How the Greek Debt Crisis Created a Thriving Sector of Startups

In 2015, I met with a group of Greek startups at Mobile World Congress in Barcelona to learn about the new-but-rapidly-expanding startup scene in Greece — particularly Athens and Thessaloniki.

What followed was the creation of many startups — particularly those that required little more than a desk and a laptop. What Greece did have was a highly educated, young population. A lot of the startup founders I spoke to told me that they had nothing to lose in becoming entrepreneurs, as there were no jobs anyway. With many traditional employment pathways gone, over 1000 startups sprung up, along with a burgeoning ecosystem of incubators, venture investors, and university entrepreneurship programs.

From Crisis to Opportunity

Four years later, Greece’s economic situation is improving. Unemployment dropped from 26 percent in 2015 to 18 percent in 2019. Most capital controls have lifted — including the €5000 cash withdrawal limit from banks and cash machines that many startups complained to me about.

I recently visited Athens and found a startup scene that was still flourishing but with one pronounced difference — there was now ample VC funding, increasing the likelihood of success for startups. In 2018, VentureFriends announced new funding of €45 million for seed funding, and Marathon Venture Capital, the second closing of its seed fund, bringing its total to €32 million. Further, the European Investment Fund aims to boost entrepreneurship and create a lasting impact on local businesses by attracting private funding to all investment stages of the local equity market through a €260m fund of funds called the Equifund to invest in Greek start-ups.

I spoke to George Tziralis, Partner at Marathon VC, a company responsible for funding some of Greece’s most successful startups including workable and taxibeat. When I shared my observation that startups I had met earlier were largely the product of graduates unable to secure other employment and those laid off elsewhere due to the economic crisis, he noted:

“My guess is that this is still the case in large part, but more and more one can see also more mature and conscious entrepreneurs. The incubators also are slowly progressing in this…