According to the latest Mapping Portugal’s Startup Landscape 2024 report, compiled by IDC, Informa D&B, and Startup Portugal, the number of startups in Portugal grew by 16% over the past year, bringing the total to 4,719. This growth highlights the country’s flourishing business environment and its appeal to entrepreneurs, particularly in the Information Technology (IT) and communication sectors.

The surge in startups reflects Portugal's growing reputation as a fertile ground for innovation. Over the past five years, the number of startups has consistently increased, with a notable 16% growth from 2023 to 2024. This ongoing expansion underscores a supportive ecosystem that fosters new business creation. Portugal’s startup scene has grown significantly, particularly in the high-tech sectors, making it a standout player in the European landscape.

Startups in Portugal have an impressive economic impact. Collectively, they generated €2.6 billion in revenue in 2024, with €1.5 billion coming from exports. This performance is notably higher than the average for the broader Portuguese business landscape. More than 26,000 jobs have been created within this sector, contributing significantly to the country's economy. Notably, a third of these startups are export-oriented, which is three times the rate of the overall business fabric in Portugal.

The tech sector remains the dominant driver of Portugal's startup ecosystem, with 63% of all startups falling under Information and Communication Technology (ICT). High-tech services account for the largest share of revenues, employment, and exports within this category. These companies, which are often micro-enterprises with fewer than 10 employees, represent a dynamic and fast-growing part of the economy.

Between 2020 and 2023, the average annual growth rate for revenue in the startup sector was an impressive 30%, far outpacing the 14% growth in Portugal's overall business sector. Employment growth within startups also outperformed the national average, with a 19% increase in jobs compared to just 4% for the broader economy. This highlights not only the rapid expansion of the startup ecosystem but also its crucial role in job creation and innovation.

One of the standout characteristics of Portuguese startups is their international orientation. A full third of these companies are engaged in international markets, with exports accounting for 58% of their total revenue. This strong export performance is significantly higher than the national average, where only 11% of companies are exporters. The export focus of Portuguese startups plays a pivotal role in their growth and global competitiveness.

Portugal’s strategic location, favorable economic conditions, and access to EU funding have further solidified its position as an attractive destination for tech entrepreneurs looking to scale their businesses beyond national borders.

Portugal offers several key advantages to IT startups. The country’s highly skilled and competitive workforce, combined with relatively low labor costs compared to other European countries, makes it an appealing choice for startups. The average monthly salary in the sector is around €2,000, a figure that is 72% higher than the national average. Additionally, the country’s investment in infrastructure, particularly in Lisbon and Porto—where many startups are concentrated—ensures that businesses have access to the resources and networks needed to thrive.

Furthermore, Portugal’s commitment to creating a favorable environment for tech innovation is evident through various government initiatives, including tax incentives and support for startups in areas like R&D and sustainable technology. This focus on innovation has helped attract international investors, ensuring that Portugal remains at the forefront of Europe’s startup scene.

Looking ahead, Portugal’s startup ecosystem is poised for continued growth. With a strong focus on IT and technology, a rapidly expanding export market, and an increasingly supportive environment for innovation, Portugal is well on its way to becoming a leading European hub for startups. For entrepreneurs seeking to grow their businesses in an innovative, supportive environment, Portugal offers an ideal platform for success.

Author

Paulo Lopes is a multi-talent Portuguese citizen who made his Master of Economics in Switzerland and studied law at Lusófona in Lisbon - CEO of Casaiberia in Lisbon and Algarve.

Paulo Lopes