Infrastructure, talent, tax system, accessibility, lifestyle… Any of these can make the difference to a founder seeking a headquarters of Europe’s next big thing. Of course, the bustling metropoles like Berlin, London, and Amsterdam usually lead the surveys and reports. However, that doesn’t stop smaller players from joining the fierce competition. They are ambitious and eager to show that they can offer an alternative to expensive established business centers. These five countries that made into this year’s Startup Heatmap Europe list are racing to become some of the hottest European startup hubs.
Estonia
The country’s capital Tallinn took a fantastic 9th spot in the Startup Heatmap Europe list. After all, it’s becoming one of Europe’s most attractive startup cities with seven unicorns founded by Estonians and/or based in Estonia. Among them are Skype, Bolt, or Wise.com, and a total of more than 1100 startups operate here. Despite the pandemic, the companies managed to reach a 43% higher turnover than the previous year. All in all, not too shabby for a country with a population of a mere 1.3 million.
What makes the tiny country one of Europe’s top emerging startup hubs? Tech-savvy citizens and government, zero corporate income tax and lack of bureaucracy, and high quality of living as well as beautiful nature sure do help.
Ukraine
The post-soviet state is fueling its growth by encouraging the population to pursue tech. It pays off: according to Kyiv Post, Ukraine has over 212,000 tech specialists. That’s 11% of the country’s 1.9 million individual entrepreneurs.
The report claims that the tech industry is booming, securing over $5 billion in exports and generating nearly $588 million in taxes. That’s substantial growth, especially in pandemic times. Besides nourishing its tech talent, the country is exploring solutions that sweeten the deal for entrepreneurs considering Ukraine as their base. Kyiv appears on the Startup Heatmap Europe list at no. 49.
Cyprus
Located at the intersection of Europe, Africa, and Asia, Cyprus is the go-to choice for founders who need a convenient, modern business base. With pleasant weather, beautiful beaches, and high quality of life, it’s also a good place to live.
The capital Nicosia climbed to no. 31 in the Startup Heatmap Europe list. That reflects the country’s effort to become one of European startup hubs, with a non-profit association, Tech Island, recently launching to support this goal.
Cyprus motivates skilled entrepreneurs with a transparent, simple regulatory, tax, and legal system, an impressive talent pool, access to funding, and prioritizing digital transformation.
Companies based in Cyprus have leveraged this to the fullest, and some have achieved significant milestones throughout the last year. Odyssey, with an office in Nicosia, was just included in the Gartner 2021 Magic Quadrant. Online course marketplace LearnWorlds has managed to raise $32 million. And Nexters Global, the mobile game Hero Wars owner, is about to go public through a deal that values the company at $1.9 billion.
Romania
When Startup Heatmap Europe surveyed CEE founders about the best place to run a business, the first two spots were quite obvious. Unsurprisingly, it was Berlin and London, respectively. But a seemingly unlikely capital took the third spot: Bucharest. Those who have been paying attention know that the country is doing exceptionally well, which is why it also ranked 19th in the overall list.
A report from How to Web concludes that the Romanian startup ecosystem has prospered even during the pandemic. It got through 2020 with all-time highs in terms of transactions, capital invested, and local capital engaged.
TechCrunch recently analyzed the magic formula that drives the growth and talked to local investors, including Cristian Munteanu, Managing partner at Early Game Ventures. According to him, Romania defies expectations despite its very young startup ecosystem, with the first local VC funds established only three years ago. “And yet, Romania is home to three unicorns and many other promising startups. The large technical talent pool, the widely spread broadband access, and the low costs of doing business and living turn Romania into a market to keep an eye on,” he said.
Poland
Robert Krajewski, CEO of Warsaw-based Ideamotive, believes that Poland is an ideal country for IT outsourcing. He made his case in Forbes, highlighting the areas Poland excels in. One of them is IT talent: the country has a massive pool of over 430.000 IT professionals. It’s also relatively easy to run a business in Poland, where more than 3,000 startups and 130 VCs operate. No wonder that Warsaw appears on number 16 on Startup Heatmap Europe’s list. With Gdansk following at #22, Poland is quickly becoming one of the most significant Central European startup hubs.
