Greek start-ups rise from the ruins

“E-commerce, travel, cloud technologies, mobile, social, software as a service and internet of things are all popular,” he says. “And the birth rate of technology start-ups is now massively exceeding the death rate of old companies.”

Chris Psaltis founded Mist.io in 2010, providing a mobile management, monitoring and automation platform for servers across clouds. He built up the business during the crisis by using Greece’s highly-skilled, unemployed workforce.

“We have a lot of talented people here with nothing to do,” he says. “In Silicon Valley, competition is high, here the talent has been abandoned.”

Greek employment law poses a few issues, however. “National insurance and tax adds 45pc to the cost of each employee,” says Nikos Moraitakis, co-founder of the successful HR platform Workable. “There are lots of weird restrictions in Greece about the times that people are allowed to work. As a start-up, you might have people working late or on weekends to support international customers, so you’re violating the law in little ways all the time.”

Moraitakis and his co-founder Spyros Magiatis met while working at Greek mobile advertising powerhouse Upstream. The technology giant, which generates 99.5pc of revenue from outside Greece, was founded by Marco Veremis in 2002, and reported system revenues of $200m last year. Upstream was the first of the next generation technology firms to focus purely on non-domestic revenues.

“When we started, the economy was very insular, inward-looking,” said Veremis, this year’s winner of EY’s Greek Entrepreneur of Year award. “In the technology sector, most companies were serving the state. But from the beginning, we were very outward looking.”

Today, most Greek start-ups have been launched with this same international focus. “If your product or service targets the Greek market, you’re dead,” says Psaltis.

Technology may be popular, but other sectors are also experiencing a renaissance. Start-ups are springing up across tourism, and food.

“Before, Greece was very import-led,” says Panos Papazoglou, managing partner of EY Greece. “50pc of the tomatoes we were consuming were imported. It was crazy. Now we are seeing many young people going into the agricultural sector, producing premium products for export.”

The Greek prime minister, Antonis Samaras, has called on manufacturers of traditional foods to help turn Greece into an export economy. Firms like Papadimitriou, which produces high quality vinegars, are now exporting across the globe, and are set to generate €60m in revenue within five years.

Tourism is also booming, with a record 18.5m visitors forecast for this year, up from 17.9m in 2013. Revenues, predicted to hit €13bn this year, make up a sixth of Greece’s GDP. A number of start-ups have sprung up to milk this cash cow, from taxi app Taxibeat, which allows users to rate their rides, to Discoveroom, a platform for boutique hotels to market themselves.

Incrediblue, a 2012 start-up that matches travellers with boat owners, has attracted more than $800,000 (£470,000) worth of seed funding to date. Co-founder Antonios Fiorakis says, “Greece has a massive pool of available boats. The possibilities are endless.”

Meanwhile, as the eurozone begins preparing a third bail-out package, four new Greek venture funds have been created. Jeremie Openfund, Odyssey, First Athens, and PJ Tech Catalyst have announced plans to invest in more than 30 Greek companies in three years. International investors are increasingly making punts on Greek start-ups too. Workable recently received funding from Greylock, Bugsense was sold to Splunk, and Fleksy received funding from Kleiner Perkins.

According to financial services firm EY, deal flows in Greece peaked in this April, with about $80bn pumped into companies in a month.

The Greek government is streamlining the processes, but start-ups are still held back by a few legacy issues. “It used to be extremely difficult to set up a company in Greece,” says EY’s Papazoglou. “I know of a Greek shipping entrepreneur who wanted to launch a major hotel complex in the Peloponnese. It took him 14 years to get all the licences.”

The political landscape is also fraught. Parties at the extreme right and left are attracting more votes. “People have nothing to lose, so they are going for the parties making the biggest promises,” says Kyriacopoulos. And universities are failing to churn out start-ups at the same rate as elsewhere in the world.

“There is no link between education and business,” says Maraitakis.

However, pundits agree that Greece is undergoing cultural change. A decade ago, Greek parents dreamed of their children becoming public servants - in highly paid, secure government jobs with perks. The perception of entrepreneurs was “very bad”, says Papazoglou. “Politicians would get very uncomfortable when talking about companies making profit. That is now changing.”

But Maraitakis warns that it’s too early to pin the hopes of the entire Greek economy on start-ups. “There are companies doing fantastic things that would have been impossible five years ago, but we can’t revive the economy on our own,” he says.

“It is superbly encouraging to meet hundreds of new faces at every start-up event,” says Incrediblue’s Fiorakis. “It is definitely a boom and an entire cultural change around Greek entrepreneurship. Young Greeks are not like the old economy. We are doers, ambitious, fair, ethical and we are visionaries.”

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