Pedro Rocha Vieira is co-founder and CEO of Beta-i, a group which incubates, mentors and grows startups in Lisbon and Portugal, which have risen among Europe’s tech hubs. Here he shares his thoughts on that scene, how government is waking up to entrepreneurialism and how events like Beta-i’s Lisbon Challenge can help lift the entire scene to new levels.
How has Lisbon’s startup scene developed over the past few years?
Right now Portugal is set on rebuilding itself as a haven for entrepreneurs. It is rapidly emerging on the European startup map. Five years ago in Lisbon, very few people considered becoming an entrepreneur, most didn’t even know what a startup was. Incubators, coworking spaces and accelerators didn’t even exist at the time, not to mention that fundraising in Portugal was practically non-existent.
Nowadays, it’s fair to say Lisbon is one of Europe’s most promising tech startup ecosystems. So many new businesses, so much foreign talent moving here, so much attention in the press. Some international media coverage is even comparing Lisbon to San Francisco or Berlin, considering it as one of the best cities to work in Europe. According to Paddy Cosgrove, “Lisbon is like Berlin five years ago, but with a southern European climate”.
If we look at 2016, with all the buzz we can already sense in turn of entrepreneurship and startup related activities in Portugal, also because the Web Summit is coming to Lisbon, its easy to sense that this will be a year full of major challenges, but this can also be the year that sees the ecosystem mature and cement its position.
Lisbon as also been able to attract major operations from international startups like Zomato and Sherpany and companies like Teleperformance, with over 6.000 employees in Lisbon.
Is the scene really focused on Lisbon, or are other cities now flourishing too?
Lisbon is kind of the ‘new kid in town’ in terms of the European landscape, but we think the rest of the country is also taking advantage of this wave. Portugal is a small country, it takes 4 hours to go from one end to the other, and Oporto is a 2h40m drive from Lisbon, or 45mins by plane, so when you come to Lisbon you can pretty much meet with other startups not Lisbon based, for instance. So, as a hub, Lisbon powers the rest of the startups scenes in other cities.
One of the most interesting stories is probably Talkdesk, that started here in Lisbon with a simple idea. They ended up joining 500 Startups and now they’re really taking off. They integrated with Salesforce and got a an investment of 21 million dollars. They currently have offices in San Francisco and Lisbon.
Uniplaces also stood out by disrupting the student accommodation business. They’ve grown into a 150 employee company and they’re currently in more than 30 cities across Europe. Uniplaces also raised $24 million in Series A in last November.
Another example is Line Health, the creator of a small pill dispenser who recently went through a major re-branding and product improvement after getting a grant from German big-pharma company Bayer.
We should also mention Unbable, a scalable advanced solution for the translation of dynamic content (they all went trough Lisbon Challenge), and Tradiio, a music platform to help people get to know new artists, that is getting some interesting traction as well. Feedzai, Venian, Seedrs or Attentive are also very interesting success stories that are becoming our startups champions.
– Has it been tough to find adequate levels of seed and series A funding for Portuguese companies? Is there a big gap in funding where companies must look abroad after seed rounds?
The bulk of Portuguese scaleups (17.42% of the total) are located in Lisbon, were it’s easier to get access to venture capital. The companies based in the capital city raised about 60% of the total money made available to Portuguese scale-ups.
The truth is, in recent years, Portugal has developed a significant number of world-class startups and programs like Lisbon Challenge, an ambitious 10-week acceleration program aimed at eager international tech startups, are key to this progress, for they help a large number of entrepreneurs develop and enhance their business ideas (Lisbon Challenge was recently elected the 2th most dynamic European accelerator, by Fundacity).
If we consider all the startups that went trough the program, they raised 50 million euros of investment in total (from our 175 ‘alumni’ startups, 40% got invested, with three going into YCombinator, three into TechStars and seven into Seedcamp).
But yes, later in the game, to raise the necessary big rounds of investment, entrepreneurs have to go abroad and talk to international investors, if they want to go global.
Which are the biggest lessons you’ve learned running Beta-i’s incubator programs?
Being an entrepreneur is hard, across the globe, but the good thing is that in Lisbon you get to know a lot of amazing people who are always willing to help. You can also relax by the beach and go surfing in the weekends. You have an amazing quality of life here and low costs of living – which is really helpful when you’re building your own company.
For us, fostering great ideas and watching them grow to achieve their full potential is key. Because the world is changing, but the startup world is changing faster, we challenge teams to embrace change, to take off their shoes, to make things happen, and above all we challenge entrepreneurs to be the best they can be. At Beta-i we believe in the power of “i”, for innovation, imagination, initiative, inspiration, ignition, investment…
On the other side, the fall-out rate is sometimes hard to witness. Even founders with solid ideas and good business backgrounds can´t sometimes make it, but we have to accept those ‘casualties’ are part of the virtuous cycle of ecosystem growth.
On the plus side, we could point out the sheer amount of amazing ideas and concepts that we are exposed at, on a daily basis. Being part of a structure that deals with all these vibrant and driven entrepreneurs is, in itself, very rewarding.
Has Lisbon’s startup scene been modeled on any other European or US cities, or does it have a unique vision all of its own?
There’s a StartUp Portugal, the government agency for entrepreneurship, poster that reads “Berlin? Silicon Valley? No, #This is Portugal”, and we can see the rationale in that.
It’s normal for things to be branded the new this or that, but there is a feeling here that whatever is happening, we did it on our own. And the roots are in the economic crisis we went trough, in 2011, se we had to dig deep to find other resources, new ones.
Portugal is home to legions of talented developers, engineers and software product managers, you need only look at the amount of big tech that came here to stay.
We built on that, and we turned it into one of Europe’s most promising tech startup ecosystems, but but the truth is that it’s still early days over here, and we still have a lot of work to do.
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 first stages.
Do you think Europe’s major tech cities should take more advice from the US, or can Europe be just as successful by building with a tradition for risk-averseness and modesty?
I think we are talking about two different realities. For instance, we have 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. But other than that, it’s really hard to find capital or investors for more than seed rounds. So we have to come up with a tailored strategy, that has these aspects in consideration.
Also, sometimes access to talent is challenging because we’re a very small country. But this might change in the upcoming years, as we’re attracting more and more talent from more experienced startup hubs like London, Berlin and Silicon Valley.
Has Portugal’s government fully realized the potential of startups?
Yes, they are very aware, and they have been very supportive. João Vasconcelos, the previous and head of Startup Lisboa, was recently installed as secretary of industry within the Portuguese government. This was good, since he was able to move the needle for startups and early-stage investors even more, now that he’s in a position to do so from inside.
The Portuguese startup community also went live with a Startup Manifesto of our own, and the government launched Startup Portugal, a national public strategy to help entrepreneurship and promote local startups.
So, there’s a strong local support network, and the community is working very herd to help the local tech scene grow into a more mature hub.
What are your biggest goals for Beta-i, Lisbon and Portugal as tech hubs–and how best to achieve those goals?
Honestly, we want to keep the momentum, and grow also. For instance, we brought the Startup Guide, the handbook for startups and entrepreneurs, to Lisbon. Filled with inspiration, how-to’s, case studies and tips for starting up, the popular series will be highlighting the opportunities and stories from the leading European Entrepreneurship Region in 2015.
As the local project owner and facilitator, we see this opportunity as a proof that Lisbon is increasingly well positioned on an international level, and, in that sense, Beta-i is always available to help secure all the tools we can so that the local community can better develop, and take advantage of such a rich environment as the one we are currently in.