Why we are investing in the East Mediterranean

At Starttech Ventures we have a firm belief in the amazing investment opportunities available in the East Mediterranean.

Why we are investing in the East Mediterranean

Our reasoning is simple. In 2017, cities like Athens, Nicosia, Beirut, Cairo and Tunis, but also Sofia, Belgrade and Istanbul are bona fide hubs of entrepreneurial talent.

Why is this? First of all, history plays a role (as it usually tends to). Throughout the centuries, people from the broader ‘Levant’ area have been famous for their notorious commercial skills. Our first-hand experience suggests that this is definitely still true (we have all heard of Aristotle Onassis, right?).

East Mediterranean = great startup investment opportunities

Moreover, despite (or, perhaps, because of) the economic and political instability in this region, its people greatly values education. This has resulted in developing numerous top-level scientists and engineers (for instance, you may have heard of Mohamed El Baradei of Egypt, who served for twelve years, 1997–2009, as the Director General of the International Atomic Energy Agency).

Last but not least, exactly because of the economic, political and societal conditions in the region, people (especially its youth), have a very strong entrepreneurial drive. More importantly, this drive is often a means to change their own lives, as well as the lives of their loved ones. We have seen this first-hand in Greece, which now has a blossoming startup ecosystem born out of the financial crisis.

The lean alternative investment choice

As I mentioned, the key cities in the East Mediterranean region are becoming talent hubs. This is because they are home to exceptional founders who, which may surprise many, are able to find the optimal conditions to develop their businesses in Athens – rather than their home or alternative mainstream European cities such as London, Paris or Berlin.

Why? For a number of reasons. Firstly, investment capital has – and will be – available in abundance in Athens. This is thanks to a number of developments, the most important for the near future being the huge EquiFund program by the European Investment Fund (EIF) which comes into play in 2018.

Success needs more than hard cash

But it’s not only about the money. Because, contrary to popular belief over in Silicon Valley and also on this side of the water, money can really only get you so far. So what else is there? Athens’ very competitive cost structure is extremely attractive for a start.

Add to this the fact that the general cultural, societal and urban environment is much friendlier and more familiar versus the alternative choices, you have a winning combination. Athens continues to prove itself as a blossoming entrepreneurial ecosystem. The two largest exits in Greek startup history, that of Taxibeat by Intelligent Apps of the German Daimler Group for 40.48 million EUR, and Innoetics by Samsung for an estimated 30-40 million EUR, took place in 2017. Momentum is building.

It is true of course that the marketing skills, especially in modern digital marketing and growth strategies, are generally weak. It’s a similar situation with the now-dominant methodologies around customer development, lean and agile. These methods are not widespread – yet. And this is, however, a gap which we at Starttech Ventures cover with our Lean Acceleration Program.

It’s time to amplify

Being a private pre-seed investor focusing specifically on Greece and the East Mediterranean region, this has long been the Starttech Ventures strategy. As well as homegrown startups, we’ve invested previously in Israeli and Cypriot startups, for example. And now is a great time to amplify our activity. There has never been a better time actually.

This is why why we are launching an extra effort to create an institutional investments arm. In order to augment this activity to the benefit of all involved parties. And by all parties I mean everyone. From founders and co-investors to society at large, as well as our own interests.

The idea is simple:

  • Find and source the top founders from the East Mediterranean hubs
  • Select those who have an international mindset, strong culture of cooperation and who develop software products or services commercially targeting North America and North / Western Europe
  • Relocate them to Athens and guide them through the Starttech Ventures unique long-term acceleration program, which typically lasts between 18-24 months
  • Keep investing in them as needed
  • Raise follow on rounds and/or pursue M&A opportunities with investors and strategic partners from the key target commercial markets of these businesses  – that is primarily North America and secondarily North/Western Europe.

Come along for the ride

We believe the Eastern Mediterranean is a place where young entrepreneurs see problem solving as an opportunity to create a business. And this is at the heart of our own strategy. We identify innovative ideas with high growth potential. As you’d find, we don’t just incubate or accelerate; we aim to take advantage of exceptional investment opportunities and build amazing businesses that bring real world value, as well as return on investment. And above all, we operate with capital efficiency top of mind.

If after reading this you feel it’s something aligned with your own strategy, then why not reach out to us? We’re always happy to hear from interested parties to join us. Just send us a note here. Believe me, it’s going to be an exciting ride.

Why we are investing in the East Mediterranean was last modified: September 19th, 2018 by Dimitris Tsingos
Dimitris Tsingos

Dimitris Tsingos

The Starttech Ventures Founder. Tech entrepreneur. Passionate European federalist. Dimitris has been the President of YES for Europe - European Confederation of Young Entrepreneurs [2011-15], the Founder of the Hellenic Start-up Association [2011], Board Member at EBAN - The European Business Angel Network [2014-17], 40-under-40 European Young Leader [2012-13], Marshall Memorial Fellow [2018] and a Fellow of IHEIE/PSL [2019].