There’s no question that Portugal – and its capital in particular – is undergoing a massive boom when it comes to promising technology companies and interesting investments these days. That’s been a few years coming, but we’re not blind to the relatively recent ‘next step’ for an ecosystem with undeniably vast potential (yet still a lot to prove).
Hence, earlier this year I flew out to Lisbon to spend a few days among the movers and shakers to learn more about what’s (not) happening and get a sense of what the buzz is all about.
Journalists tend to like to draw comparisons to Silicon Valley – yes, we get it, there’s a really good-looking red bridge in Lisbon, too – or European startup hubs when reporting on the flourishing tech scene in Portugal’s capital, but the truth is that it’s still massively early days over there.
Lisbon is far from “the next Berlin” – it’s the next … Lisbon, warts and all.
And it’s not like the main actors in Lisbon aren’t aware of this, either. In fact, I have to say many of the people I had conversation with during my whirlwind tour in Lisboa were almost apologetic and almost too humble about the current status. And there’s no reason for that.
There are a number of companies that are often cited as Portuguese success stories – Farfetch and TalkDesk in particular – but the fact of the matter is that a lot of these companies are being built by Portuguese founders outside of Portugal (in the aforementioned cases, in the UK and the US respectively). There’s nothing wrong with that, of course, but it can make it a little bit harder to gauge what’s actually happening in Lisbon.
Sure, there are plenty of great companies being built with Portuguese roots, or historical development offices, and it would be a shame to deny this, but I find that it’s equally dishonest to label all of these companies ‘Portuguese’ without noting that oftentimes their operations have largely moved to the US or the UK.
But it’s no secret that Portugal is home to legions of talented developers, engineers and software product managers – you need only look at the amount of big tech corporations (as well as the likes of Rocket Internet) banking on Portugal’s tech talent for product development, quality assurance and customer support.
But commentators tend to focus on how ‘cheap’ that talent is – sure, there are loads of skillful yet affordable engineers and developers in Portugal, but not extraordinarily so in comparison to other regions in Europe. The same goes for the relatively low cost of living.
Furthermore, that talent has started building amazing businesses of their own in recent times, which in turn has attracted people from over the world to start considering Lisbon as their next home and career base of choice. This is far from anecdotal – many people I spoke with moved here because of the opportunities combined with the climate and lifestyle, something I used to hear almost exclusively about places like Barcelona (cases in point: German investor / entrepreneur Felix Petersen and startup advisor Clara Armand-Delille). To wit, the still pressured Portuguese economy plays an obvious but unavoidable role in all the above.
A notable side-effect: there’s currently something of a ‘reverse brain drain’ going on, with entrepreneurs who’ve received schooling (at actual schools, or at startups) abroad and are now more keen on returning to Portugal than ever before, as the number of interesting prospects for employment swells and the government is making it more appealing to return from a tax, residency program and bureaucracy perspective, too.
There’s a also a strong local support network and community that’s working overdrive to help the local tech scene grow into a more mature hub. Key among them are Startup Lisboa, Beta-i, the Lisbon Challenge accelerator and Fábrica de Startups, though there are certainly more.
Also worth noting are the three main investors in high-potential Lisbon startups: Faber Ventures, Caixa Capital (which is also an investor in Faber) and the government-backed Portugal Ventures. They are playing a crucial role in the ecosystem by not just providing capital but also mentorship and access to their respective networks, which is bound to have an accelerating effect on Lisbon’s development as a tech hub.
And the elephant in the room during my visit was that João Vasconcelos, the previous and untirable head of Startup Lisboa, was recently installed as secretary of industry within the Portuguese government. Many are (justifiably, given his track record in support local entrepreneurs) expecting him to move the needle for startups and early-stage investors even more now that he’s in a position to do so from a governmental point of view.
Worth noting: right after my visit, the Portuguese startup community went live with a Startup Manifesto of its own, and just a month ago the country’s government debuted Startup Portugal, a national public strategy to foster entrepreneurship and promote local startups internationally (as discussed in a recent Tech.eu podcast).
Also, I was told Vasconcelos has already played an instrumental role in getting the Web Summit to move from Dublin to Lisbon, which is no doubt to have further impact on the maturation of its startup scene – and more announcements like that will follow.
During my visit to the city, I heard that Factory, the international startup accelerator Startupbootcamp and other organisations are prepping a big push into Lisbon, ImpactHUB is preparing to land soon, and we’ve all seen the announcement that London-based Second Home is going to make the city its second home soon.
It’s also worth noting that the Web Summit is far from the only major event in town – in early June, investors and corporates from all corners of the world will be flying into the Portuguese capital for the Lisbon Investment Summit.
In short, it’s become impossible to deny that this city is absolutely buzzing in terms of tech startup activity – and the funding and exits will surely follow suit in the coming years.
And yet, as mentioned earlier, there’s still a tendency for the true scale-ups coming out of Portugal to quickly establish offices in other countries, where the tech scene is already more mature, and it’s notable that the founders often make the move as well.
This is normal, but it does make the notion of an ever-growing Portuguese tech ecosystem as such less of an established fact. Likely, in the next phase a lot of these founders will re-invest in local talent, enabling Lisbon to ‘take the next step’ in its maturation, but at this point we’re still very much in the early stages.
But that there are interesting companies to visit in Lisbon is a fact that I was happy to experience first-hand. My tour took me to the likes of:
Other Portuguese startups to watch include Zaask, TOPDOX, WIME, EyeSee, Zercatto, Prodsmart, Attentive.us, Liquid and Tradiio. And rest assured that this closing list should be way longer (and will certainly grow in size in the near future).
In other words: Tech.eu will keep a close eye on Portugal, and spend more time there in the near future to stay abreast of what’s happening over there.
Featured image credit: Samuel Borges Photography / Shutterstock