Startup Trends — A tour through Europe.
By: Pooja Thomas
Tags: Data Visualization, Europe, Ecosystem, Startup, Hotspots

Europe has some of the most diverse startup environments in the world, with the more mature and established startup hubs in places like Berlin and Finland, to the up and coming startup hubs in regions of Hungary and Poland. Let us take a tour through Europe, exploring the ecologies of these European startup hubs.

How can we define a startup?

According to The European Startup Monitor, a startup is any business or company that is less than 10 years old, who’s core tenet is innovation ( whether business, product or otherwise), and which aims towards growth.

Some overall trends in Europe.

Before diving into the individual countries and their startup environments, it is worth understanding what some of the trends are of the European startup environment.

We know, from the ESM, that these are some of the average features of a European startup.

They tend to be on average, 2.4 years old.

Most tend to be digitally focused.

77.7% are trying to internationalize their operation.

They have an average of 12 employees.

The most challenging aspects of the startup environment include product development, sales and growth.

Location and regional hubs:-

Germany — Ranking 5th in the world in terms of startup ecosystems, in 2020 Germany is said to have the highest ranking national startup ecosystem in the EU. With one of the most well established startup markets in Europe, the German capital of Berlin remains one of Europe’s leading startup hotspots, with over approximately 35 percent of all German financial and technological startups based there. With high quality corporations like SAP, Siemens and Bosch funding the German startup ecosystem, we see a diverse array of startups emerging within the markets. The image below has an overview of some statistics regarding German startups (Source-Startup ecosystem ranking report,2020;European Startup Monitor,2016. ).

Spain — While less mature than its European counterparts, Madrid and Barcelona remain some of Europe’s highest ranked startup hubs. The startup ecosystem is driven by the entrepreneurial spirit, which is maybe one silver lining to the somewhat high unemployment rates, especially in the times of crisis. This drives people into being entrepreneurs, and it is having a positive impact on the startup ecology, with Spain currently being ranked 5th in the startup ecology in Europe. With its shared language and connection with the Latin American startup ecosystem, also provides an advantage, since with the growth in Latin American markets, Spain has a high chance to be their gateway into the global market, which can in turn, positively impact Spain. An overview of the major trends in Spanish startups is given below (Source-Startup ecosystem ranking report,2020;European Startup Monitor,2016. ).

Switzerland — Currently ranked 8th globally in startup ecosystems for the third time in a row, Switzerland has emerged as one of the most stable countries in terms of high quality startup ecosystems. The openness of the regulators along with one of the worlds strongest blockchain economies has led to Switzerland being one of the key players in the startup markets, especially in the FinTech startup environment. The major startup hubs include Zurich, followed by Lausanne. An overview of some of the startup trends can be found below (Source-Startup ecosystem ranking report,2020).

Hungary — Ranked 37th worldwide, Hungary is emerging as a strong contender in the startup market. With a relatively low cost of living, dynamic and lively co-working spaces, as well as an increasing push from the government to foster entrepreneurial growth, Hungary is gaining momentum in becoming another one of Europe's most established startup hotspots. Currently, most startup activity occurs in the capital , Budapest. The main startup statistics in Hungary can be found below(Source-Startup ecosystem ranking report,2020).

Poland — Another emerging startup hotspot in Europe, Poland, especially Warsaw, houses some of eastern Europe's most thriving startup sectors. With one of Europe's youngest startup environments, Poland has the advantage of having talented entrepreneurs, a booming economy as well as well thought out, new entrepreneurial legislature. As mentioned above, Warsaw is currently Poland's startup hub. Referenced below are some startup statistics from Poland (Source-Startup ecosystem ranking report,2020).

Finland — Ranking 13th globally, Finland has established it’s spot as one of the topmost startup destinations. Local talent, as well as a supportive public sector is working towards creating and establishing innovative startups, from space industries to gaming verticals. Helsinki is Finland's main startup hotspot. An overview of the startup statistics in Finland can be found below (Source-Startup ecosystem ranking report,2020).

Portugal — The 2008 financial crisis in Portugal pushed many people into entrepreneurship, and, although not as established as Berlin and Finland, Portugal is increasing its reach in the startup market. Supportive public sector incentives and legislation also fosters the growth of Portuguese startups, through some of the highest rates of resource allocation to the startup ecosystem. The nations strongest startup hub is currently Lisbon. An overview of the main trends in the startup environment in Portugal can be found below (Source-Startup ecosystem ranking report,2020).

Austria — With an established history of strong businesses, Austria now ranks 28th globally in the startup market. The capital, and its strongest startup hub, Vienna, pulls young talent due to its quality of life and culture. Its central location in Europe is also advantageous, as it can act as a pathway from wester to eastern Europe. Most of Austria’s startups are focused on deep technology, and with a stable economy, Austria continues to be one of Europe's most stable startup environments. Vienna remains the startup hub. An overview of the Austrian startup statistics can be found below (Source-Startup ecosystem ranking report,2020).

To conclude, we see that the startup scene in Europe is bustling with potential within, and a close examination of the data can reveal interesting tendencies within Europe's startup ecology. It should be noted that this is only a snapshot of the current European startup environment, there are quite a few more interesting trends and cities that I look forward to exploring on another occasion.

-Pooja Thomas.

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