Greek start-ups booming

2014 should be a good year for Greece and its economy. All signs point to a recovery - for the first time in six years, economic productivity is expected to grow, tourism is gaining the upper hand, and exports are on the rise.

It may not be a key indicator of the recovery and restructure of the Greek economy, but the sheer number of business start-ups to have emerged in the past few years, especially in the IT sector, is a significant sign of improvement. Start-ups seem to be springing up like mushrooms, even if experience shows nine out of 10 don't usually survive past the initial launch phase.

Recently, however, several new companies have had success not only establishing themselves in the Greek market, but internationally as well. One example is Taxibeat, a smartphone app that lets users contact taxis in their area and choose drivers based on ratings from other passengers. The free app is being used beyond Athens and Thessaloniki, in cities like Rio de Janeiro, São Paolo, Mexico City, Oslo, Bucharest and Paris.

An upside to the crisis

Even before the crisis took hold in 2010, business networks made up of risk-taking entrepreneurs, potential investors, events and websites had been developed in Greece, paving the way for many start-ups. Open Coffee is one of the pioneers who helped build these networks. Via opencoffee.gr they organize informal meetings for young entrepreneurs, businessmen and investors to get together and share their knowledge and ideas.

Panayiotis Vrionis, a key player in kickstarting this process, said a lot has happened since opencoffee.gr was founded in 2007.

"Now there are more funding opportunities for new entrepreneurs than before," he told DW.

Today there are four financing funds, supported in part by Jeremie, an EU program to assist small enterprises. "Now, in Greece, there are also more investors who are willing to take risks in financing new start-ups," he said. The young entrepreneur acknowledges that some positives have come out of the crisis.

During a crisis, inanciers tend to avoid what were previously thought to be secure investments, like shares in Greek banks or government bonds. Instead, said Vrionis, they're more willing to take a chance on innovative start-ups.

Too many start-ups, not enough capital

Openfund, one of the four funds offering assistance to Greek start-ups, is itself a start-up. Its second fund has nearly 12 million euros ($16 million) at its disposal.

Co-founder Giorgos Tziralis says there's been an explosion in requests for funding. "When we launched Openfund II in 2011, our goal was to have a funding pot of 5 million euros. We thought a higher amount was unnecessary." But a lot has changed since then.

Today the fund has 11.7 million euros and supports 10 projects with a total of 2.5 million euros. But that's still not enough, because demand far exceeds the supply of capital. But at the same time, that's helped improve the quality of the applications, Tziralis said.

Red tape

Spiros Majátis is co-founder of the start-up Workable. His recruitment software helps companies analyze applications of potential employees. The company was founded in early 2012 and now has customers in some 30 countries. Majátis believes bureaucracy is still the biggest obstacle threatening Greek start-ups from thriving.

"A lot still needs to be done to streamline the structure of the whole system, especially with the banks," he said.

Openfund II co-founder Giorgos Tziralis is a little more confident. His advice to entrepreneurs, especially those just starting out, would be to have a little patience with Greece at this time of transition. He knows the state can be more of a hindrance than a help, but a lot has been done over the past few years, he adds, referring to the simplified process for launching a start-up.

Tziralis addd that one can even consider Openfund as part of the state, since it s funded by the government and EU-funds, he said. His suggestion for entrepreneurs?

Have patience until the cumbersome state machinery finally kicks into gear.