Greek Startup Scene in 2015: A Year in Review

(A very short version of this article was published as a guest article on The Hundert, Berlin's most prestigious print publications on startups, on the occasion of their "Highlights of the Year 2015" Special Issue. The original version was written during December 2015 and few adds were made in January 2016. The very short version was published on the Vol. 7, January 2016 issue. You can download the online version of The Hundert Vol. 7 for free and read 20 international contributors recording the progress of the startup ecosystem they're part of by subscribing here)

Greek startup ecosystem was brought into the spotlight during the financial crisis and it keeps growing ever since, with turning year being 2012, when JEREMIE funds were established in partnership of EU/Greek State resources and private investors.

The past couple of years saw the greek ecosystem living in the booming phase, but 2015 saw a stage of consolidation, with a lot of new successes but also with a lot of balancing out.

2015 started with the best of signs, with Persado (marketing copywriting automation through NLP algorithms) announcing in January a $21mn Series B from StarVest, Citi, American Express and Bain Capital. Money was poured into greek-origin startups in higher volumes than previous years; Workable, (SaaS for hiring SME’s), raised $5mn from Israeli 83North and their original Greek investors Openfund and a massive $27mn Series B led by Balderton and Notion; resin.io (remote devices management for the IoT era) raised $3mn from Silicon Valley-based DFJ, Openfund and angel investors. Multi-million rounds were also closed by Intale ($2,5mn), Pinnatta ($1mn), Pollfish (2,2mn euros), Transifex ($4mn) and incrediblue (1,6 mn euros).

Personally-collected preliminary data show that in 2015 there were 31 investment deals worth of $81.66mn* in greek-origin startups, while the latest-available data for 2013 indicated investments of $45mn.

M&As activity kept up in 2015, following the small number of deals completed the previous years. E-food.gr (Greece’s most dominant player in online food orders) and ClickDelivery.gr (second local player), were both acquired by Rocket Internet’s Delivery Hero, as part of their Yemeksepeti snapping up. Travelplanet24/Tripsta (OTA with a multi-million-backing from JEREMIE) announced in March their merge with AirTickets.gr (among country’s biggest flight bookings online platforms). AbZorba Games (social casino mobile games developer) was acquired by Greentube, subsidiary of Austria’s Novomatic, in order to expand in physical VLT’s.

Still on the exits front, Openfund (among Greece’s most active VC firms) announced their exit of their first fund portfolio company YouScan, a social media management platform, to Yell.

What was kind of new, we saw scaling companies now investing in others; Daily Secret (now Savoteur) acquired Berlin-based news site Sugar High, in order to expand in Germany, while Travelplanet24/Tripsta purchased an equity stake in 30K, a startup developing loyalty programs for airlines. Skroutz (largest greek e-commerce search engine) invested in jamjar, an e-shop for greek traditional handcrafted products.

But it wasn’t all that peachy for the greek startup scene this year; for the first time** we saw startups closing down, or at least going public with their failures. Most notable examples were two Openfund-backed companies; longaccess after two funding rounds of 410k euros in total to build a platform for long-term deposit of digital files went under after failing to onboard enough users, while Tapely (developer of music social network where users could put together digital mixtapes of favourite songs) shut down after two funding rounds of 500k euros in total. Now rumour has it within the startup scene that more startup companies are about to go bust, finding it difficult to raise the Series A rounds that will help them step up their game.

A lot of startup companies were heavily impacted in July by capital controls in the greek banking system after a snap referendum call by the Prime Minister. Smaller tech companies found it almost impossible to transfer money outside of Greece to pay even for their servers and domain hosts, which led to a movement of Greek techies abroad paying the bills for their Greek peers.

Even big tech faced some serious challenges this year, making international headlines with their troubles. Fast-growing OTA AirFastTickets saw their license being suspended from IATA, defaulting and eventually closing down their offices, while GLOBO (mobile marketing and enterprise software developer) was accused for cooking up their financials, causing to CEO and top executives resigning. Now more established tech companies from Greece are under the looking glass of international press and investors inquiring their trustworthiness.

Greek startups keep the lessons learned from 2015 and are opening up to new opportunities in 2016.

*Deals number include both disclosed and undisclosed investments, funding total lacks the amount of undisclosed investments. Original prices in euros or in dollars. Where in dollars, original prices were kept. Where in euros, original prices were converted to dollars using the 2015 average of EURUSD currency rates, extracted from the European Central Bank data.

**[28/01 update after readers feedback]: 2015 wasn't really the first year we saw startups closing down or going public about it. In summer 2014, Cookisto (peer-to-peer food preparing and delivering) was silently shut down and pivoted to Forky (on-demand 'honest food' delivery), which later announced a seed funding round of 800k euros from Jeremie Openfund II, BlueWire Capital and angel investors. Additionally, 2015 started in the aftermath of Locish (social Q&A mobile application) closing down which was publicly announced on December 30th, 2014, after two funding rounds (60k euros from Jeremie Openfund II in 2013 and $820k from Odyssey Jeremie Partners, Jeremie Openfund II, Thanos Triant, George Papadopoulos and Argyris Zymnis in March 2014). Locish two founders went on during 2015 to kickstart Weengs (a first-mile delivery startup) in London after a seed investment from angel investors.