Europe catches up the Silicon Valley in startup development. According to the 2017 Global Startup Ecosystem Report, Europe outperforms the United States in some indicators. European angel market showed a moderate increase - 8.3% since 2013. European investors invest in technical projects in different areas like production, Biotech and science of life.
We prepared for you an infographic with 5 the best startup ecosystems. When ranking the following indicators were taken: early-stage funding per startup, market reach, talent, an attraction for foreign startups and many others.
Barcelona is one of the world’s leading tourist, economic, trade fair, and cultural centers. The city is economically the strongest region of Spain, so it’s no surprise that funding in the region is plentiful. In 2015, 56% of all euros invested in Spain went to Catalonia-based startups. The vast majority of this venture capital came from international investors, at 85%, but there is also a vibrant and continuously developing business angel community. Barcelona alone is currently home to an estimated 900-1,100 tech startups.
Barcelona had the third fastest exit growth rate of all ecosystems, behind only Montreal and St. Louis. This statistic favors smaller ecosystem, but it is a strong positive signal nonetheless.
Barcelona has the 2nd highest percentage of their software development team having a software engineering degree at 87%. Silicon Valley is at 81%.
Barcelona founders have the 5th highest percentage of founders over 30, at 89%.Only 9.9% of customers for startups in Barcelona come from outside of the continent—one of the lowest rates in the world—which correlates with a lesser ability to reach global markets.
Estonia has tech-savvy government, a global-ﬁrst mindset, and the ability to incorporate a company online in less time than it takes to drink a cup of coﬀee. Its unique e-residency program allows international founders to set up online businesses under Estonia’s laws — welcoming in digital nomads who want a slice of Europe’s wide market, without ever needing to set foot in the country.
Estonia does not rank close to the top of the Index in terms of Startup Experience and Performance, but Early-Stage Funding inﬂows, strong Global Connectedness and low-cost, high-quality engineering Talent indicate the ecosystem is on the rise.
Estonian startups have the world’s highest success rate of obtaining Visa for foreign candidates at 84.5%, more than double the success rate than the global average (41%).
Frankfurt is an emerging startup ecosystem with promising assets and performance, especially with regards to Talent, Startup Experience, and Corporate Involvement. Fueled with an educated workforce that is increasingly turning to the startup scene as a career choice, Frankfurt’s ecosystem could become much more than just a reputable FinTech hub. Now Frankfurt has 200-300 currently active tech startups, Frankfurt is home to more than 80 FinTech companies.
The Frankfurt ecosystem beneﬁts from business and tech talent drawn from top class universities. As one result, Frankfurt has the highest percentage of their software development team with a software engineering degree at 88% (Silicon Valley at 81%).
Helsinki is a very cohesive ecosystem and a runner-up to this year’s top 20 ranking. Helsinki ranks particularly well in the Talent and Market Reach Index. Because of its small community, Helsinki has the ability, as well as the momentum, to develop a position of inﬂuence and to produce the connective tissue that is needed to build and grow a robust startup community.
Helsinki startups immediately Go Global targeting large innovation markets at a higher rate than nearly any other ecosystem. 66% of Helsinki startups begin by targeting the U.S. or U.K. market — trailing only Estonia and Tel Aviv. Helsinki startups also report a high Foreign Customer rate at 43% (global average 23%).
Jerusalem is a rising star on the global startup scene, with approximately 500-700 active tech startups at the core of its community.
Jerusalem is a top contender that narrowly fell outside of this year’s top 20 ecosystem Index overall. The city’s weakest factor is performance, where interestingly its exit value is very strong but the total value of the pre-exit startups is weak — indicating strong outlier performance with weaker fundamentals. With all the momentum gathering, we expect more record-breaking numbers and technological innovation from Jerusalem in the near future.
Jerusalem startups have the 7th highest rate of Immigrant Founders in the world at 34%, interestingly, more than double the percentage of Tel Aviv (16%).
Jerusalem startups display a relatively low Percentage of Founders with a technical background, at 74%, compared with Tel Aviv and Silicon Valley at 93% and 87%, respectively.
We also want to distinguish other startup ecosystems of Europe.
Lisbon is a lower ranked startup ecosystem, mostly due to its infancy. It doesn’t have many exits or people who have experienced exits before, but its valuation rank does outpace its other performance indicators, its early-stage investment is growing at a fast pace, and the ecosystem is integrating well with the rest of Europe. Lisbon currently counts more than 15 incubators, 20 acceleration programs, and a knockout community of Business Angels and Venture Capital investors. In short, it is not very surprising that Lisbon is already home to an estimated 200-300 tech startups. Lisbon has the highest rate of Women Founders in Europe, pointing towards inclusive growth, which could become a competitive advantage over time.
Malta is one of the world’s smallest and most densely populated countries. Its tech ecosystem especially booms in the gaming and gambling sector. The local ecosystem currently boasts of around 50-100 tech startups. 62% of Malta startups immediately target the large innovation markets of the U.S. and U.K., 6th highest rate in the world. Malta has the 4th highest Percentage of Immigrant Founders at 39%, trailing only SV, Berlin and London. Considering all the concerted eﬀorts that are currently invested into the ecosystem, more success stories are expected to come out of Malta in the near future.
Moscow currently boasts approximately 1,500-3,400 startups. During the last couple of years, the Russian capital’s tech ecosystem has developed a strong support system for startups and investors alike. Over the last few years, as several European and Asian ecosystems have achieved an important increase in Performance, Moscow has been aﬀected by political issues that led to a leakage of talent, capital, and investors, leading to one of the worst rates of Early-Stage Funding growth among the 56 ecosystems measured. Now, despite its top Talent Quality, high Output of startups, and large economy, its ecosystem has been unable to produce many globally successful startups.
92% of seed rounds came from local investors, indicating a lack of capital attracted from outside of Moscow and making it more diﬃcult for startups to access funding.
Moscow engineers are some of the most experienced in the world, with 83% of engineers having at least two years of startup experience; this is just a tick behind the leader, Silicon Valley, at 87%.
So, we can see that despite a global cool-down of startup funding in the first quarter of 2017, there is a development of startup ecosystems worldwide.