In the first of a new serial focusing on metropolitan eco-systems, TechCrunch Editor-at-large Mike Butcher gets under the skin of one of Europes hottest startup metropolis . em>
During the last financial crisis Portugal was one of the hardest hit countries in Europe. After a long post-war tyranny until the 1970 s, and a slow economic arrival during the course of its 80 s and 1990 s, the 2008 global recession was a body blow to the country, alongside Italy, Greece and Spain. But then something unusual happened. Like a welter-weight boxer, it started to use its tiny size in favour of the proposal, perforating above its load in a counter-attack produced largely by its young person. They realised that they would have to use entrepreneurship as an locomotive to generate their futures, if they were to survive. Inside cafes and the Fado barrooms, laden with ancient Portuguese tiles, they gazed to the Web. And induced their plans.
Being thrown into the fire of an economic recession induced for a much more dynamic culture that many spectators had typically come to expect from a southern European country.
When the country had to turn to the European Union for a bailout in 2011, Portugal was forced to implement harsh austerity measures. Some 485,000 Portuguese, particularly young university alumnus, left the country during the course of its crisis to try to find opportunities abroad. They went to Germany, Brazil and even to the former African colony of Angola. Around 60 percent returned.
Today the unemployment rate has fallen from 17 percent in 2012 to 12 percent. Meanwhile, the governmental forces grew taxes significantly, liberalized the job market, laid off civil servants, reduced wages for public laborers as well as pensions and social services.
But the crisis also unleashed a new creative vigor from within the Portuguese psyche. For instance, a new center for artists was opened at the foot of the fortress looks over the city. And the EUs Committee of Regions bestowed the city with its European Entrepreneurial Region of the Year honor for 2015.
There are reasons behind the success narrative. People are well-educated in Lisbon, and salaries are lower than in other European metropolitan areas, as are living rates. A luxury hostel whose epithet articulates everything about this new feeling: The Independente. It looks out over the concourse of colorful constructs on Castilo Hill. And startups are based in old-fashioned constructs with beautiful tiled walls in the cobblestoned streets of downtown Lisboa.
And Portugals long record of maritime investigate and breakthrough didnt hurt. Striking outing new territory is in the Portuguese DNA. And they had something else that was a crucial ingredient. Something that their Southern European cousins didnt have: a in-built facility with the English speech. It is not merely taught in schools, but unlike neighbouring Spain, which has a large population and can therefore bear the economic cost of having English movies and TV proves translated, little Portugal could not.
This familiarity with English is a huge strength for two reasons. Firstly, this induced Portugal able to trade internationally more easily. And secondly: the average taxi or Uber driver as well as the average government worker expresses English, something you wont find in Barcelona or Madrid. Suddenly, its far easier to access as an ex-patriot entrepreneur, come to create a business in the sunny climes of the Portuguese sun.
This combination set Lisbon in exactly the same surrounding as Berlin located itself in the mid-2 000 s, when ex-pats and artists started to flood the city with creative industries, and, crucially startups.[ Ad break: grab 2-for-1 tickets on 2-for-1 liberate is April 5 , midday CEST, to Techcrunch Disrupt Berlin]
Lisbon boasts an iconic suspension bridge which looks like the Golden Gate Bridge, bronzed surfers, trams, mountains and a vibrant engineering industry. Remind you of somewhere?
Today in 2017 Lisbon scores well on access to ability, affordable housing, and adequate public transportation( not to mention climate ). And lets not forget that the Bairro Alto is a historic picturesque one-quarter dating from the 16 th century, whos streets are lined with tiny restaurants, Fado-playing barrooms, pubs and cafs, which are quiet during the day, but transformed at night into the citys vibrant nightlife quarter.
Beautiful old-fashioned venues stand side by side with striking contemporary adds-on. But the city is re-animating these venues, such as the 16 th-century Palcio de Pombal which now yearly houses the Lisbon Investment Summit.
No surprise then that the European Digital City Index rosters the top key features in Lisbon as the low-cost of living and the high quality of life.
Another factor has played into the citys hands: Because of the countrys tiny population, Portuguese startups launching with an eye on international expansion from day one, continuing the tradition of this small, seafaring country. In that respect its far closer to the United Kingdon in mindset.
Its these combination of factors that is leading to an explosion of startups in Portual and Lisbon in particular. You could say this is becoming the Berlin of the South.
In 2016 VCs endowed merely $18.5 million in nine deals, according to Preqin, a world investment research corporation. Although these amounts are small by comparison internationally, this represented a sixfold jump from 2015.
And a 2016 study backed by Allianz Kulturstiftung, the German insurance companys foundation, ranked Lisbon as the fifth-best-performing startup community in Europe, ahead of such stalwarts as Stockholm and Dublin.
Lisbon likewise scores well in terms of its world creative class, as coined byinfluential academic Richard Florida. Creative industries are a massive driver of economic rise today, and led to the rejuvenation of Londons East End. But Londons huge rate hikes in recent years( and lets not even go into Brexit) has left it with a growing problem.
The latest statistics present more young people are moving out of London than at any time since records began, because ofthe cost of housing, whichhas recognized leases rise much faster than wages. Some4 0 per cent of Londons music venues have closed in recent years.In the US, New York creatives and San Francisco tech entrepreneurs are moving in droves to Los Angeles, where its cheaper to live well, and in a city with a greatart and music scene.
And whileBerlin continues to pull in these creative classes from more expensive specific areas of Europe, many are now looking to Lisbon as an alternative.
This year, for example, Europes largest engineering seminar, the Web Summit, will reach the city for the second time, having attracted over 53,000 people to it in 2016, and demonstrated the city can hold those amounts and survive.
Some traffic congestion, a strained Metro and a handful of logistical issues at the venue wont be enough to stop Web Summit from be retained in Lisbon until 2020. And the deal could be extended by a further two years. More than 53,000 people from 166 countries, among them 15,000 companies, 7,000 CEOs and 700 investors, flocked to Lisbon for the event, which was said to generate more than 175 million in revenue for the city, dwarfing the 35 m Web Summit was rumoured to have brought to Dublin, where it started.
Having drew off such a huge event, literally showcasing the city, its fair to mention even more will come in 2017.
Second Home, perhaps the ultimate proclamation in creative class spaces, was announced for the city last year, but actually gets moving this year , reform and opening up in thehippest one-quarter of the city.It will be housed inside the Mercado da Ribeira, joining a number of co-working and artistic spaces in the town including Coworklisboa and Village Underground Lisboa. The latter links between Shoreditchs iconic Village Underground will be made out of shipping receptacles and disused buses.
Furthermore, Factory, which created a number of iconic startup spaces in Berlin, has also put down cankers into the city. At the same time international startup accelerator Startupbootcamp is rumoured to be arriving, as well as ImpactHUB.
In fact, a strength not a weakness of the Lisbon startup scene is that its not just about Portugal or Lisbon. Indeed, its no accident that a London-based Second Home might want to expand there.
The six-story Startup Lisboa house started as the citys primary startup hub, which from 2011 has acted as the citys founding startup incubator. Around 60 companies are based out of the six-story house where regular events and seminars are likewise maintained. Startup Lisboa is an NGO with support from the public sector( Lisbon Municipality) and the private sector as well. The company has supported more than 180 startups since it started.
Fbrica de Startups, a four-year-old accelerator, is manager up by Antnio Lucena de Faria, and concentrates on startups from Portuguese-speaking regions such as Brazil, Macao, and others. In March it will extend Tourism Ideation Week to create startups for its five-week Findings accelerator program this summer.
This will be the first Portuguese outpost of Impact Hub, whose world system of socially-minded co-working spaces spans some 70 metropolis. Its arriving in an vacated pavilion in the Beato Marvila district, with desk rentals on offer for up to 300 entrepreneurs for a paltry 80 euros a month.
And Beta-i, which operates Lisbon Challenge, has taken over a huge former post office building in the very heart of the city. Spread over several storeys, this is likely to become a super-hub for startups in the region. Its likewise only announced that its consolidating withTetuan Valley, a Spanish accelerator, creating an Iberian accelerator and usingEuropean Innovation Academy( Berkeley+ Stanford) methodologies in Lisbon.
NEW INTERNATIONAL TIES
The ties between Lisbon, London and other European metropolis are actively being fostered by some of the citys movers and shakers.
For instance, you will often visualize Alexandre Barbosa, co-founder of Faber Ventures grabbing coffee with fellow VCs in London. Or Beta-is Pedro Rocha Vieira or Ricardo Marvo taking its latest crop of startups on a roadshow to Londons Google Campus, precisely because Lisbon is forging close ties with London startup megacity. Or Filipa Neto, CEO of Chic By Choice, attending London Fashion Week.
At the same time you might well bump into Felix Petersen, likewise of Faber, in Berlin, where he is doing a roaring trade attracting talent down from Berlin to Portugals capital. Or perhaps you could run into Stephan Morais of Caixa Capital, shepherding a number of young Portuguese startups around Davos( one of the only countries to do so ). You may also grab coffee with tech PR and startup consultant Clara Armand-Delille, in a coffee shop over-looking Lisbons waterside key, or perhaps in a Parisian coffeehouse. These things are not happening by accident and these ties with the European ecosystem are getting stronger by the hour.
And “the member states national” and city governments are actively fostering this ripple of internationalism, which is in part leading to the Portuguese diaspora from the recession returning, as well as ex-pats starting to populate specific areas of Lisbon. The government has been virtually relentless in making it more appealing to returnees, with tax breaks, residency programs and easier bureaucracy.
The Municipality of Lisbon has been bending over backwards to incentivize entrepreneurs to start their companies in the town. These motivations include a reduced tax rates for startup firms, which can be as low as 7.5 percent, while investments of up to 5m can enjoy tax deductions of 20 percent. Corporate filing red tape, too, has been simplified to a simple online process.
A few years ago when the Mayor of Lisbon was asked by a local accelerator about easing access to office room he simply handed over 30 year rentals for disused municipal buildings.
A key startup preach is the affable Joo Vasconcelos, the former head of Startup Lisboa, who has long championed the scene and is now in a key position of power as the new secretary of industry within the Portuguese government.
The Portuguese startup community has also not sat on its hands, making regular blogs and media out of the tech startup scene, and even creating its own Startup Manifesto.
The government responded with Startup Portugal, a national public strategy to foster entrepreneurship and promote local startups internationally.
It was at Web Summit that Portugals Prime Minister Antnio Costa launched a 200 million ($ 220 million) fund to co-invest alongside VCs in local startups and foreign companies that relocate to Portugal, doing it with 150 local founders standing behind him. The message was extremely grassland: be coming home with Lisbon and located your corporation there. Any undertaking fund of all the countries is eligible to request matching funds for a single investment as long as the startup is located in Portugal.
The funds will be called 200 M( its 200 million euros) and is part of a bigger push to set $440 million overall into the countrys tech scene over the next two years. Delivering Web Summit over from Dublin was part of that struggle is well.
Lisbon was the first European Capital of Entrepreneurship in 2015, which led to a whole slew of new initiatives such as the Empresa na hora, which permits anyone to create a new business inside an hour online.
With Brexit looming over the scope, after the UK government formally voted to trigger Article 50 to leave the European union, the issues to is, will companies start to figure in EU nations like Portugal more easily? And will Lisbon join the ranks of Dublin, Amsterdam and other EU metropolis as a startup hub? The simple answer is yes, given that the UK will lose proportion if not all its attractiveness as a springboard for expansion in Europe. According to VC firm Balderton, over 40 percent of the founders of British startups deserved university degrees outside the two countries, which attains them far more likely to move around anyway( something apparently lost on the government ).
The quality of technologists is great in Portugal and the competition for ability is still limited( with 31% unemployment for under 25 s, working for a startup sounds like a great option ). A government program called Inov Contacto sends a few hundred Portuguese alumnus each year in various regions of the world to work inside companies abroad, thus broadening their international aspiration and operational suffer. Portugal also has a glean for the intellectual diaspora that was previously trained abroad, and now hankers after the old country. After their stint at Stanford, or Goldman Sacs, there is a culture attachment that produces people to want to come back to Lisbon.
The fact that developer rates are much lower in Portgal has not moved unnoticed. Portuguese entrepreneur Carlos Silva and US-born partner Jeff Lynn launched their mob equity platform Seedrs in London, but decided to base their engineering ability in Portugal. That entails the two countries is to intervene in the grades of Barcelona, Munich, Vienna and others as engineering hubs. But whereas these have plenty of ability, what they dont have is common use of the English speech in every-day life. That attains doing business simpler and likewise attractive for moving into the city from abroad.
Portugal now has a budding placed of hometown heroes. From Jose Neves of Farfetch, to Henrique de Castro of Google/ Yahoo fame to Carlos Silva of Seedrs.
Early stage funding generally comes from Beta-i to Faber to Portugal Ventures as the most visible and active local funds with Caixa being an active musician in direct investments at later stages. More importantly non-Portuguese funds are producing substantial rounds in Portuguese based companies. Lisbon/ London based Seedrs recently has raised 7.5 M from Augmentum Capital and Woodford Patient Capital in London. Unbabel moved from Lisbon to Y Combinator and sauntered out with checks from Google Ventures and Codacy won the 2014 Web Summit competition. And Rocket Internet has softly built its own operations center with several hundred employees in Porto.
Faber Ventures was founded by Alexandre Barbosa. According to him its part startup studio, part investment platform. Theyre managing 11 m as a first pre-series A fund, and do typically 200 -3 00 k Euroos as first ticket( 100 k if pre-seed) and have always followed on in series A as co-investors. They have 19 companies in the portfolio and are now growing for a second vehicle, while still doing investments.
Lisbon Challenge, operated by Beta-i, has been acknowledged as one of the top five most active investor programmes in Europe. A number of startups have emerged from it to join the likes of TechStars, Y Combinator and Seedcamp. And 40% of those coming out of Lisbon Challenge have secured VC investment, increasingly from the US. The Lisbon Challenge seminar is hosted on the banks of the Tagus river in a former warehouse.
Meanwhile foreign investors inspect the capital city frequently to encounter whats going on, with Web Summit now being a perfect annual opportunity to check in on the city.
There are no less than seven Seedcamp companies from Portugal: Simpletax, Codacy, Hole1 9, Crowdprocess, Cashtag, Zercatto and Popcorn Metrics.
Government Investment organization Portugal Ventures has a 450 million fund places great importance on investing in innovative tech companies as well as startups in more traditional sectors. So far it has 105 Investments in 96 Companies.
Then there is the BGI( partnership MIT-ISCTE ), an international accelerator sent at tech entrepreneurs, startups& spin-outs.
Finally, there are the startups.
Portugal did not start from scratch. Long before Lisbon became the trending tech hub, there already were many tech related companies in Porto and Coimbra, for example. But Lisbon brought to the scene the inspiration from tech hubs such as the ones in London and Berlin. But now the city is making solid startups virtually from scratch.
After growing down a position at Google, Jaime Jorge co-founded Codacy with Joao Caxaria, to make algorithms who were able to automatically correct corrects in application code for scores of businesses worldwide. They now work with world giants such ash PayPal and Adobe.
Portugals most effective and efficient was working for consulting firms in major capitals like London, but now they raise money locally and launch globally.
Its not as if Lisbon cant produce big companies. Teleperformance is a global leader in outsourced see middles managing sales, support and all other functions of customer relations, and now utilizes 150,000 the workers and has 2.4 billion in revenues.
Meanwhile Porto is becoming a reference in the Portuguese ecosystem.Veniam, AddVolt, Hype labs( with Hype Labs going to AngelPad in the US) andknok healthcare the uber for doctors securing funding.
Other startups have also recognized the benefits of the city. Hole1 9 is an international social network for golfers. Uniplaces permits students to journal housing across Europe. Feedzai utilizes machine learning to automatically spot scam for patrons globally. CrowdProcess has an AI platform that enables hedge funds and banks to predict when fixed income assets will default.
( A great space to keep up with startups form the city is by checking Made Of Lisboa)
This has raised $28.94 M in 4 Rounds from 8 Investors. Uniplaces is creating a trusted, world label for student accommodation. With Uniplaces, students can journal readily and safely as the Uniplaces team verify every student home on the website.
Has heightened $1.6 M in 2 Rounds from 6 Investors. Codacy is an automated code critique tool that helps developers save time in code the examinations and oversee technological debt.
This has raised $2.11 M in 4 Rounds from 3 Investors. Tradiio is a music app for web and mobile which mixes streaming with direct-to-fan repetition payments for artists.
This has raised $4.91 M in 2 Rounds from 4 Investors. Its an independent Android app store that allows developers, OEM, telcos, and integrators to create and oversee their own Android store.
This has raised $1.89 M in 3 Rounds from 3 Investors. Muzzley is your intelligent single entering phase for your connected devices. The structure predicts your actions with your connected devices.
Backed by Faber and Portugal Ventures to the song of more than $800,000, this is supporting online storages by growing them into social patronize networks.
iOS/ Android app for fashion-conscious dames( primarily) who want to discover the latest and greatest trends in what to wear and what not to wear.
Chic by Choice
Lets you rent out high-end designer gowns for a small percentage of the retail price. CEO Filipa Neto could operate anywhere in Europe, but spreads her time between London and Lisbon. Shes grew half a million euros in venture capital to send Haute couture all across Europe.
An ecommerce platform connecting fashion-conscious patrons with a worldwide network of high-end stores and founded by Jose Neves in 2007, Farfetch has raised more than $304.5 M in 6 Rounds from 15 Investors. These include Advent, e.ventures, Index and, very recently, Conde Nast and Vitruvian Partners. Farfetched is Portugals biggest( recent) startup success so far.
Known in the Portuguese market as MEO music due to a white-hot label is being dealt with the dominant Portugal Telecom. It has a TV app, enabling customers to watch music videos and generate video playlists on their TVs. They are teaming up with Samsung to collaborate in Africa.
Backed by Seedcamp, Kima Ventures and Frontline Ventures this connects the web browsers of a large number of participating consumers and grows them into virtual supercomputers.
Unbabel enables multilingual communication across 28 languages with a mix of artificial intelligence and a mob of 50, 000 mobile linguists, included within platforms like Salesforce, Zendesk, Mailchimp and Facebook Messenger. Vasco Pedro, co-founder and CEO of Unbabel started the company on a surf trip-up, and the whole corporation still makes the waves once a month.
This wants to help farmers develop hydroponic plants in a smarter space, using a combination of hardware appliance, cloud-based data and AI.
Talk desk has raised $24.45 M in 4 Rounds from 5 Investors. Investors include Storm Ventures and DFJ. Co-founders Tiago Paiva and Cristina Fonseca grew the first round of money by entering a developer contest. The corporation now has several thousand customers including DoorDash, Weather.com, Edmunds.com and Anki.
This Portuguese fraud protection startup which has secured $26.13 M in 5 Rounds from 8 Investors. Its backed by Oak HC/ FT, Sapphire Ventures and Espirito Santo Ventures. Their application identifies danger and cubes scam earlier.
Improves Wifi by growing vehicles into hotspots. Its raised $26.9 M in 2 Rounds from 8 Investors. It was founded by Joo Barros, Susana Sargento, Roy Russell and Robin Chase, co-founder and former CEO of Zipcar.
This offers a fiscal handling platform for small and medium-sized firms that attains day-to-day handling lighter and financial planning more precise. In 2014, MagniFinance was one of the finalists of the International Acceleration Program Lisbon Challenge and won the Caixa Entrepreneurship Award, receiving an investment of 100, 000 from Caixa Capital.
They expended a year developing a platform that integrates web analytics tools without having to write a line of code. Cofounder Paul Boyce is an Irish national who fell in love with Portugal while on holiday and chose to set up his new business in Lisbon. He convened his co-founder Lus Correia at a Lisbon startup event.
This uses machine learning during live broadcasts to digitally replace billboards with targeted advertisements.
Other Portuguese startups to watch include Zaask, TOPDOX, WIME, EyeSee, Zercatto, Prodsmart, Attentive.us, Liquid and Tradiio, LineHealth.
Lisbon has good transport links the airport is just 15 minutes by taxi from the centre of city and fast Wi-Fi hastens add to its appeal.
COST OF LIVING
Lisbons has a genuinely low-cost of living. Its around 75 percent less costly than London. Which are more likely to make it about 50% as less costly than Berlin. Its unusual to pay much more than 1 for a coffee or brew, while grocery prices are virtually 25 percent less than other European cities.
Lisbons universities, such as Instituto Superior Tcnico, are now turning out entrepreneurs instead of corporate drones. Lisbon benefits from two main universities and one specialist polytechnic association, which pump out up to 100,000 alumnus a year versed in designing, growing, and programming. Indeed some startups have roles right by the universities for this very reason.
Other than Web Summit, majors startup events in Lisbon include the Lisbon Investment Summit, both a seminar and finale of the Lisbon Challenge accelerator. Likewise Productizeda product handling event. Developers can also check out the Lisbon Scala Conference.
Liberdade 229 Fun and friendly coworking place filled daily with an interesting mob of differing backgrounds.
Entrepreneurs Break An informal networking event put in with entrepreneurs to provide you with startup tools and insights.
Product Tank An informal meetup that brings together the local product community in each of those cities.
Village Underground A coworking and events room for creative activities in the heart of Lisbon.
A short, sharp-witted espresso in the capital city will cost 60 pennies to one euro. A railway line associating Lisbon to Cascais takes you to several wide-ranging beaches for sunlight bathing or surfing, inside 15 minutes. The world-class surfing is just up the road in Ericeira the town regularly hosts a round of the international surf competition ASP World Surf Tour. Cascais has a village feel to it, and a short drive away in the hills are the Disney-like towers of the Sintra palace( and a lot of sightseers ).
The Beta-i Newsletter, writes to Maria Almeida the Almighty Duchess of Content at Beta-i.
Tek SAPO TeK Sapo is one of the main technology portals in Portugal
Hugo Seneca, Impresa Hugo is with the IT Magazine that produces the Portuguese market.
Ana Pimentel, Observador Ana is a journalist from Observador and specialises in startups and VC
Ana Rita Guerra, B! T Magazine Ana Rita specialises in engineering for one of Portugals top magazines.
Joo Ramos, Expresso Joo specialises in IT , telecommunications, entrepreneurship and innovation topics.
Cervejaria Ramiro Shellfish heaven
Caf De So Bento Great steak!
Pizzeria Casanova Wood-fired pizza
Penso Amor A really cool spot to grab a drink.
LuxFrgil This is one of Lisbons biggest nightclubs, with three main areas, a association, bar and roof.
Music Box Great club under a bridge in the centre of town
INTERNATIONAL SCHOOLS IN LISBON
Carlucci American International School of Lisbon
International Preparatory School
St.Dominics International School
St. Julians International British School
Lyce Franais Charles Lepierre
Deutsche Schule Lissabon
[* Investment data via Crunchbase)
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