The state of the Portuguese Ecosystem

Answers to questions asked by Ines at Below are all my answers, with the info I have as of this date.

What is the role of different players (CVCs, VCs, state-backed VCs, universities, other)?

To me, local VCs play a nice, but limited role in the ecosystem, whereas universities and a few local companies have historically played bigger roles.

Meaningful Corporate VCs are EDP Ventures and SONAE’s BrightPixel (formerly SONAE IM). EDP Ventures was an early backer of Feedzai, and this was way back when EDP was still a publicly controlled company. SONAE has invested in quite a few local companies, however my perception is that historically they’ve had more success investing in international startups in SONAEs areas of interest (Cybersecurity, Telco, Retail Tech).

The main non-corporate local VC is Armilar, formerly ES Ventures, which started as a quasi-independent Corporate VC and is now independent. They backed Outsystems and other successes such as Feedzai. Others worthy of mention are Shilling and Indico, which are earlier stage and smaller.

Overall, though, I’d say the newer local startups rely less on that PT capital than before. This is because international investors know PT talent and successes, especially in the SaaS space.

On the flip side, Universities are permanent feeders of the community, as talent is probably #1 reason for PT’s success in tech. Lisbon has 2 major universities in IST/ Técnico and U Nova, there’s also Coimbra, and the North has 5 reputable universities too - FEUP/UP, Faculdade de Ciencias/UP, ISEP, U Aveiro and U Minho/ Braga.

I think it’s important to recognize that historically a few companies were instrumental to the success, such as Blip - the nearshoring IT of Betfair Paddypower. They gave our talent exposure to the hardest, more modern problems in IT, and a new way of working.

Are there any main gaps in the ecosystem (e.g. where more capital is needed)?

I don’t think Capital is a local limitation. I think our entrepreneurs are not very exposed to the area of Selling/ Marketing (for sales), as our local market lags in buying software. Growth roles have only really appeared recently here, and Sales departments and knowledge is almost inexistent.

The business talent is lacking also because there’s still not enough startups. We need more founders to create more companies, more talent, etc.

Is it dominated by local players? In what way are international players present?

I don’t think the (investment) market is dominated by local players.

The Pre-seed/ Seed stage has a lot of angel money from PT players, but everyone pushes rounds to be as international as possible. I don’t think the local VCs can even reach most companies.

One of the reasons is that local VCs aren’t perceived as being “notorious” (say like a Sequoia, Index, Accel), and in part because VCs themselves aren’t themselves notorious; few have a meaningful online presence, and those who do are inssuficiently vocal about what they do and how they do it.

How meaningful are the geographical differences in the country (north/south/center)?

Talent-wise, very little, even though its more competitive around Lisbon. Culturally the north is more entrepreneurial and industrial, and the south more connected to the State, but that isn’t immediately observable in startups.

Are there verticals/sectors that are particularly stronger than others?

Software is the only segment we have become on par with international markets, with many successes (Outsystems, Talkdesk, Feedzai) and many others in the making.

Exceptions are Farfetch (Luxury eCommerce) and SwordHealth (medical).

Are the relationships with Lusophone countries relevant in the ecosystem?

Not currently, with the exception of Talent - we receive lots of people from Brazil.

Any other characteristics that seems unique or characterise the Portuguese ecosystem?


What are the major advantages and challenges of starting a company in Portugal?

Advantages: Easy access to technical talent; Great weather, safe place to live.

Challenges: local bureacracy for companies and people, personal income taxes are high for the IT salary levels; stock options aren’t really understood; somewhat of a soap opera culture. We tend too much to details, who said what, and we don’t focuse enough on “what needs to be done”. This permeats our culture, from politics to business: the important things don’t get fixed, we like to discuss.

How is the relationship between corporates and the tech ecosystem in Portugal and internationally?

Yikes, too broad of a question.

Portugal has produced 7 unicorns since 2015, which is a relatively high number when looking at other southern countries. What do you think are the main drivers of these recent successes?

“Produced since 2015” is strong; they became Unicorns recently, but many of these companies are pre-2015. The reasons for success are, as always, talent and grit:

Being a small internal market, PT people immediately go out, and these founders all seem to be extremely driven to success. (this doesn’t justify any and all paths taken ofc).

Many companies start in Portugal but eventually move their HQ to either the US or UK. That is not the case in some other countries, such as Sweden. What do you think drives this behaviour and do you see it changing in the near future?

Many reasons:

How is the impact investing scene in Portugal?

Small i’d say; no big things to mention.

How is the recent macro impacting VC investing in Portugal?


What are the biggest opportunities for the ecosystem for the next 5-10 years?

Train more people into tech, especially in areas such as Design, Robotics/Hardware, App-building, ML/AI.

At the government level, push for starting and running companies lean, or invest in startups that solve this.

I think the 4 most unexplored verticals are Medical (e.g. Swordhealth) because we have lots of talent; Travel because we’re a big tourism destination; industry in Textile/Wine sectors, given our production too ( is a good example there); and Mobility bc we’re already the #1 bicycle producer in Europe, and ebikes are growing a lot.