I believe it is useful at every year-end to do a retrospection on what has happened and take a view of what is coming ahead. On that note, looking back at 2017 we can attest it has been a great year for the Greek tech ecosystem and I can’t help but be very optimistic about what is coming in 2018. Even though a strong and self-reinforcing ecosystem takes years to build, some serious underpinnings have been put in place in the previous years and in 2017 we saw clear evidence of that positive evolution.
As a first positive note, we had a few more notable exits in 2017 and we can also name a few tech companies that left the “startup” phase and became scaled tech companies. The 2017 exits of Taxibeat, Innoetics, and Quizdom provided further confidence in the potential of Greek founded companies and the same applies for companies like Workable or Marinetraffic that entered a growth phase scaling up their operations and know how. Both the startups that have exited and became part of larger international tech companies, as well as the startups that have scaled up, provide the backbone of a tech ecosystem. They provide employees with much-needed work experience in larger scale tech, marketing or operations problems.
Apart from helping their employees gain skills and grow, mature tech companies also prepare their more risk taking employees to eventually create or join and support new startups.
We already have examples of great people who having done their cycle at strong companies like e-food.gr or Workable or Upstream are now supporting new promising initiatives.
As a second positive point, in 2017 we saw an increasing number of startups reaching the Series A level which we define by their exceeding the 1mil euro annual revenues run rate. This is very important for an ecosystem because it is great to see many new startups receive seed funding but what mainly matters is how many startups grow and move closer to becoming sustainable. The failure rate of companies that have reached the Series A level is quite low with typically more than 70% of them making it to sustainability. That survival metric for Seed investments is typically 10%-15%.
Blueground, Welcomepickups, Douleutaras, Instashop, Weengs, Pollfish, doctoranytime and Projectagora are some of the startups that have crossed the 1mil euros annual revenue rate in 2017 and we expect that many more will join then in reaching that milestone in 2018.
This is also important because the next best thing to founding a startup is joining a promising one early on. Young driven people now have many options to get involved in their function or industry of choice be it in promising Saas, e-commerce, marketplace or deep tech startups.
Finally and quite importantly, 2017 was a year that funding options for Greek founders expanded or to be more accurate exploded. Even though no one could argue that strong founders with clear business models had an issue to get funding especially after the launch of VentureFriends in 2016, Equifund will be a game changer. At the end of 2017, there were at least 6 new venture capital funds approved for co-investment by EIF (including a new larger fund from VentureFriends). The new available capital for startups, in total around 200mil euros, will create many options for aspiring founders.
As a summary, in the Greek ecosystem during 2017 we were happy to witness a few tech companies reach a more mature stage, many new promising startups scale up and the creation of many new VC funds. All developments attest to a great 2017 that will give its way to a fantastic 2018.
We are very excited to be part and support this vibrant Greek tech ecosystem.