Just last week, we attended the SIM conference in Porto, which featured 3,500 participants, over 400 startups, and more than 230 investors. As the second-largest tech event after WebSummit in Portugal, it showcased an ecosystem brimming with innovation.
Just look at the numbers. Portugal now hosts 4,719 startups, marking a 16% increase from 2023. These companies generate €2.6 billion in turnover, €1.5 million in exports, and provide over 26,000 jobs. Two-thirds of these startups emerged in the last five years, demonstrating the ecosystem’s rapid growth.
Interestingly enough, investors often compare Portugal to Finland. Sean Seton-Rogers, Partner at PROfounders Capital, draws an intriguing parallel: “Our second investment in 2011 was in Finland, which became our best investment ever. We now see Portugal as an underappreciated market with immense potential.”
The funding crunch and why companies scale globally
Portugal’s startup funding landscape has experienced dramatic shifts over the past five years. From a modest €347 million in 2020, funding soared to €1.5 billion in 2021, driven by late-stage deals and post-pandemic optimism. However, the surge proved temporary. Investments dropped to €845 million in 2022 and plummeted to €205 million in 2023, as economic uncertainty and tighter monetary policies dampened investor enthusiasm.
Yet early-stage funding has shown resilience. While mega-rounds and Series C deals virtually disappeared in 2023, seed and Series A rounds remained strong. Investors, though wary of scale-ups during turbulent times, continue backing promising early-stage ventures. The market began recovering in 2024, with funding reaching €463 million, bolstered by Series A and B activity and Powerdot’s landmark €100 million investment.
Portugal’s entrepreneurial spirit continues to evolve. Inês Serrão, Portfolio Manager at Unicorn Factory Lisboa, observes that founders think beyond national borders: “They always have the vision that Portugal is not enough” — approaching business with a global mindset from day one.
However, Serrão points out a key funding challenge: “Most of the money raised in Portugal is related to SIFIDE, which is a fiscal incentive for R&D investment. SIFIDE is not a bottleneck but rather an incentive, especially for VC funds to be supported by EU sources”
Currently, Portugal’s funding landscape is characterised by limited local venture capital, strong seed and pre-seed investments, reliance on “public transit testing” initiatives and business angels, and concentrated activity in early-stage funding. “It’s been challenging for startups to raise without VC or SIFIDE funds,” Serrão notes, identifying a crucial bottleneck. Yet she maintains optimism: “There is an incentive for VCs to invest more and more.”
Why Portugal and why now?
Forward-thinking policies like the Startup Law support the ecosystem’s maturation. These laws offer attractive incentives, including a 14% tax rate on stock options. Portugal’s strategic location, which shares time zones with the UK and is close to the US, enhances its appeal.
The timing is perfect due to several converging factors: an expanding venture capital landscape, robust technical universities, and growing international visibility through events like Web Summit. The country combines a high quality of life and low living costs with a competitive business environment. The ecosystem’s global reach is evident — Unicorn Factory Lisboa alone hosts over 300 startups, of which less than 50% have international founders.
“Portugal is a remarkable country. Despite its economic challenges, it has incredible beauty. The people here are typically accomplished investors, entrepreneurs, and skilled remote workers. The startup scene is thriving, and the investor community is particularly robust,” says Oksana Kalashnikova, co-founder of Body Bloom AI.
The country shows particular promise in emerging technologies. Through dedicated innovation districts focusing on AI, web3, and other cutting-edge fields, Portugal creates specialised zones attracting talent and investment. The ecosystem’s progress is tangible. “With now eight unicorns in a small country, Portugal is showing the development of the ecosystem and positioning itself as an exciting frontier of European innovation,” notes Serrão.
Health tech takes centre stage at SIM – but why?
While smaller than the IT and AI sectors, Portugal’s health tech industry is vital to innovation. Health tech startups comprise 8.45% of Portugal’s 4,719 startups in 2024. Though niche, the sector shows significant growth potential in telemedicine, AI diagnostics, and digital therapeutics. For comparison, IT and communication generate 63% of startup revenues (€2.6 billion in 2024), highlighting IT’s dominance and health tech’s growth opportunities.
While health tech attracts less VC funding, momentum is building. Of Portugal’s €886 million total VC investment in 2024, AI startups claimed 37% of capital and 17% of deals. Health tech secured fewer mega-rounds but maintained steady early-stage activity, supported by specialised funds like Portugal Ventures (25 healthcare investments) and Biovance Capital (€51 million for biopharma). Sword Health‘s €29.2 million raise, though smaller than Powerdot‘s €100 million IT deal, signals growing investor confidence.
Health tech thrives in collaborative environments. Initiatives like HealthTech Lisboa and DigiHealthPT provide testing grounds for clinical validation, while AI partnerships foster innovation in predictive diagnostics, bridging Portugal’s fastest-growing tech sectors.
Beyond Lisbon and Porto
While Lisbon and Porto dominate the startup scene, Carlos Soares Lopes, CEO at Startup Madeira, explains how innovation reaches smaller regions: “We have startups that flew away from Lisbon and from Portugal to say Lydia, because of the strategic location. The area is where you can build anything you can in Portugal, but with a better quality of life.
On innovation diversity, Soares Lopes highlights their hub’s broad scope: “We have everything from social impact projects… to projects with AI, sports tech, agri tech, and food tech.”
Nirit Harel, CEO of Impact Portugal, presents another perspective: “Coimbra will emerge not only as a Portuguese Innovation Hub but as a significant player in the European market. We have an Instituto Pedro Nunes (IPN), the country’s number one incubator — top 10 in the world.” The city offers 40,000 students, lower business costs, specialised tech verticals, and the potential to produce “one or two unicorns a year.”
The strategy is clear: decentralise innovation, leverage regional strengths, and create attractive alternatives beyond traditional tech hubs.”Every place has something very different to offer,” Harel concludes, capturing Portugal’s diverse innovation landscape.
And now the key question – what about diversity?
Portugal’s startup industry shows progress in diversity, though significant gaps persist, especially in gender representation and leadership. In 2023, women founded about 22% of startups in Portugal, placing the country at or slightly above European averages.
Neide Vieira, co-founder and COO of IPLEXMED, reflects: “It’s a male-dominated area. We know about that, but I think things are changing. I don’t think they will ever be equal… maybe in centuries, I won’t see it for sure. But I think things are improving for women, and even male investors are starting to invest more in female founders.”
Women constitute 51% of Portugal’s scientific community, one of the EU’s highest proportions, indicating strong potential for female talent in innovation. While women remain underrepresented in startup leadership and founding roles, ongoing initiatives through government programs, accelerators, and investor focus aim to improve gender diversity.
Antonio Dias Martins, Executive Director at Startup Portugal, addresses diversity: “In the startup world, women founders make up only about 15 to 20% of the total founders. That’s why we have a program in Startup Portugal that handles social responsibility and diversity. In the programs where we have direct responsibility for management, we ensure that we have diverse teams and startups that take care of social responsibility. We are doing our part, but much work still needs to be done.”
Is Portugal really the next Finnish success story?
As Portugal’s health tech ecosystem matures, parallels with Finland become more compelling. Finland’s rise as a digital health leader resulted from deliberate strategy, strong government support, world-class infrastructure, and collaborative innovation. Finnish success rests on seamless cooperation between academia, industry, and public agencies, enhanced by advanced electronic health records and citizens’ willingness to participate in research.
Growing connections between the nations, such as Finnish health and sports startups collaborating with Portuguese counterparts at events like Smash Iberia, demonstrate a shared vision for cross-European innovation. If Portugal maintains momentum, deepens cross-sector collaboration, and adapts Finland’s strategic approach, it could emerge as Europe’s next health tech success story.
Portugal isn’t Finland yet, but its trajectory and ambition are evident. The coming years will reveal whether Portugal can fulfil this promise and join Europe’s health tech leaders.
