A Beacon Of Growth Amidst Southern Europe’s Startup Boom For Cyprus

With the swift progression of the digital landscape, Southern Europe is solidifying its reputation as a dynamic hub of innovation and entrepreneurial zeal. This region is becoming increasingly recognised for its ability to foster groundbreaking technologies and cultivate startup ecosystems that are both resilient and forward-thinking.

Entrepreneurs across Southern Europe are leveraging these advancements to create impactful solutions, driving economic growth and establishing the area as a key player in the global tech community. The synergy of talent, investment, and supportive policies is propelling Southern Europe to the forefront of the digital revolution, highlighting its pivotal role in shaping the future of technology and business.

The latest “Sifted-50 Southern Europe” report highlights this dynamic transformation, showcasing the region’s fastest-growing startups for 2024.

Among these, Cyprus stands out with its singular yet significant representation, underscoring the island nation’s burgeoning potential within the European tech ecosystem.

Cyprus: A Rising Star?

While Cyprus may only have one company featured in the Sifted-50 rankings, this inclusion is a testament to the country’s growing influence in the tech and startup sectors. The report, which evaluates companies based on their compound annual growth rate (CAGR) in revenue from 2021 to 2023, provides a comprehensive look at the resilience and adaptability of startups across Southern Europe.

The Cypriot company’s presence in the top 50 is a beacon of hope and an indicator of the robust entrepreneurial activities within the nation. This achievement highlights Cyprus’s potential as a fertile ground for startups, driven by a favourable business environment, strategic geographical location, and a highly educated workforce.

The Broader Southern European Context

Southern Europe, encompassing Andorra, Cyprus, Greece, Italy, Malta, Portugal, San Marino, and Spain, has demonstrated remarkable resilience in the face of economic adversity. The region has seen a significant rise in startups that are not only surviving but thriving, even amidst double-digit inflation and rising interest rates. This resilience is reflected in the diverse sectors represented in the Sifted-50, ranging from B2B SaaS and fintech to deeptech and healthtech.

The report’s top-ranking company, Olistic from Barcelona, exemplifies the innovative spirit permeating Southern Europe. Olistic, a wellness brand focused on treating hair loss, boasts an impressive CAGR of 529.01%. This remarkable growth is indicative of the broader trend across the region, where startups are leveraging cutting-edge technology to address real-world problems.

Cyprus’s Strategic Advantages

Cyprus’s inclusion in the Sifted-50 is not just a milestone for the island, but also a reflection of its strategic advantages that are conducive to startup growth. The country offers a business-friendly regulatory environment, attractive tax incentives, and a well-developed infrastructure that supports digital innovation. Moreover, its strategic position at the crossroads of Europe, Asia, and Africa makes it an ideal hub for companies looking to expand their reach across these continents.

The Cypriot government has also been proactive in fostering a vibrant startup ecosystem. Initiatives such as the Cyprus Startup Visa scheme aim to attract international talent and investment, further bolstering the country’s position as a growing tech hub. Additionally, Cyprus’s membership in the European Union provides startups with access to a vast single market, facilitating easier cross-border trade and collaboration.

The European Startup Landscape

The Sifted-50 report sheds light on the broader European startup landscape, highlighting how Southern European countries are catching up with their northern counterparts. Italy, for instance, leads the pack with 24 companies in the top 50, followed by Spain with 16. Portugal, Greece, and Cyprus also make notable contributions, indicating widespread and balanced growth across the region.

Italian startups have particularly made significant strides, with Milan emerging as a central hub. The city is home to 12 of the top 50 companies, driven by a robust support system that includes active investors like CDP Venture Capital and Azimut Group. Spain’s vibrant tech scene, exemplified by Barcelona and Madrid, continues to thrive, with companies like Factorial and Barkibu leading the way in HR tech and pet insurance, respectively.

Key Trends and Insights

Several key trends emerge from the Sifted-50 report, providing valuable insights into the factors driving growth in Southern Europe. One notable trend is the dominance of B2B SaaS companies, which constitute 19 of the top 50 startups. These companies are leveraging software solutions to address various business needs, from property management to HR services.

Another trend is the significant presence of consumer-focused startups, particularly in the beauty tech, foodtech, and travel tech sectors. Companies like VICIO, a food delivery service backed by high-profile investors such as Lionel Messi, demonstrate the potential for consumer tech startups to achieve rapid growth by tapping into everyday needs and leveraging strong branding.

The list

Cyprus has one company represented in the top 50 of the list. Italy leads with the most companies, boasting 24, of which 12 are based in Milan. Spain follows with 16 companies, then Portugal with 6, Greece with 3, and finally Cyprus with 1.

Here are the 50 startups mentioned in the “Sifted-50 Southern Europe” report, ranked based on their growth:

1. Olistic (Barcelona) – Wellness brand that treats hair loss.
2. 1000farmacie (Naples) – Online marketplace of Italian pharmacies.
3. Barkibu (Gondomar) – Pet insurance provider.
4. Coverflex (Braga) – Employee benefits platform.
5. Prosperty (Athens) – Online platform for buying & selling properties.
6. Ukio (Barcelona) – Airbnb-esque short-term rentals.
7. Smartpricing (Arco) – Revenue management software for hoteliers.
8. VICIO (Barcelona) – Fast food home delivery chain.
9. Equalfood (Lisbon) – Connects farmers with local buyers.
10. Fiscozen (Milan) – Software for accounting, invoicing & tax returns.
11. BizAway (Spilimbergo) – Business trip management tool.
12. Payflow (Barcelona) – Salary advance platform.
13. Up2You (Milan) – Carbon accounting software.
14. Cosmico (Milan) – Tech team recruiter.
15. BRIDGE IN (Lisbon) – Employer of record service.
16. Multiverse Computing (Donostia) – Develops quantum software.
17. Factorial (Barcelona) – HR software covering payroll, talent, and finance.
18. Toduba (Turin) – Expense management tool.
19. Exein (Rome) – IoT cybersecurity.
20. Doctorsa (Rome) – Telehealth service.
21. WeRoad (Milan) – Holiday booking platform.
22. EVO Human Performance (Athens) – Uses data to assess the health/performance of athletes.
23. Aryel (Milan) – Helps agencies & brands create digital ads.
24. MyInvestor (Madrid) – Neobank for savings, mortgages & investment.
25. Amenitiz (Barcelona) – Bookings management tool.
26. Caracol (Milan) – Deeptech focused on industrial tech.
27. CyberGuru (Rome) – Cybersecurity solutions.
28. Mundimoto (Barcelona) – Online motorbike marketplace.
29. Shakers (Madrid) – HR tech for short-term hires.
30. Foorban (Milan) – Foodtech startup.
31. Freedome (Milan) – Travel tech focusing on outdoor pursuits.
32. instacar (Athens) – Mobility platform for car leasing.
33. knokcare (Matosinhos) – Digital health for telemedicine.
34. Babaco Market (Milan) – Foodtech focusing on reducing food waste.
35. Waterview (Turin) – Climate intelligence.
36. Zappyrent (Milan) – Proptech for short-term rentals.
37. Jobtech (Milan) – HR tech for recruiting.
38. Incapto (Barcelona) – Foodtech startup.
39. Soplaya (Udine) – B2B foodtech marketplace.
40. CASAFARI (Lisbon) – Proptech platform.
41. FABA (Treviso) – Edtech company.
42. HiJiffy (Vidigueira) – Hospitality tech for communication.
43. Fracttal (Madrid) – Industrial tech for asset management.
44. Trustfull (Milan) – Cybersecurity solutions.
45. Flanks (Barcelona) – Wealthtech platform.
46. Dazetechnology (Bergamo) – Electric vehicle charging solutions.
47. AIKO (Turin) – Spacetech for automation.
48. Mercuryo (Nicosia) – Fintech for crypto and DeFi.
49. Novicap (Barcelona) – CFO tech stack for financing.
50. Barbara (Madrid) – Cybersecurity for industrial IoT.

Investment and Funding Dynamics

Investment dynamics play a crucial role in the growth of Southern European startups. The report highlights that companies in the Sifted-50 have collectively raised an average of €20.7 million, with notable funding rounds led by international investors. For instance, Spanish HR tech company Factorial has raised €300 million, the highest among the top 50, reflecting strong investor confidence in the region’s startup ecosystem.

Cyprus, although represented by a single company, benefits from a growing interest from international investors looking to tap into the untapped potential of the island’s startups. The strategic initiatives by the Cypriot government, combined with the private sector’s efforts, are beginning to bear fruit, attracting venture capital and fostering a conducive environment for innovation.

Challenges and Opportunities

Despite the positive trends, startups in Southern Europe face several challenges. High inflation rates and economic uncertainty pose significant risks, requiring companies to be agile and adaptive. Additionally, the regulatory environment in some countries can be cumbersome, necessitating reforms to facilitate easier business operations.

However, these challenges also present growth opportunities. The increasing focus on digital transformation across industries offers startups the chance to innovate and capture new markets. Furthermore, the rise of remote work and digital nomadism, particularly in attractive locales like Cyprus and Portugal, provides a unique advantage for startups to attract global talent and expand their operations.

The inclusion of a Cypriot company in the Sifted-50 rankings is a promising sign of the island nation’s growing influence in the European tech landscape. Cyprus, with its strategic advantages and supportive ecosystem, is well-positioned to become a significant player in the region’s startup scene. As Southern Europe continues to evolve, the success stories from countries like Cyprus, Italy, and Spain highlight the region’s potential to drive innovation and economic growth.

The Sifted-50 report not only celebrates the achievements of these startups but also provides a roadmap for future growth. By leveraging their unique strengths and addressing the challenges ahead, Southern European startups can continue to thrive and contribute to the global tech ecosystem. Cyprus, in particular, stands out as a beacon of growth, exemplifying the resilience and entrepreneurial spirit that is driving the region forward.