An endeavor report
Greek Tech
Report 23
2023
01
Endeavor's report on the Greek Tech Ecosystem provides a detailed view, uniquely driven by entrepreneurs and key players of the market We gather insights and data straight from our network of founders, investors, and mentors This entrepreneur-first approach captures the true essence and potential of Greece's tech scene. Our report aims to enlighten stakeholders, both in Greece and globally, about the opportunities and challenges in this market. We hope you enjoy reading it and are looking forward to receiving any feedback you may have for further enhancement and potential collaborations.
Despite global economic uncertainties, Greece demonstrates remarkable growth and resilience. The country's economic performance is not just promising but is also surpassing many European nations. In 2022, Greece's GDP growth outstripped the EU average, recording a robust 5.9% compared to the EU's 3.5%. This trend is expected to continue into 2023, with Greece projected to grow at 2.4%, over twice the anticipated EU average of 1.1%.
A testament to this upward trajectory is Greece's recent elevation to investment grade status for the first time since the 2010 crisis. This significant milestone, achieved in October 2023, reflects international confidence in the Greek economy's stability and growth potential. Additionally, Greece was acknowledged as the most successful economy in 2023 among 35 selected countries in the OECD by the Economist. This underscores Greece’s remarkable economic recovery and robust performance.
The nation's economic confidence is further demonstrated by the Business and Consumer Confidence Indices, both exceeding the OECD average by 3 points and surpassing the 100 mark. This indicates a positive business outlook in the near future. Moreover, the job market is experiencing a significant positive shift, with unemployment rates falling to their lowest since 2009, currently at 9.4% as of November 2023.
What is great is that after spending ten years worrying about macro, we're just talking micro. We're talking projects, we're talking investments, we're talking M&A, we're talking new acquisitions, we're talking foreign direct investment. There's such a palpable excitement.
Dimitris Papelexopoulos
Chairman of TITAN Cement Group | Chairman at Hellenic Federation of Enterprises
Greece must address crucial issues to maintain its economic progress. A primary concern is the high ratio of non-performing loans (NPLs), which, despite reductions, still exceeds the Eurozone average. This level of bad debt limits new investment and borrowing opportunities, hindering economic growth. Moreover, Greece needs to tackle structural labor market issues, like high natural unemployment rates and job mismatches in sectors such as tourism and construction, indicative of underlying economic distortions.
Additionally, the Greek startup ecosystem faced a significant downturn in 2023, with investments plunging from €1.4 billion in 2022 to just €400 million. This decline was largely due to high interest rates and the withdrawal of American investors from Europe, a region on which Greece, as an emerging ecosystem, heavily relies. This situation calls for a more robust, internally-focused investment approach, reducing reliance on external influences and fostering a more resilient economic environment.
For years, Greeks have held the mentality that a major foreign investor or company will come and establish their business here, with Greece acting as a host country. However, this is certainly not a solution. I believe we are coming to the realization that we need to take action ourselves. We need to establish strong venture capital firms, develop robust growth equity funds, and build our own successful companies. We should be should be less obsessed with being a host country, and more focused on being builders.
Marco Veremis
Partner at BigPi VC | ExCo and Chair of Innovation at Hellenic Federation of Enterprises
Despite the challenges outlined in the Greek economy, there are substantial reasons to remain optimistic about the country's entrepreneurial future.
First, the trail blazed by the first generation of founders has significantly influenced societal perceptions of entrepreneurship in Greece, as reported by the Global Entrepreneurship Monitor. The esteem for successful entrepreneurs and the view of entrepreneurship as a viable career choice both saw an 8 point increase from 2021 to 2022, reaching 72%. Concurrently, the fear of failure has notably decreased from 70% in 2011 to under 50% in 2022. This evolving mindset, moving away from traditional public sector and medical professions, is fueling a renewed interest in entrepreneurial ventures, showcasing a transformative change in the country's business culture.
Second, the resilience and tenacity demonstrated by Greek entrepreneurs are invaluable assets, especially in the current challenging economic climate. Their experiences navigating through tough times arguably make them more robust and adaptable compared to their peers in more established markets like Silicon Valley. This resilience is a critical advantage, especially during challenging economic periods, as it fosters a mindset of perseverance and innovation in the face of adversity.
I would put any Greek entrepreneur in front of a Silicon Valley entrepreneur right now, and I would say probably this person is stronger because they've been through a lot more stuff.
Alexis Pantazis
Co-Founder & Executive Director at Hellas Direct
Third, complementing this resilience is Greece's strategic geographic positioning. The country offers unique opportunities for regional disruption, especially in major industries like financial services, banking, and insurance. Its market size and location, often overlooked by larger players, provide an ideal testing ground for new ideas and scaling up. This ability to pilot and scale innovations in Greece and then expand into neighboring regions like the Balkans and the Middle East positions the country as a potential leader in regional entrepreneurship and innovation. Moreover, Greece's complex challenges, including border security and climate risks, encourage entrepreneurs to develop novel solutions, often leapfrogging traditional approaches in favor of more transformative changes.
Finally, the Greek startup ecosystem is increasingly focusing on complex, 'hard' problems, moving beyond basic consumer software. With its highly educated workforce, especially in STEM disciplines, Greece is well-positioned to tackle these challenging issues. This trend is evident in areas like life sciences, where Greek startups are already making significant advances. The emphasis on tackling more substantial and technically demanding problems capitalizes on Greece's strengths in education and innovation, setting the stage for the country to emerge as a leader in addressing global challenges through entrepreneurship.
02
In 2023, the European tech ecosystem is projected to attract around $45B in investments, a significant reduction of 55% from the record-breaking $100B in 2021. This downturn also marks a 45% decrease compared to the $82B invested in 2022. The current investment climate reflects a broader macroeconomic shift, influenced by late-stage companies postponing funding rounds and a more cautious approach from investors. This has led to fewer large-scale, growth-stage investments, a key factor behind the reduced capital influx.
Despite this downturn, 2023 is poised to be the third-largest year in terms of total capital invested in European tech, quadrupling the investment volume of 2014. The current decrease in investment levels seems to be a recalibration following two years of exceptionally high activity, suggesting a return to a more sustainable growth trajectory in the long term.
In 2023, the broader challenging macroeconomic environment has begun to impact Greece's tech investment landscape significantly. The year is anticipated to see a sharp 70% decline in funding compared to the high of 2022. This downturn mirrors global economic challenges and marks a pivotal moment in the Greek tech sector, indicating a shift from the previous years' exceptional growth to a more cautious investment climate.
The sharp decline in Greece's tech investments in 2023 is influenced by a few key factors. High-interest rates have led to fewer large-scale funding rounds, while the market is correcting itself after years of unusually high investment activities. Additionally, the reduced American investment in Europe, notably impacting maturing markets like Greece, is a significant factor.
The substantial increase in interest rates globally, with the ECB's deposit rate reaching an all-time high of 4% from 0% in early 2022, and the US Federal Reserve's effective rate soaring to 5.3% from a mere 0.1%, has had a profound impact on innovation ecosystems. These rate hikes have ushered in a new era of financial conservatism, particularly affecting the startup sector. Higher interest rates typically lead to higher yields on safer investments, making them more attractive to investors. As a result, there's a marked shift in investor preferences away from riskier assets, such as startup equity. This trend towards risk aversion significantly diminishes the flow of venture capital and angel investments into the startup ecosystem, hindering the growth of new and innovative ventures.
For potential founders, the changed economic landscape has introduced a new set of challenges. The higher interest rates not only make obtaining capital more difficult but also increase the opportunity cost of forgoing safe, interest-bearing savings to pursue entrepreneurial endeavors. This double-edged sword — tougher capital acquisition and the increased attractiveness of savings — creates a more daunting environment for aspiring entrepreneurs. Consequently, there's a noticeable cooling effect on the startup ecosystem worldwide, including in Greece, where the tech sector is particularly vulnerable to these shifts in investment patterns and founder decisions.
Everybody's risk averse right now. Investors can get good returns from just investing in bonds or keeping money in the bank. So they're not willing to take a lot of risk. […] This environment of risk adversity is also reflected on founders’ expectations. Many people who were contemplating leaving their companies to start a company now think twice because they have the luxury of a good salary. The opportunity cost of them leaving seems higher because their chances of raising a good round are lower.
Apostolos Apostolakis
Managing Partner at VentureFriends
Examining the breakdown of funding by stages in Greece's tech sector reveals a nuanced picture for 2023. While overall funding has declined, early-stage funding has shown relative resilience, decreasing only by 25% year-over-year. This contrasts starkly with the growth-stage funding, which experienced a more significant drop, plunging by over 75%.
This trend in early-stage funding is a positive sign for the health and vibrancy of the Greek tech ecosystem. The sustained support for early-stage ventures is crucial, as it fosters the emergence of new projects and ideas, which are the lifeblood of a dynamic tech landscape. The relative stability in this segment suggests that the next generation of Greek founders remains active and promising. This is an encouraging sign for the future, indicating the potential for a rejuvenation of the tech sector as macroeconomic conditions improve. The resilience of early-stage funding thus points towards the start of a new cycle of innovation and growth in the Greek tech industry.
The Greek startup ecosystem witnessed a significant upswing post-2016, largely fueled by the inception of the country's first venture capital funds. This crucial development was underpinned by European support, notably the European Investment Fund. These initial funding injections catalyzed a notable boom from 2018 onwards. However, the lack of substantial exits in the sector raised concerns. The absence of high-value liquidity events meant that reinvesting capital into new Greek ventures was challenging, posing a potential obstacle for VC managers in securing follow-on funds.
In a fortunate turn of events, the Hellenic Development Bank of Investments (the Sovereign Fund-of-Funds of Greece) stepped in, alongside family offices, angel investors, and other private capital sources, to bolster the Greek VC landscape. They are the means for reshaping the economy and for building solid and sustainable businesses. This collective support enabled fund managers to successfully raise second-round funds, which were considerably larger – ranging from 20% more to double the size of their initial funds. This influx of capital is a significant boon for the Greek startup scene, ensuring the continued availability of early-stage funding despite the broader economic context of costly capital.
One of the big dangers was that we had the first round of funds under EIF (European Investment Fund) and there was a great danger that given most funds do not yet have a clear track record with a few exceptions, that they would struggle to raise a second fund or a third fund. This has not been the case.
Marco Veremis
Partner at BigPi VC & Co-founder and Executive Chairman of Upstream
Emerging tech ecosystems like Greece are particularly impacted by the withdrawal of US investors, largely due to their underdeveloped local financing structures. In such markets, the absence of robust, homegrown investment sources makes them heavily reliant on foreign capital, especially from American investors known for funding substantial growth-stage rounds. The retreat of US investors leaves a significant funding gap, hindering the scaling up of startups and stifling overall innovation and growth in the ecosystem.
This trend underscores the necessity for countries like Greece to fortify their domestic investment capabilities and broaden their investor base, including larger European investors. The fluctuating participation of US investors in Greece's top funding rounds illustrates the high dependency and the resulting vulnerability. Building a more diverse and resilient funding environment is essential for the sustainable growth of these emerging tech markets.
The absence of local growth capital is a problem. […]
When money was cheap, foreign players were extroverted. […] Now, the cost of money is much higher and the alternatives, like buying a US Treasury bond for 5%, make growth equity becomes less attractive. So the big players are preferring to do deals that are closer to home.
When they do deals further away, they prefer to have a majority, so at least they can control things. So I am a bit concerned; companies that are doing pretty well are having more difficulty to either IPO or get growth equity.
Marco Veremis
Partner at BigPi VC | ExCo and Chair of Innovation at Hellenic Federation of Enterprises
03
The Greek tech sector is currently characterized by three notable dynamics: Retail and consumertech, though leading in market share, are on a declining trajectory, a natural progression in a maturing ecosystem where early entrants have solidified their positions. In contrast, healthtech is experiencing unprecedented success, driven by a few standout companies. Meanwhile, fintech, previously thriving in 2020 and 2021, has seen a huge dip in performance, aligning with a broader global trend. Next, we explore these key verticals in more detail, uncovering the unique trends and dynamics within each.
Includes startups that leverage technology to serve the agricultural industry.
Includes Software and/or technology startups that serve consumers or retailers.
Includes eLearning platforms and marketplaces, as well as HR software and technology.
Includes B2B SaaS startups that solve business problems that are not specific to one industry.
Includes startups that leverage technology for healthcare and life sciences.
Includes companies in deeptech, energy, climatetech, which aim to make our cities smarter and greener.
Technology and Software for the finance industry
Greek HealthTech has concluded a stellar year with total funding surpassing $100M, an all-time high. This success is multifaceted: Greece's historical excellence in healthcare and the deep-rooted medical culture set a strong foundation. Additionally, the 2021 inauguration of Pfizer's Digital Innovation Center in Thessaloniki catalyzed this growth. Most crucially, Greek healthtech startups have adeptly capitalized on the AI boom, positioning themselves at the forefront of innovation in this sector.
Innovating in healthtech, particularly at scale, presents unique challenges. In our current digital age, data stands as a treasured asset, pivotal for advancements in automation and AI. However, within the healthcare realm, outdated technological infrastructures coupled with stringent privacy stipulations often result in data that's fragmented, unstructured, and elusive. Therefore, healthtech’s face hefty expenses when attempting to ascertain their product's market alignment.
Navigating healthcare's data landscape is tough. We face data silos,
legislative challenges like HIPAA, and the daunting task of digitalization without monopolization.
Panagiotis Papageorgiou
Founder at Keragon & Serial Entrepreneur
Greek healthtech founders are diligently addressing these challenges, focusing on data federation to enhance accessibility.
The introduction of federated technologies in the pharmaceutical industry can transform data challenges by enabling collaborative insights without centralizing data, thus ensuring privacy and security. Coupled with AI, these technologies allow for the rapid and accurate analysis of distributed health data, dramatically shortening the time for accessing and generating vital health data.
Dr. Maria C. Dunford
CEO & Founder at Lifebit
TileDB and Causaly are also at the forefront of these efforts. TileDB, emerging from MIT and Intel Labs, excels in unifying diverse data types into a cohesive management system, a vital tool for entities grappling with data consolidation. Causaly, meanwhile, is transforming biomedical research by offering a platform that bypasses traditional keyword searches, enabling rapid discovery in vast biomedical datasets.
Europe, including Greece, is at a pivotal juncture to redefine the utilization of healthtech data. Diverging from the U.S. model where private entities predominantly control health data, Europe's commitment to universal healthcare presents an opportunity to bypass traditional data silos. This is particularly evident in the proposed European Health Data Space initiative, designed to unify and manage medical data across member states. This strategy mirrors the impact of Open Banking in the finance sector, suggesting a similar potential for transformative change in healthtech.
In this evolving landscape, Greece has the potential to emerge as a key player, especially in the realm of generative AI (genAI) in healthcare. With its innovative healthtech sector and leading companies, Greece can leverage these developments to drive significant advancements. Emulating Singapore's CHISEL program, Greece could establish healthtech sandboxes to expedite the testing and development of genAI solutions. Such initiatives could position the country not just as a participant but as a frontrunner in the global healthtech revolution, harnessing open data and cutting-edge AI to redefine healthcare.
The shipping industry is a cornerstone of the Greek economy, with Greek shipowners commanding the largest fleet worldwide, representing about 20% of the global fleet. This prominence is not just a matter of size but also of deep-rooted expertise and market concentration. Greece's longstanding history in shipping has cultivated immense sector-specific know-how. This extensive experience, combined with the concentrated market, positions Greece uniquely for rapid adoption of technological solutions in maritime ventures. The potential for tech innovation in this domain is vast, given the industry's significance and readiness for digital transformation.
Despite Athens ranking as the 15th city globally in maritime technology according to a 2022 report by DNV and Menon Economics, the maritime tech landscape in Greece still faces challenges. Renowned companies like Marinetraffic and Deepsea, both acquired in 2023, along with Harbor Lab, highlight the country's capabilities. Yet, the overall digital penetration in the maritime sector lags, hindered by longstanding traditions and prolonged sales cycles. Innovations, particularly those with high costs and unclear immediate ROI, face an uphill battle for adoption. This slow pace of change reflects the industry's inherent caution and the need for convincing, cost-effective solutions.
Our biggest challenge, being in a very traditional industry, is that it moves much slower in decision-making than other industries.
Antonis Malaxianakis
Founder at Harbor Lab
However, a paradigm shift is occurring within the maritime sector, with incumbents increasingly recognizing the need to integrate technology to stay competitive on a global scale. This shift is a positive sign for the future. Looking ahead, there's a strong hope for a surge in Greek-founded startups driving innovation in maritime technology. The goal is for established companies and emerging players to collaborate effectively, leveraging Greece's significant influence in global shipping. By doing so, Greece can aspire to not only maintain its dominant position in shipping but also emerge as a leading hub for maritime technology.
The paradigm shift in the shipping industry is happening now. It's a tremendous change from manual, paper-driven processes to a tech-driven approach, and the ship owners are asking for this change.
Antonis Malaxianakis
Founder at Harbor Lab
The Greek energy sector, strategically located at the crossroads of East and West, is ripe for innovation. Rich in renewable resources and involved in key infrastructure projects, Greece is well-positioned to lead in energy innovation. However, a gap is evident in the startup landscape within this sector. This is largely due to the long time-to-market for energy startups, which tends to deter venture capital investment. Additionally, the high capital requirements of these startups add to their risk profile.
The recent energy crisis, exacerbated by global events such as the Russia-Ukraine conflict, has underscored the importance of developing alternative, sustainable energy sources. To catalyze innovation, there's a pressing need for established energy conglomerates to enhance their R&D efforts and establish collaborations with visionary entrepreneurs. Government support is also crucial, with strategic funding necessary to nurture and support these innovative endeavors. Notably, early-stage companies like Avokado, Ensight, and Fuelics are showing potential, paving the way for the future of Greece's energy sector.
Greece's advantageous geographical position and its stability in a volatile region present a unique opportunity for investments and innovations in the energy sector. Recognized by the current administration as a strategic priority, this focus on energy innovation aligns with global trends towards sustainable energy solutions. With the right support and conducive environment, Greece has the potential to become a significant player in the global energy landscape, leveraging its strategic advantages to drive transformative change and sustainable growth in the sector.
2023 proved to be a challenging year for the Fintech sector for several reasons. The realm of web3 and crypto experienced significant upheaval, marked by high-profile scandals such as the FTX debacle and issues surrounding Binance. These incidents cast a shadow over the broader Fintech landscape. Moreover, the sector, inherently sensitive to interest rate fluctuations, was adversely affected by rising rates. This led to difficulties for many established players, with companies like Klarna facing down rounds. Additionally, early-stage funding in Fintech saw a decline, as investor interest shifted towards areas like AI, leading to a noticeable cooling in the once fervent investment landscape.
In Greece, the Fintech sector mirrored this global trend, experiencing limited activity in 2023, with notable exceptions being funding rounds for companies like Plum and Natech. This slowdown, while challenging, could be seen as a necessary correction following a period of heightened hype and inflated valuations in the sector. Analysts are now anticipating a phase of consolidation within European Fintech, a development that will be particularly interesting to observe in the Greek context.
Despite these challenges, the Fintech sector remains a fertile ground for innovation. While access to capital has become more stringent, there is still ample opportunity for solid, sustainable businesses in this space. Greece, with its relatively low competition and conducive environment for testing and scaling innovative solutions, presents an ideal market for Fintech ventures. The country's strategic position allows for regional disruption, especially in significant sectors like financial services, banking, and insurance. Greece's market size and location in a less crowded competitive landscape make it an excellent base for testing and achieving scale, before expanding into neighboring regions like the Balkans and the Middle East.
If you want to disrupt regionally, especially in big industries like financial services, banking, insurance, then this is a fantastic starting point because it's a big enough market. It's in the blind spot of the big guys, but you can test things, you can even reach scale. And then from then on whether you go towards the Balkans, you go towards the Middle East. You’re very well positioned to test other markets.
Alexis Pantazis
CEO at Hellas Direct
Greece's agri-tech sector is making progress in updating the country's traditional agricultural practices. Contributing about 4% to the GDP, or $8.6 billion annually, agriculture is a vital part of the Greek economy. Agri-tech innovations are gradually introducing improved production methods, better logistics, and smarter sales strategies, fostering incremental progress in the industry for the benefit of farmers, consumers, and the economy.
A significant portion of Greek agriculture still lags in modernization, hampered by a modest market size, fragmented markets, and aging infrastructure. These challenges are compounded by the prohibitive costs of advanced agricultural technology, posing barriers for many farmers.
Many Greek farmers have yet to adopt modern technologies, primarily because Greek agriculture is characterized by small farms and low Capital Expenditure.
Ilias Sousis
Founder at Wikifarmer
While the challenges are notable, there are realistic opportunities for growth in Greek agri-tech. Targeted subsidies could help overcome financial barriers to adopting new technologies. Greece's established reputation as a producer of quality food positions it well in a market increasingly focused on health and quality. Innovations from companies like Augmenta, which specializes in precision agriculture, Centaur's smart sensor and AI solutions for crop management, and Wikifarmer's global marketplace, can play a role in enhancing the sector's efficiency and reach, albeit at a measured pace.
While Greece lacks the infrastructure and economies of scale to become a global mass producer, it is very well positioned as a quality food producer. As world demand shifts to healthier, less processed foods, Greece has an opportunity to position itself and grow its exports.
Ilias Sousis
Founder at Wikifarmer
The recent acquisition of Augmenta by CNH Industrial, creating a $110 million boost, is a positive sign for Greek agri-tech, signaling potential for increased innovation. However, realizing this potential requires improved collaboration between tech innovators and traditional farmers, particularly in a market as fragmented as Greece's. By fostering effective communication and partnership, the Greek agricultural sector can expect a gradual, yet impactful transformation, leveraging modern technologies to enhance its agricultural practices.
04
The Greek labor market has shown remarkable resilience and improvement in recent years, particularly after enduring a period of intense economic crisis. Notably, unemployment rates have significantly dropped from their peak of over 25% in 2014 to around 10% in the present day, signaling a robust recovery. This positive trend underscores Greece's ability to bounce back from severe economic downturns. However, current challenges have shifted from general employment to more nuanced issues of skills mismatch, particularly evident in the tech sector. This highlights a critical need for alignment between the skills of the workforce and the requirements of the evolving job market, especially in technology-driven fields.
One of the traditional issues with Greece was that great quality of life, but the professional opportunities were kind of limited. Now that's changing.
Dimitri Papelexopoulos
Chairman of the Board at Titan Cement
In 2023, Greece mirrors the global trend in facing significant challenges in recruiting skilled talent, with 77% of companies expressing difficulties, aligning with the global average. This predicament isn't new to Greece; since 2015, over half of its companies have consistently struggled with talent acquisition, peaking in 2021 when 80% reported issues, highlighting a deep-rooted challenge in the Greek labor market. Comparatively, the global situation appeared less severe in 2015, with only 38% of companies worldwide facing similar issues. This steady rise to the current 77% global rate suggests a broadening gap between available skills and market needs. Greece's persistent struggle, notably higher than the initial global average, underlines a unique, systemic issue in its workforce development and retention strategies.
The Greek talent shortage is largely attributed to the brain drain following the financial crisis, which saw a significant exodus of highly educated professionals seeking opportunities abroad. This migration left a gaping void in the local talent pool. Recent developments, however, offer a glimmer of hope. Initiatives like tax incentives aim to lure back the Greek diaspora, while the expanding job market and the effects of the COVID-19 pandemic have created new dynamics. These factors, coupled with a slight decrease in recruitment difficulties since 2021, suggest a positive shift. Nonetheless, this optimistic trend is in its nascent stage, and Greece must continue to address the underlying systemic issues to sustain and amplify this improvement.
People with very good backgrounds from the US, from the UK, they're coming here as digital nomads, but I think most of them are coming back to join companies like ourselves. So there is a little bit of a brain gain rather than drain happening
Alexis Pantazis
CEO at Hellas Direct
Over the last decade, the proportion of Greeks working in technical jobs has seen a gradual but notable increase. Starting from 2.53% of the total workforce in 2011, the sector experienced its most significant growth between 2016 and 2018, reaching a peak of 3.26%. Although there was a slight decline post-2018, the percentage stabilized to 3.24% by 2022. This steady growth in tech employment reflects the expanding influence and importance of the technology sector within the Greek economy.
However, when compared to the European average of 4.6%, Greece still has a considerable gap to bridge, being 1.36 percentage points behind. This disparity underscores a pressing need for Greece to enhance its focus on developing tech skills and attracting talent. The burgeoning presence of multinational tech companies and the rise of Greek startups are promising signs of a dynamic tech ecosystem. Yet, the challenge remains to adequately equip the workforce to meet the increasing demands of this growing sector, ensuring Greece not only catches up but becomes a competitive player in the European tech landscape.
The age distribution within the Greek tech sector presents a notable contrast to the general workforce. While only 23% of the overall workforce in Greece is under 35, this age group constitutes 34% of those employed in technology. This suggests a younger demographic is more prevalent in the tech industry. On the other end, older workers (over 55) make up a smaller proportion in tech, representing just 11%, compared to 20% in the broader workforce. This disparity suggests that the tech industry in Greece is not only growing but also evolving with a distinctly youthful demographic, potentially shaping the sector's culture, innovation, and future direction.
As of 2022, a significant 84% of the tech workforce in Greece held a Bachelor's degree or higher, underscoring the high value placed on formal education by recruiters in the sector. Higher education plays a crucial role in equipping young adults with not only technical skills but also vital interpersonal capabilities. However, despite this educational attainment, many entrepreneurs and recruiters have observed a gap in job-readiness among junior talents. This lack of practical skills impacts their productivity, leading companies to invest heavily in training programs. This situation highlights the need for enhanced collaboration between academic institutions and corporations to better prepare graduates for the demands of the workplace.
Establishing enduring collaborations between universities and companies offers mutual advantages. Universities gain enhanced brand visibility and funding, students acquire valuable work experience leading to improved job readiness (beneficial for firms too), and companies can conduct preliminary research at significantly reduced costs, as highlighted by Kenneth Lutchen in the Harvard Business Review.
In a society that values having multiple academic degrees, it's important to combine formal education with practical experience to fully prepare for a career.
Sanne Gosling
Founder at HR Greece
The Greek tech sector exhibits a significant gender gap, with women holding only 18% of tech positions, notably below the global average of 27%. This considerable underrepresentation of women underscores a critical gender imbalance in the industry. It brings to light the urgent necessity for targeted efforts and initiatives to foster a more diverse and inclusive tech workforce in Greece, aligning with international norms and standards.
As highlighted by McKinsey’s 2023 report, in the context of a talent shortage, addressing this issue is an economic necessity to meet the ever-growing demand for tech talent. The report identifies two major points at which the percentage of women in STEM drops significantly; during the transition from secondary education to university, and during the transition to the workforce. Programs and policies targeting University enrollment and hiring could be major opportunity to tap into this talent pool.
We have to expand our labor supply,” Patelis says. “When you look at the areas of the population that are underrepresented in the labor force today compared to other countries, the one that sticks out is women.
Alex Patelis
Chief economic adviser to the Prime Minister of Greece
Greece's tech industry has experienced a significant surge post-pandemic, marking an era of job creation and opportunity. However, this upward trajectory comes with its own set of challenges. A notable 81% of IT companies report difficulties in finding the right talent. This situation is compounded by the trend of junior employees seeking opportunities abroad, indicating a "brain drain" issue.
Following the pandemic, Greek Tech has emerged as a beacon of resilience and promise. Data from 2021 and 2022 underscores this optimism, revealing that the tech sector alone contributed to the creation of 15,000 jobs across these two years. Such substantial job growth not only demonstrates the sector's buoyant recovery post-pandemic but also stands as a testament to the maturing and evolving landscape of Greek tech.
However, as companies attempt to recruit to continue fueling the growth of their businesses, many companies report having difficulty finding the right talent.
The tech sector's growth is hampered by a lack of job-readiness among junior talent, particularly in soft skills like collaboration and time management. This gap necessitates extensive training programs, highlighting a need for better academia-corporate collaboration.
Greece shines in tech proficiency and entrepreneurial spirit but needs to refine collaboration, time management, and prioritization skills.
Ioanna Christodoulopoulou
Talent Director at Olympia Group
This issue of junior talent lacking job-readiness, particularly in soft skills, is not an isolated case but a recurrent problem observed across our network. The most sought-after skills among new recruits are reliability and self-discipline, which are critical for the smooth functioning and growth of any tech enterprise. This persistent gap in essential soft skills underscores the pressing need for more targeted and effective collaboration between academic institutions and the corporate sector, aiming to bridge this divide.
Another apparent issue faced by Greek tech startups is the challenge of efficiently transitioning entry-level employees to associate roles. This difficulty is reflected in the increasing demand for associate-level professionals, which escalated from 20% in 2019 to 30% by 2023. Such a trend indicates disruptions in the internal progression pipeline of these startups. Stakeholders express frustration over investing in the development of junior talent, only to see them leave for higher-paying opportunities abroad. This pattern not only leads to a talent drain but also undermines the long-term growth and stability of these firms. As skilled employees depart after gaining sufficient experience, startups are forced to repeatedly hire externally, further exacerbating the issue.
While tech workers in Greece enjoy a notable advantage in earnings compared to their non-tech counterparts, the disparity in wages underscores the value of technical skills in the job market. In 2020, the median monthly salary for tech workers was €1193.05, significantly surpassing the €833.35 earned by non-tech workers, illustrating a clear premium of €359.70 for technical expertise. By 2022, although the gap narrowed to €269.45, with tech workers earning €1237.82 against €968.37 for non-tech employees, the consistent wage advantage for tech professionals reflects the high demand and esteem for technical qualifications and skills in Greece.
However, when viewed from a global perspective, the situation for Greek tech workers appears less rosy. Despite their relative financial advantage in the local market, Greek tech salaries rank low internationally. They stand at a concerning 29th out of 33 in a global comparison of software engineering salaries adjusted for the cost of living, and among the lowest in Europe. This wage disparity is a major driver of the brain drain phenomenon. The flexibility of remote work in tech, coupled with the prospect of earning higher salaries in line with international standards, tempts many Greek tech professionals to seek employment with foreign companies.
Navigating the financial dynamics in the tech industry is challenging. Companies strive to balance maintaining low operational costs with the need to attract and retain top talent. Underpaying employees risks a talent exodus, as professionals seek more lucrative opportunities elsewhere.
The emotional and cultural ties Greeks have with their homeland are profound. Greece's rich history and culture, coupled with its natural beauty, create a strong bond with its citizens. Ioanna Christodoulopoulou, Talent Director at Olympia Group, points out that while it's challenging to compete on salaries with foreign entities, leveraging family ties and Greece's global cultural relevance can be significant attractors.
This situation highlights the need for incentive programs to entice the diaspora to return and contribute to the Greek tech industry. Implementing policies that reduce employment costs while boosting wages could be pivotal in revitalizing the sector, creating a more competitive and sustainable environment for tech professionals in Greece.
05
The Greek diaspora, a global community of over 5 million people, has a significant impact on the global tech sector. Not only do they contribute to the startup ecosystem, but they also hold key positions in leading tech multinationals. Startups founded by members of the Greek diaspora are valued at over $100 billion, a figure ten times greater than the combined value of startups based in Greece, highlighting their substantial influence in the tech world.
The concentration of Diaspora-founded companies predominantly aligns with the most established tech hubs globally. The United States leads with nearly 250 such firms, underscoring its status as a major epicenter for technology and innovation. Following closely is the United Kingdom, hosting 102 companies, reflecting its own robust tech ecosystem. Canada, Germany, and Australia, each home to approximately 20 of these businesses, also play significant roles but on a smaller scale.
Moving onto investments, the collective input in Diaspora startups is estimated to be approximately $5.7bn, marking a 6% year-on-year decline relative to 2021. Impressively, this reduction is modest in contrast to the staggering 35% decrease in global funding, underscoring the determination and resilience inherent to Greek founders.
In 2023, diaspora founders experienced a notable decrease in funding, raising $2 billion, a significant drop from the $4.8 billion secured in 2022. This trend aligns with global market dynamics, where 2021 marked a peak with $5.8 billion in funding, followed by consecutive declines in the subsequent years. This pattern primarily reflects shifting market conditions rather than isolated challenges within the diaspora entrepreneurial community. The trend mirrors the broader venture capital landscape, where a combination of economic uncertainties and market corrections have led to more cautious investment behaviors globally.
The Greek diaspora, characterized by a strong "pay it forward" ethos, is increasingly contributing to Greece's local ecosystem. As noted by Alexis Latsis in the Sifted report “Greeking Out”, this involvement is deeply rooted in a sense of national identity and heritage. Endeavor Greece exemplifies this synergy, fostering connections between diaspora members and local entities through mentorship and dialogue. This model, currently thriving in entrepreneurship, holds potential for broader application across various sectors, enhancing cooperation and mutual growth between the diaspora and Greece.
Efforts to maximize diaspora engagement include mapping talents and establishing facilitators. Mapping involves redefining diaspora members as valuable assets and creating a comprehensive database, akin to Taiwan's approach highlighted in the Harvard Business Review. Facilitators play a crucial role in maintaining this database and facilitating effective matchmaking within industries. Endeavor Greece has been pivotal in this area, bridging gaps and guiding fruitful collaborations. Additionally, establishing clear intentions and objectives in these relationships is vital for ensuring mutual benefit and avoiding any perception of exploitation.
Tapping into the diaspora has huge potential and lots of benefits. But to really make it work, we need a well-organized and systematic plan.
Sanne Goslinga
Founder of HR Greece & Principal at Reborrn
Greece is actively drawing its diaspora closer through tax incentives and campaigns showcasing the country's post-crisis progress, aiming to attract those interested in relocating. For diaspora members firmly settled abroad, maintaining their cultural and emotional ties is key. While immediate economic gains might be subtle, the long-term benefits of this engagement are significant. Drawing inspiration from countries like Israel, Greece recognizes the importance of its diaspora in weaving a narrative of unity, resilience, and potential, far beyond just economic metrics.
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Given the current unpredictability of the global geopolitical landscape, making definitive predictions about the future of any sector, including technology, is challenging. However, there are several reasons to be cautiously optimistic about the trajectory of the Greek tech ecosystem.
First, Greece is experiencing a significant paradigm shift towards entrepreneurship, which is reshaping its startup landscape. Initially dominated by commerce and retail software, the Greek tech scene is now witnessing a broader array of entrepreneurs, including researchers and academics, taking bold steps into the startup world. This change is particularly impactful given Greece's high level of education and expertise in specialized fields. Notably, Greece boasts a remarkable concentration of top-tier AI talent, with 11% of Europe's top 0.5% AI researchers being Greek. This shift, coupled with the return of diaspora talent, positions Greece to tackle complex global challenges and build world-class companies, leveraging its intellectual capital to create solutions with global reach.
Second, Greece's geographical position offers a unique strategic advantage. The turmoil in surrounding regions, such as Ukraine and the Middle East, contrasts with Greece's stable and positive growth outlook. This stability, along with Greece's ongoing development and effective governance, makes it an attractive destination for top talent from these areas and for investors seeking growth opportunities in a relatively low-risk environment. Additionally, Greece's natural beauty and quality of life can be a significant draw, especially as advancements in technologies like AI reduce barriers from concept to creation, allowing for a more balanced lifestyle that blends hard work with inspiration and well-being.
If you think about the impact of things like AI, where the friction between having an idea and having that idea implemented becomes smaller, the value of inspiration, the value of creativity, goes up. So it's not about, how many hours do I put in? It's more about how many new ideas did I have?
Andreas Stavropoulos
Partner at Threshold Ventures
Third, while the global macroeconomic conditions are unlikely to ease immediately, they are not expected to deteriorate further. This stability is a positive sign for 2024, especially after the challenges of 2023, marked by higher interest rates and a shift from a long period of exceptionally low-cost capital. Both investors and founders have now begun adjusting to this new economic reality. Investors are becoming more risk-aware rather than risk-averse, and founders are recalibrating their valuation expectations. This adaptation suggests that stakeholders globally are well positioned to navigate the coming year, potentially leading to more resilient and sustainable growth.
The realization that we've reached the peak of interest rates and that inflation is being controlled and decreasing signals a potential reversal in the near future. This understanding alone is likely to encourage renewed investment and openness in the market. Additionally, the reality of opportunity pricing and founders coming to terms with more realistic fundraising expectations will drive more capital investment in 2024.
Apostolos Apostolakis
Partner at VentureFriends
First, a crucial learning from 2023 for the Greek tech ecosystem is the urgent need to minimize reliance on foreign capital. The progress in early-stage funding, bolstered by local sources such as government initiatives, VC funds from first-generation founders, and corporates, is commendable. However, as Greek startups reach maturity, the scarcity of local funding for growth stages becomes a significant issue. This scarcity forces these companies to depend heavily on foreign investments, which are often accompanied by stringent conditions. To empower the ecosystem to operate on its own terms and avoid premature sales of startups, developing a robust local market for growth capital is essential.
For years, Greeks have held the mentality that a major foreign investor or company will come and establish their business here, with Greece acting as a host country. However, this is certainly not a solution. I believe we are coming to the realization that we need to take action ourselves. We need to establish strong venture capital firms, develop robust growth equity funds, and build our own successful companies. We should be should be less obsessed with being a host country, and more focused on being builders.
Marco Veremis
Partner at BigPi VC & Co-founder and Executive Chairman of Upstream
Second, addressing the global challenge of talent scarcity takes on a particular urgency in Greece. The country's educational system needs to evolve to meet the tech industry's demands, necessitating stronger collaboration between corporations, startups, and educational institutions. Additionally, fostering local cutting-edge companies is key to training Greece's youth. With the nation's population projected to decrease from 11.23 million to 9.03 million by 2050, attracting foreign talent is also crucial. However, this involves being competitive in compensation, a challenging but necessary balance to strike. This dual strategy of nurturing local talent and competitively attracting foreign expertise is vital for the sustainable growth of the tech sector in Greece.
The Greek tech ecosystem stands at a pivotal juncture, with promising opportunities and formidable challenges ahead. The journey to a self-sustaining and globally competitive tech landscape requires strategic focus on local capital formation, talent cultivation, and competitive positioning in the global market.
In a nutshell, Greece is building momentum. But whether it's the type of problems Greek founders should address, securing substantial domestic growth capital, or navigating the intricacies of education reform, one thing is clear: there's a need to focus on hard problems. And if history has taught us anything, it's that Greeks don't shy away from hard problems.
The HealthTech landscape in Greece has observed notable development in recent years. From attracting venture capital of $12.9 million in 2020, the figure has risen sharply to $60 million in 2023 year-to-date, positioning the overall value of Greek healthtech firms at over $600 million. Several factors underpin this growth. On the global stage, there has been an accelerated shift towards digital health post-pandemic, and the potential of AI in healthcare is more apparent than ever. Domestically, milestones such as the inauguration of Pfizer's Digital Innovation Center in Thessaloniki in 2021 have provided a boost for the industry, as has the undeniable strength of Greek AI talent. Despite these advancements, the industry isn't without its challenges. Access to big data in healthcare remains a hurdle due to concerns around privacy, the inherent unstructured nature of data, and its often siloed storage. However, efforts like the European Health Data Space, with its goal to consolidate and organize medical data from EU members, making it accessible for research within a controlled framework, present a significant opportunity for European healthtech.
In 2023, the European tech ecosystem is projected to attract around $45B in investments, a significant reduction of 55% from the record-breaking $100B in 2021. This downturn also marks a 45% decrease compared to the $82B invested in 2022. The current investment climate reflects a broader macroeconomic shift, influenced by late-stage companies postponing funding rounds and a more cautious approach from investors. This has led to fewer large-scale, growth-stage investments, a key factor behind the reduced capital influx.
Despite this downturn, 2023 is poised to be the third-largest year in terms of total capital invested in European tech, quadrupling the investment volume of 2014. The current decrease in investment levels seems to be a recalibration following two years of exceptionally high activity, suggesting a return to a more sustainable growth trajectory in the long term.
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