining recognition at the global level, with various big tech companies establishing premises in Greece and expanding their activities in the country. At least 138 international companies established a tech hub in Greece in 2021, of which 73 were multinationals representing 18 countries and employing more than 8,000 people in tech positions. This in turn attracts more tech talent and startups as well as top-tier investors willing to invest in this part of Europe.
Indeed, the future of Greek tech is bright, but for the Greek tech ecosystem to continue growing and fulfill its potential, key challenges must be addressed and Greece must continue its digital transformation—including vital efforts to improve connectivity, internet use, and digital public services—while also pushing forward with efforts to reduce bureaucracy and create a streamlined regulatory framework for startups, introduce startup visas, provide appropriate incentives and foster more local investments, and reverse the brain drain that has cost the country almost half a million people since 2010. All this requires the government’s effort to pay attention to the new ventures and create a startup model that facilitates a conducive environment for growth and survival in the Greek market.