Startup Hotspot Austria
Dynamic founder scene
Whether one thinks of Prescreen, mySugr, runtastic or ViraTerapeutic, one thing is clear: Austria has spawned numerous, internationally well-known flagships in the startup community. The Austrian Startup Monitor (ASM) concluded that 1,534 startups were founded between the years 2004 and 2017. The startup scene is maturing, primarily thanks to a pronounced funding and investment landscape. The interest in acquiring stakes in start-ups and financing ventures through risk capital is continually increasing, both with respect to investors as well as to founders.
In 2017 alone, the barometer compiled of the auditing and consulting company counted investments of EUR 138 million in Austrian startups, four times higher than in the previous year. The sector also displayed a lively development in the first half of 2018. The number of financing transactions rose from 17 to 28. In particular, investments of EUR 41 million in the Viennese travel startup Tourradar strongly contributed to this increase. The second highest round of financing at EUR 25 million was for the Carinthian video streaming startup Bitmovin.
"Land of Founders" strategy: promoting innovation and financing
Apparently, the targeted measures designed by the Austrian government to support the domestic startup community have taken effect. The “Land of Founders” strategy was already launched back in 2015. It comprises a specific approach consisting of some 40 individual measures. The goal is to optimize the business environment for start-ups by 2020 and promote innovation and financing. It should also be easier for startups to attract growth capital. In the middle of June 2018, the Council of Ministers approved an amendment to The Alternative Financing Act enabling a larger number of companies to gain access to crowdfunding.
In particular, the changes represent a welcome step forward because crowdfunding is becoming increasingly important to company founders. Only five percent of the entrepreneurs took advantage of this form of financing in 2016, but the proportion already increased to ten percent in 2018, according to ASM. The support provided by business angels (33 percent), incubators (19 percent) and venture capitalists is even more popular. Above all, it is Speedinvest which is making a major contribution as the most important startup financer in Austria. In the meantime, Speedinvest now offer several funds for various verticals. For example, Speedinvest recently started making funding ranging from EUR 100,000 and EUR 2 million available to European industrial startups in the early phase of their development.
The fact that financing is the key to success in launching a startup has also led the government to provide direct assistance. For example, the Austrian Research Promotion Agency FFG and Austria Wirtschaftsservice GmbH (AWS) offer valuable support on the basis of specific programs and startup funds. After all, public funding and support is the most important source of financing for 55 percent of all domestic startups in Austria.
Accordingly, it is not surprising that an increasing number of startups are selecting Austria as their founding location. In addition to a matured financing landscape, the optimal conditions, from direct funding and the 14 percent research tax credit to the comprehensive funding offering and the country’s location in the heart of Europe, make Austria a safe haven for founders and investors. This not only pays off in its strong competitiveness, but also makes Austria one of the top European startup countries.