VWV Volumes #23: Jannis Alabasinis Talks about the Greek Start-up Scene
Analyst Jannis Alabasinis dives into how the entrepreneurship and VC ecosystems fairs in Greece in relation to macroeconomic influences and unique differences from other markets.
It is no secret that the aftermath of the 2008 financial debacle left several countries with an unsustainable amount of debt that could not be serviced, one of which was Greece. Interest rates rose constantly and the typical methods of financing became unavailable.
To avoid these impacts, the Greeks had to compromise with harsh austerity packages that aimed to cut government spending and increase tax rates. It is then justifiable for one to assume that entrepreneurship was the last thing that the people of Greece had on their minds. At first glance, this crisis seems like an impediment to entrepreneurs, but what if this were the very catalyst that drove the Greeks towards entrepreneurship?
At a time where most people tried to mitigate risk, numerous entrepreneurs in Greece had the courage to venture out. Fast-forward to 2022 and these individuals have created a healthy and promising startup ecosystem that has encouraged an optimistic outlook for the Greek economy. In 2021, more than 500 million euros were invested in over 70 Greek startups,1 some of which with valuations that are near the billion-dollar benchmark: PeopleCert, Blueground2. Even more impressive is J.P. Morgan’s agreement to acquire a 49% stake in Viva Wallet, valued at more than 2 billion dollars.3
The future seems even brighter as the Greek government has committed 200 million euros to further supporting startups. This figure may seem small for someone from VC hubs in Silicon Valley, London, or even Berlin, but Greece is a country of only 10 million people and, given its economic standing, the achievements of these entrepreneurs are worth applauding. However, a question that arises from this recent success follows: how did these entrepreneurs overcome the barriers of such a cruel crisis?
Greece has advantages that cannot be easily found in other parts of the world.
Firstly, although the cost of engineering and talent is significantly lower than, for instance, San Francisco, Greece possesses an impressive pool of untapped human resources. It is true that Greece has suffered heavily from ‘brain drain’4 in the last decade, but there has been a reversal of this trend in recent years, heavily supported by the government’s tax incentives for those considering relocating to Greece.5
Furthermore, Greece’s relatively small market has allowed for companies to capture initial market shares and attain market leadership. Thus, the process of scaling businesses becomes much easier as the companies enter new markets with confidence.
Lastly, due to the lack of funding, entrepreneurs had to learn to be flexible and resourceful, producing companies that can easily adapt to any market.
Closing Thoughts
Greece still has a long way to go in order to be considered a hub of innovation and entrepreneurship.
As an MD from Insight Partners said, “A decade ago they were almost non-existent in our funnel, but the number of Greek companies that show up in our pipeline meetings today has been increasing.”6 This is a trend to be excited about.
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Maria Paravantes, Greek Startups Tap into More Than €500m in 2021, GTP Headlines Media, 10 Dec 2021.
George Georgiopoulos, JPMorgan agrees to acquire 49% stake in Greek fintech Viva Wallet, Reuters, 25 Jan 2022.
“The emigration of highly trained or intelligent people from a particular country.” Oxford Languages
Brain Gain, Hellenic Observatory, The London School of Economics and Politics.
Capital Link Inc, 2020 - Capital Link 22nd Annual Invest in Greece Forum -Entrepreneurship in Greece - Success Stories, Youtube.