Near a former red-light district around Lisbon’s old Cais do Sodre docks, young entrepreneurs are trying to leave depressing economic times behind and turn Portugal’s capital into a hive for tech startups.
When the government offered to co-finance startups this summer, venture capitalists pledged over 500 million euros ($550 million).
According to Eurostat figures, the estimated hourly labor cost in Portugal in 2015 was 13.2 euros, compared with a European Union average of 25 euros, and an average of 32.2 euros in Germany.
Although Prime Lisbon prices are only a little lower than the 22 euros in Berlin, startups are avoiding the center in favor of cheap, former industrial neighborhoods along the Tagus River.
This is starting to show up in official data such as new company registrations in Portugal, which rose sharply to 35,555 last year from 29,216 in 2012 .
A Microsoft-backed study identified 40 Portuguese “scaleups” – companies that have raised at least 1 million euros in funding – over the past five years.
They raised a total of 166 million euros, although this is far behind neighboring Spain which had 106 scaleups that raised $1.6 billion and Germany’s 208 companies that attracted $6.6 billion in investment.