Detailed presentation at the bottom of the page.
2020 in review
- top #12 ecosystem in Europe
- 146 financing rounds
- €365M invested
- €130M raised by early stage investors, ~€200M dry powder to invest
1. Yearly and quarterly activity
In 2020, €365M were invested in 146 different rounds. Comparing with other European countries, Portugal is the #12 largest startup ecosystem in Europe.
€256M were raised by Portuguese startups with HQ outside of Portugal (Remote, Talkdesk, DefinedCrowd, etc. mostly companies with HQ in the USA). The remaining, €109M, was raised by startups with HQ in Portugal, ~50% in Lisbon and >20% in Porto.
As I have only started to track data this year, I don’t have data for previous years to compare the evolution.
By comparing against different data source – The State of European Tech which only has data for startups with HQ in its home country – Portuguese startup funding activity reduced by -26% vs. 2019 (€148M).
But I don’t believe that there was a reduction in the market. The main reason for the underperformance was that, unlike 2020, in 2019 the largest rounds were from startups with HQ in Portugal e.g., Unbabel.
In terms of the largest rounds, Talkdesk raised the largest round (€127M), accounting for 35% of the money raised. There were other 5 rounds above €10M, including 2 from Remote (Seed €10M and Series A €30M). This ranking doesn’t include rounds that the amount was not yet announced including DashDash, Sensei, Lovys, etc.
On a quarterly basis, the number of rounds steadily increased each quarter, reaching rounds 45 in Q4 (quarter in which Casa do impacto announced 10 investments). In terms of investments Q3 was the highest mostly due to Talkdesk round.
2. Yearly and quarterly activity
From the 146 rounds, more than half were pre-seed rounds, 32% were Seed rounds and 10% Series A. 3 rounds were series B/C or beyond.
In terms of money invested, pre-seed represented 3%, Seed 14%, Series A 27%, and remaining Series B/C and beyond.
The second half of the year was the busiest for both pre-seed and pos-seed, as several large rounds – Talkdesk, Bizay/360imprimir, Remote Series A, etc. – Indico accelerator batch, and Casa do Impacto investments were announced.
For Seed, Q2 was the busiest as several startups raised bridge rounds to extend their runway and to survive to “Covid19”. Also in Q2, Remote raised the €10M Seed round.
In comparison to European peers, median round sizes are 22% and 11% lower for Series A and Seed.
In 2020 for Portuguese startups, Series A was around €3.7M (bottom quartile) – €8.8M (top quartile), with the median €4.5M. The average is larger, ~€7.7M, mostly due to the sizeable Series A raised by Remote – €30M. Remote was the only startup to go from Seed to Series A in the period, just after 7 months of raising a Seed round.
Seed rounds varied around €389k (bottom quartile) and €1.3M (top quartile), with a median of €935k. The average was also higher than the median due to Remote’s €10M Seed round. The gap between median and bottom quartile is particularly large, as this year several seed bridge rounds existed.
Pre-seed rounds varied between €56k and 156k€, with the median €100k.
3. Most invested themes
Marketplaces and SaaS were the most 2 common business models invested.
Artificial intelligence was the used technology, on startups invested. During the 2nd half of the year, Health care and Impact startups had a positive trend.
Seed startups in HRTech (Remote and Coverflex) and Health care (Zenklub, Knok, etc.) had the largest round size. While marketplaces, AR/VR and SaaS had the lowest.
For pre-seed, Energy startups benefited from the highest round size. The remaining themes varied between €125k and – 90k€.
4. Team and diversity
At the month of announcing the round, Pre-Seed, Seed and Series A startups had 4, 14 and 47 people.
Female and international founders represented 21% of the startups backed in 2020.
In terms of stages, the higher the stage the more likely is for a startup to have an international founder.
While for female entrepreneurs, pre-seed startups have the highest number. I like to see it from the positive side: more startups are being started by female entrepreneurs.
5. Most active investors
From the 146 rounds, 36% of the rounds had a Portuguese Business Angel or a syndicate of Angels. Business Angels were particularly relevant on pre-seed (accounting for >40% of the rounds). Olisipo Way (11 investments), Core Angels (10, of which 3 international investments) and Finy Ventures (6), were the most active Angel syndicates.
Public investors, State own funds (Portugal Ventures or FIS), and 200M program participated in 26% and 7% of the rounds. Portugal Ventures was the most active investor in 2020 and was particularly active in seed and post-seed. 200M and FIS were also among the main investors at Post-seed and Seed.
Corporate VCs represented 5% of the rounds, being Semapa Next and Edp Ventures the most active.
International investors represented 27% of the rounds, almost 80% of the post-Seed rounds. In 2020, 39 rounds had participation from international investors, being Techstars the most active with 6 investments, 4 of which were part of Techstars in Lisbon program.
In addition, Sequoia invested for the first time in a Portuguese startup (Remote). Also other top funds such as Accel, Lakestar, and Cherry (DashDash/Rows), Index Ventures (Remote), and Founders Fund (Sword Health) invested in 2020 in Portuguese startups.
Finally, Portuguese Venture Capital funds represented 31% of the round and were particularly active in Seed and Post-Seed. LC Ventures was the second most active investor, right after Portugal Ventures, investing particularly in Seed stages – though only invested in the first half of the year. LC Ventures round median round size was €375k.
Indico was the 3rd most active investor in 2020, investing particularly in Pre-Seed, with a median round size of €100k. Indico was also among the most active investors in Series A.
Casa do Impacto was the most active pre-seed investor, though was the investor with the smallest median round size. 200M and HCapital had the largest median round sizes, with over >€3M.
In terms of themes, Portugal Ventures and Indico were the most active in Marketplaces, and SaaS. Portugal Ventures, Bright Pixel and LC Ventures are the most active investors for Artificial Intelligence startups.
Furthermore, Vega Ventures was the most active in energy and Portugal Ventures in Tourism. Finally, Casa do Impacto and FIS were the main investor for Portuguese based Impact startups (to highlight that Mustard Seed Maze also invests in Impact startups).
Finally, Portuguese investors also invested abroad, >30% in Spain and 20% in USA. Most active investors abroad were EDP Ventures, Semapa Next, Mustard Seed Maze, and Sonae IM.
6. New and active early stage funds
In 2020, 14 funds raised over €130M.
Versus 2019, there were -29% capital raised, though more funds raising funds. Both Armilar and Indico, raised last year and this year.
The amount raised in 2020, didn’t compensated the money raised in the previous years, particularly for IFD funds. And as such I estimated a lower dry powder in the market (~€200M).
2020 report
See also