5 reasons Lisbon’s tech ecosystem has become one of the most attractive in Europe

A successful tech ecosystem helps companies of all levels thrive. In this guest post, Lisbon City Council explains how that’s just what Lisbon provides.

Lisbon is one of the biggest innovation and creativity hubs in Europe. The embryonic entrepreneurial ecosystem of the early 2000s exploded after the creation of the country’s leading startup incubator, Startup Lisboa, and its attempts to build the city’s enterprise ecosystem alongside other notable players in the space, such as Beta-i.

According to data from global VC and business intelligence platform Dealroom, Lisbon now boasts 26 incubators, more than 100 co-working spaces, 26 startup accelerators and roughly 380,000 companies – almost 1,000 of which are startups. Entrepreneur community Made of Lisboa recently partnered with Dealroom to measure the growth of Lisbon’s startup and VC ecosystem. A full report, the State of Lisbon’s Tech Ecosystem, will be launched on November 25.

Although the city ecosystem is at an early stage of growth, we can already count a few success stories. For example, startups Talkdesk and OutSystems are among the most valuable companies in southern Europe, valued at €9.1 billion and €9.5 billion respectively.

That’s an auspicious journey that not even the most optimistic entrepreneur would have been able to predict.

Now a question arises… Is Lisbon ready for the next phase of growth?

Here are five reasons we believe it is:

1. A growing ecosystem

Lisbon’s relatively young entrepreneurial ecosystem allows it to act as a lab for innovative ideas. When combined with the municipality’s cooperative attitude, the city is an excellent location for testing and creating prototypes before launching them in international markets.

There are many foreign startups – such as Cloudflare, Gympass and OLX – that have decided to start operations in Lisbon.

These companies join a rapidly growing ecosystem. Between 2018 and 2022, the value of Lisbon startups grew by eight times, according to the State of Lisbon’s Tech Ecosystem report – a pace far outstripping other European cities, including Barcelona, Milan and Vienna over the same period of time.

When compared to more mature cities, the city’s development is impressive and shows the national bet to back entrepreneurship has been key to Lisbon’s business success stories.

Bar in Lisbon. Image: Manuel Rodrigues Levita

2. Record investment

There are also promising signs of things to come on the investor side of Lisbon’s business ecosystem. With the State of Lisbon’s Tech Ecosystem report showing roughly €380 million raised in funding rounds by local startups, 2022 sets a new record in VC activity – and the year hasn’t ended yet.

The startups that lead the investment rounds are typically from the fintech, healthcare and foodtech industries.

This split is also reflected in Lisbon’s specialised startup hubs.

In the fintech sector, there’s the Fintech House, which has expanded to a new office in 2022. For healthcare, you have HealthTech Lisboa. In the foodtech sector, you have the new Food Tech Hub, a community initiative started by startups Pleez and Volup.

Monthly Made of Lisboa tours are an ideal opportunity to visit and get to know the hubs.

Indico Capital Partners, Shilling VC and Faber Ventures are the most active national investors in Lisbon, with funds up to €50 million. This figure shows that there is Portuguese capital available — crucial for local startups to continue growing — but also that Lisbon still lags behind the amounts registered in European capitals such as London and Paris.

Tram on the streets of Lisbon. Image: Nuno Correia

3. A broad talent network

Lisbon is now recognised as a capital in the tech world.

If Web Summit put the city on the map, Lisbon’s own emerging talent network has cemented its place, garnering the interest of global conglomerates such as Mercedes, Volkswagen and Google, which have formed tech hubs in the city.

There are 43,000 tech students in the Lisbon metropolitan area, and the city welcomes 20,000-plus international students every year. Lisbon also has 15 programming schools – including 42 Lisboa, Academia de Código and Le Wagon – each of which offers intensive boot camps that allow people starting in their careers or considering a change to acquire technical skills quickly and enter the job market at a competitive level.

But it’s not only technical skills we talk about when we reference Lisbon’s tech talent, and job offers from startups in the capital are now more diversified than in years past. Data from Dealroom shows that sales positions were the most frequently advertised job opening, with marketing and communications in second place, and programming in third.

4. Quality of life and a vibrant community

Although the term ‘quality of life’ is a complex and subjective indicator, Portugal — and Lisbon in particular — have several characteristics that make them stand out from the rest.

Thanks to almost 300 days of sun exposure per year, a vibrant cultural scene, and Portugal’s ranking among the safest countries in the world, Lisbon offers an excellent work-life balance – a major priority for entrepreneurs due to the intense requirements of building a company from scratch in the early years of development.

Lisbon’s unique characteristics and growing cosmopolitanism have coalesced into a community nourished by an inexhaustible enthusiasm. Here at Lisbon City Council, with the aid of Made of Lisboa’s team, we seek to strengthen this community by organising networking and capacity-building events throughout the year.

There are also weekly meet-ups organised by volunteers from more than 30 entrepreneurial organisations, including Startup Grind, Coworking Thursdays and Creative Mornings Lisbon.

5. Unicorn Factory Lisboa

Our big bet in 2022 is supporting the city’s entrepreneurial ecosystem as it makes the leap from startup city to scaleup city. That bet is manifested in Unicorn Factory Lisboa.

Unicorn Factory Lisboa is a platform of programmes and hubs inspired by international best practices, designed to support emerging companies and achieve sustained economic growth in Lisbon. It will attract new talent, projects and investment to the city, while also supporting startups in creating solid products, developing business models and processes, and eventually becoming unicorns.

The platform will include four strategic areas: early-stage incubation for emerging startups, growth-stage programmes for scaleups, soft-landing support for overseas startups relocating to Portugal, and expansion support for innovation hubs such as Hub Criativo do Beato.

In fact, if you’re a founder, it might interest you to know that, during Web Summit 2022, the Unicorn Factory launched its scale-up programme and is now taking applications.

Sounds like a great reason to return to Lisbon…

Interested in learning more about Lisbon, but didn’t find the time during Web Summit? Made of Lisboa’s team has got you covered. You can now sign up for the Made of Lisboa webinar – taking place on multiple dates – which gives you an overview of the city’s entrepreneurial ecosystem.

Main image of Made of Lisboa sign on the Praça do Comércio: Lisbon City Council