Portugal has increasingly positioned itself as a leading destination due to its quality of life, safety, climate, culture, talent and business-friendly environment. These factors have played a key role in the creation of a dynamic and fast-growing startup ecosystem.

What is a startup?

A startup is a young company or project launched by a group of entrepreneurs to create, develop and/or validate a scalable and repeatable business model, usually based on an innovative product, business model and/or a new market segment.

The next stage in a startup’s lifecycle is scaling up. A scaleup is typically defined as a phase of business development marked by growth in markets, revenues and workforce. The financial objective of a scaleup is to generate returns for its shareholders, either through an exit (M&A – mergers and acquisitions; IPO – initial public offering) or through dividend distribution as the company becomes profitable.

Depending on their level of development, startups may be at different stages of evolution, each with distinct needs in terms of incentives, capital and risk management.

Stages of startup development

Pre-seed

Companies that are formally established or in the process of incorporation, at a very early stage of development.

At this stage, they typically explore, assess or develop an initial idea or concept before launching an MVP (minimum viable product). Companies usually incur costs without generating revenue, and investment is secured through own resources or early backers, representing a high-risk investment.

Early stage and seed

Companies that have developed a product or service and are refining it while identifying their market, but have not yet reached break-even.

At this stage, companies usually face high costs and may begin generating revenue. Funding often comes from own resources or external investors and is considered a more mature, lower-risk investment.

Growth/scaleup

As revenues stabilise, traditional financing methods become available, such as loans, venture debt and equity sales. Growth becomes more mature and risk is significantly lower.

Distribution of startups by stage of development

Source: Statista 2018

Relevant indicators

The Portuguese startup ecosystem is still relatively young, but it is growing at a fast and steady pace, accounting for 1.1% of national GDP.

Portugal has also strengthened its position at European level:

OVER 2,150 REGISTERED STARTUPS

Startupportugal.com | 2021

25,000 JOBS CREATED

Startupportugal.com | 2021

7 PORTUGUESE UNICORNS

Farfetch | OutSystems | Feedzai | Talkdesk | Remote | SWORD Health  | Anchorage

13% ABOVE THE EUROPEAN AVERAGE IN STARTUPS PER CAPITA

Dealroom.co | 2020 

12TH IN THE TOP 100 EMERGING ECOSYSTEMS

Startup Genome | 2020 

12TH MOST INNOVATIVE EU COUNTRY

Innovation Scorecard EU  

WEB SUMMIT HOSTED IN PORTUGAL UNTIL 2028