The startup ecosystems in Central and Eastern Europe are gaining momentum as more founders are motivated to build startups and raise money to scale their businesses. Greece proved to be the underdog who is ramping up, attracting more than 1B EUR in funding in 2021.

We wanted to take a closer look at this well-known travel destination - though quite often overlooked as a startup hub - with the help of Stergios Anastasiadis, an international angel investor and General Partner at Genesis Ventures.

The Greek recipe for success

We have started the conversation by picking Stergios’ brain to find out his perspective on what made local founders achieve success in the previous period and what can we learn from it.

Here are his thoughts:

“Our new wave of potential unicorns is coming from founders with a deep passion for the domain they are working in and for which they have learned to overcome specific difficulties during the past two pandemic years.

What is evident is that these Greek founders have become quickly #1 in the Greek market and now are growing their business beyond the local market, or their plan is to achieve this. It’s also nice to see founders thinking about building their business at a global level from day one.

So, it all boils down to strong founder principles, executing fast, product-market fit, and growing the business beyond the local borders. These are the characteristics of the startups I’ve been looking at as a GP with Genesis Ventures.“

It’s easy to let fear and uncertainty paralyze you when you don’t know what to do next. Stergios advises testing things out, pivoting, and finding resourceful ways to make it work. It’s important also to surround yourself with people who know the industry better than you:

“Pivoting is another thing that has become key to success in a world filled with uncertainty. They are also surrounding themselves with highly talented people.

Greek founders are looking for ways to bring in smarter people than they are, people who know how to market and commercialize beyond the local borders. They have hired or are hiring the best individuals for engineering, sales, and marketing, to power up their success.

And of course, there are the folks returning back to Greece, like myself after 37 years in Canada and my partner in Genesis Ventures Dimitris Maroulis after 20 years in Singapore.”

The local investment ecosystem has matured

Today, like many other Central and Eastern European countries, Greece has a strong pool of opportunities to tap into. Stergios gives us a short overview of how the investment landscape has changed, where it is now, and which are the strongest industry sectors to follow.

“Deep Tech really characterizes the strong showing lately, like Ansys, Softomotive, Think Silicon, Innoetics, Lenses, Accusonus, to name a few. Others with large follow-on rounds like Blueground, Flexcar, Learnwords, Netdata, Hackthebox, Causaly, Intelligensia, and Spotawheel. We increasingly see large multinational tech leaders heavily investing in R&D (Pfizer, Microsoft, AWS, Facebook, Samsung) and performing M&A in Greece like Viva or Instashop.

These startups have pushed the envelope of growth and, through the support of the local VC funding landscape, have grown significantly."

Startups are not the only ones experiencing these growing trends. Investors and venture capital funds are now surrounded by a more mature community with stronger assets to build on.

“The venture capital companies that we have in Greece have already raised a second or a third fund, thus contributing to the ecosystem growth with higher expertise than before. Their maturity is visible in the new deals they close and in the way they work with the founders. The system is slowly building up and generating some good models to follow.

I think there is good coverage of capital in the country right now, including in the pre-seed stage with Genesis Ventures, and that's expanding more and more. People have the best environment to start a business right now, and founders have many opportunities to replace what’s not working with new and better options or ideas.”

Top industries Stergios and Genesis Ventures invested in

Having a diversified portfolio can be a tricky challenge for many investors, especially when not sure where to direct your money. Stergios has been kind enough to share his personal strategy for investment diversification and how this strategy has helped him achieve great results as an angel investor.

“I always look for ways to diversify my investment portfolio, and I allocate 20% of my investable budget to entering new markets as an angel investor. I do this because I want to understand how the market is moving, what founders are there, what problems they are trying to solve, and what can I learn from it.

Having a focus and testing the market in small steps and not staying open-ended and completely sector-agnostic is what proved to work for my personal investments portfolio.”

To avoid risks, investors should learn more from others about how to protect their portfolios. A good collaboration is what makes the community grow even stronger and more united.

“For the same diversification purposes, I would encourage everyone to take a similar approach, reducing the potential risks and keeping the process under control.

A few sectors I have approached this way were EdTech, GreenTech and Agritech, and it helped me tremendously to be connected with the local ecosystem. If you don’t live in the community you want to invest in, I advise you to at least visit them often: go to local events and connect with other investors and VC funds.

Genesis Ventures, though is sector-agnostic, thus giving the angels that are part of the community the chance to view a wide range of options.”

The impact of Covid-19 and the war in Ukraine on local startups and investments

Working from home and adapting to a new reality taught many of us different lessons. Startup founders had to learn new ways to scale their business in this new status quo, which was quite difficult. Some have made it through, some have not.

Stergios has shared with us what was proved to work for the founders based in Greece:

“One of the biggest challenges for existing startups and founders was to get through these two years and find new ways to generate growth.

Their new focus has been to come out with a stronger geo expansion, better onboarding, and new processes for remote employees. The successful cases are those that have found opportunities to keep investing in their people & products and keep everything stable until the market becomes available again.

I think pivoting and continuous product improvements have been the key to taking advantage of “downtime”.“

After two pandemic years, everything has started to go back to normal or find its new way of functioning under the new rules. The new year has even started with a series of good predictions for the local ecosystem.

However, the Russian invasion of Ukraine has brought a new type of uncertain times for everyone. We have tried to understand how this has impacted the startup ecosystem in Greece and how investors could protect their portfolios in the upcoming period.

“If we are looking at the impact generated by the war in Ukraine, or the recent market slows down, for us as investors, we can see that capital commitments are becoming less frequent or intense compared to last year.

I think it’s a natural process that makes us analyze the investment decisions even more carefully to avoid risks we haven’t previously even thought of.

Hopefully, this will not continue for much longer, specifically the impact on local startups and the growth of our ecosystem. I think everything is still not settled yet, and that we’ll have to follow what’s happening in the upcoming months.”

Investing in Greece-based startups: top recommendations

Before parting ways with Stergios, he has summarized what matters most when you are looking to get into your first cross-border investment deal:

“As individual investors, it can be pretty difficult to spot a great deal, especially when you are stepping outside your homeland.

My recommendation for an angel investor looking to invest in our local startups is to pick an industry they are familiar with and maybe create a mini syndicate of a few like-minded angel investors or enter through an angel investment platform like Genesis Ventures.

This way, it is easier to assess a founder, their background, and what they have achieved when you know the sector and you have a few people to share ideas with. Genesis Ventures is putting together a 101 angel investor workshop, so stay tuned! “