Startup cities: Top 10 entrepreneurial ecosystems in EMEA

By Kate Birch
From access to talent and available capital to incubator programmes, Business Chief explores the cities in EMEA providing the best startup conditions

From access to talent and available capital to incubator programmes, Business Chief explores the cities in EMEA providing the best startup conditions, ranked with reference to Startup Genome’s 2020 report, and researched by Business Chief

10: Dublin

Strengths AI * Fintech * Software Enterprise

Unicorns Messaging platform Intercom ($1.3bn), HR tech firm Workhuman ($1.2bn)

Business Chief says... Dubbed the Silicon Valley of Europe, Dublin has a thriving tech community, supportive business ecosystem and a talent-rich pool of techies from Europe. Many tech giants have European HQ here due to low corporation tax (Netflix, Google, Facebook, Microsoft, Slack) and so support for startups via innovation schemes and funding is prolific. Support also comes from government-backed Enterprise Ireland and a strong and growing VC and angel investor community, plus some of Europe’s best accelerator and incubator programmes (NRDC, Dublin Business Innovation Centre). Top-tier US VCs like Sequoia invest heavily in Irish firms.

The city is home to 2,200 startups and is known to have the highest level of capital investment in software R&D, with many successful startups in the enterprise software sector, including unicorn Intercom, which has doubled revenues over the past two years, and Fenergo, which is said to be eyeing a $1.5bn valuation. Startups to watch include social enterprise app KeepAppy.


09: Copenhagen

Strengths Edtech * Fintech

Unicorns Customer service platform Zendesk ($9bn), B2B transaction platform Tradeshift which became a unicorn after raising $240m in 2020.

Business Chief says... Denmark is a consistent leader in entrepreneurship education thanks to the Danish Foundation for Entrepreneurship, while the innovative Technical University of Denmark, which has catalysed some 2,200 businesses breeds advanced tech talent. Many global startup unicorns, like CMS firm Sitecore and software startup Unity began life here.

Active VCs include the Danish Growth Fund which has financed 7,300 ventures across all sectors, from infancy to IPO, and invests heavily in edutech, including a record-breaking $30m investment in Area9 Lyceum. Copenhagen is ranked #2 worldwide for educational investments (OECD), with startup successes including virtual lab simulation startup Labster.

Investments in Danish fintech rose from $80m in 2018 to $210m in 2019 with accelerators including Fintechlab and Startupbootcamp. Copenhagen Fintech is a vibrant community of startups, corporate financial institutions, and an accelerator, all fostering high-growth fintech startups including unicorn Tradeshift.


08: Munich

Strengths Enterprise Software * Construction Tech * Mobility

Unicorns Market leader in process mining Celonis ($2.5bn), revolutionary ai mobility service Lilium ($1bn), online HR recruiting platform Personio ($1.7bn).

Business Chief says... Home to Germany’s most powerful economy, 243 corporates, 114 local investors, prominent universities and research institutions and many accelerators, it’s no wonder Munich has 1.3K startups and has emerged as Germany’s Industrial TechHub and one of Europe’s key tech hubs.

According to Dealroom, the city’s startups have collectively created over $20bn in value since 2013, including the city’s biggest success stories, like the now global bus platform Flixbus ($2.25bn) and air taxi tech firm Lilium. Munich Hub connects startups with the many multinationals headquartered here, including Microsoft, Google and Intel, BMW, Siemens and Allianz, while BayTOU assists tech startups with grants and funding, and Bayern Kapital supports high-tech startups.

Sector strengths include enterprise software and construction tech, although the city is home to rising stars across all industry verticals, including fast-growing digital finance platform Wirecard, global price comparison platform Holidu, and hospitality startup Limehome. Munich has nine unicorns.


07: Zurich

Strengths Fintech * Biotech * Robotics

Unicorns Mobile first-banking app Numbrs ($1bn), cybersecurity startup Acronis ($1bn).

Business Chief says... 2019 was a record year of VC investment in Swiss startups, an increase of 86% on 2018, while in 2020, start-ups generated more than $230m for the second consecutive year. Switzerland’s largest city boasts a highly integrated tech ecosystem with many of its large corporates nurturing startups, including Google which houses the largest R&D centre outside the US here, and Credit Suisse and UBS, both heavy investors in fintech startups.

Blockchain and crypto startups are well-supported by the regulatory environment of Zug (Crypto Valley) located next door to Zurich and home to the Ethereum Foundation (non-profit supporting this blockchain), and by the many blockchain incubators, accelerators, VCs and angel groups.

Impact Hub Zurich is active in programming for startups, and as one of the highest GDPs per capita worldwide, the city has plenty of available funding, led by the Swiss Entrepreneur Fund and Digital Transformation Fund from Swisscom. Strong sectors include fintech, health tech, biotech and robotics. Zurich’s top university ETH produces deeptech talent.


06: Berlin

Strengths AI * IoT * Blockchain * Fintech

Unicorns Mobile banking platform N26 ($3.5bn), SaaS banking platform Mambu ($2.08bn), biotech firm ATAI Life Sciences ($2bn), insurance platform Wefox Group ($1.65bn), grocery platform Gorillas (US$1bn).

Business Chief says... Known to be the European hub for IoT and Blockchain, Berlin is top for tech in Europe, partly due to its pull of young global tech talent, and has been ranked (Nestpick) as the world’s best city for millennials. The government incentivises R&D, recently increasing the ratio of R&D investment to 3.5% of GDP and investing $17.4bn in key research areas by 2025.

Fintech startups are flourishing, including unicorn N26, thanks to the many support organisations, including fintech-focused VC firm FinLeap, a huge hub for European Fintech startups (H:32), and innovation labs and accelerator programs run by Deutsche Bank, Axel Spring, and others.

Berlin also has more AI startups than any other Germany ecosystem and is expected to make over $2.2bn in revenue by 2025. Global renowned centres like the German Research Center for AI and the Berlin Center for Machine Learning are located here. The government is investing $3.4bn over the next six years to develop Germany’s research and AI capabilities.


05: Paris

Strengths Edtech * Fintech

Unicorns Marketplace platform Meraki ($1.5bn and acquired by Cisco), online auto marketplace BlaBlaCar ($1.45bn), music platform Deezer ($1.4bn), game developer Voodoo ($1.4bn).

Business Chief says... Paris is renowned for its strong R&D focus, with total spend of $22.5bn in R&D, and for its ability to attract top talent, with the French Tech visa offering funding, acceleration and incubation services for a year.

Paris's edtech startup ecosystem is strong, supported by two edtech VC funds (Educapital and Brighteye Ventures), and industry bodies like the EdTech Observatory and EdTech France, with success stories including 360Learning, backed by 15 investors.

With financial services the largest business sector in Paris, including six Global 500 companies, fintech is robust. The Paris Fintech Forum hosts 300+ CEOs and 2,600+ participants from 75 countries and successful Fintech startups include challenger business bank Qonto, which recently raised $115m and mobile payment startup Lydia, which landed $83m in December 2020, including from Tencent. As the world’s style capital, fashion is a focus too with sustainable startup Vestiaire Collective recently reaching unicorn status.


04: Amsterdam

Strengths Agtech * Edtech * Biopharma

Unicorns Cloud communication platform MessageBird ($3bn), blockchain tech firm BitFury ($1bn), mobile payment giant Adyen.

Business Chief says... Amsterdam’s tech ecosystem hit $86bn in 2020, compared to just $11.8bn in 2015, according to Dealroom, not surprising considering it is home to Europe’s top five most valuable tech companies. The city boasts a high density of startups, with more than 1.1 startups per 1,000 inhabitants, including 12+ unicorns. Amsterdam is home to huge startup successes: largest payment service providers in Europe (Mollie), travel marketplace giant and navigation specialist TomTom.

There is strong support from local investors, with many of the 200 multinationals with European HQ here (Netflix, Uber, Tesla, Salesforce) offering incubators, programmes and funding. 2019 proved a record investment year for the city ($1.4bn) mainly driven by online grocery platform Picnic’s €250m funding round, and throughout 2020 health and edtech grew. The city has a strong food industry, partly thanks to Wageningen University & Research (#1 in agriculture/forestry in 2019) with Agtech startups prolific. Biopharma is also proving strong.


03: Stockholm

Strengths Cleantech * Fintech * Life Sciences

Unicorns Fintech powerhouse Klarna ($31bn), green battery cell supplier Northvolt ($3.5bn) and soundtrack content creator Epidemic Sound ($1.4bn).

Business Chief says... Home to startup trailblazers like Spotify, Klarna and Skype, Stockholm is proof that success breeds success having created a cyclic network of support, capital and top tech talent, fed by its top-ranking universities (think the Royal Institute of Technology) and a tech-heavy workforce (20% work in tech, the highest in Europe).

Cleantech is a focus in Stockholm, which ranks third globally for innovation, and is expected to rise as Stockholm Royal Seaport is transformed into the first city district in the world with full-scale smart grids. Life sciences is also strong, helped by the city’s Karolinska Institutet, ranked #10 worldwide in Life Sciences, and boosted by startup successes like Cormorant Pharmaceuticals, acquired by Bristol Myers Squibb for $520 million in 2016.


02: Tel Aviv

Strengths AI * Fintech * Cybersecurity

Unicorns Project management ($1.9bn), cloud security firm Wiz ($1.7bn), tool builder platform IronSource ($1.5bn), on-demand mobility app Gett ($1.5bn).

Business Chief says... Tel Aviv is home to the highest number of startups per capita worldwide after Silicon Valley and ranks third in the number of AI startups globally, including unicorn OrCam Technologies. Not surprising considering the city is home to 107 multinational companies with R&D centres and innovation hubs, including Amazon and Alibaba, and government support via the Trufa National Pre-Seed Fund which offers startups grants of up to 85% for approved expenses.

AI is the leading startup sector (40.7% of startups are AI-focused) due to programmes like Google’s startup accelerator which focuses on AI and machine learning. Cloud, data and cybersecurity startups are prolific, with Israel exporting $6.5bn in cybersecurity products annually and home to six cybersecurity university research centres.

Notable startups include AI chip developer Habana Labs, acquired by Intel for $2bn in 2019 and cybersecurity startup Tufin which went public following a valuation of $450m.


01: London

Strengths Fintech * Edtech

Unicorns Global payment platform ($15bn), data centre operator Global Switch ($11.1bn), mobile app Hopin ($5.65bn), fintech firm Revolut ($5.5bn)

Business Chief says... London was at the heart of VC funding growth in Europe’s tech sector in 2020 with tech firms raising $10.5bn, almost 25% of Europe’s VC total, making London the second fastest-growing mature tech hub worldwide from 2016-2020, according to Dealroom. It helps that Europe’s VC market is mainly based in the UK city with London VC firms raising $7.8bn in new funds in 2020.

In particular, London is renowned for its fintech prowess, producing 18 of the city’s 43 unicorns and attracting half of all European fintech investment, with fintech startups raising US$4.3bn in 2020, including KI Insurance ($500m) and ($150m). Beyond fintech, edtech is a strength with 500+ edtech firms and predictions of reaching $4.4bn by 2021.

For health tech, investment remained strong throughout 2020 including for Babylon Health ($100m) and Cera ($75m), while enterprise software saw significant investment in 2020 in London increasing 82% to $1.8bn, as did London’s transport startups, growing 7.5X in five years, led by Arrival and Cazoo in 2020.



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