Startup ecosystems around the world

Global hubs such as Silicon Valley and London have long been the definition of startup landscape, but the world is changing rapidly, and other places are catching up as they go.

In the Netherlands, we all know that our own major cities such as Amsterdam and Rotterdam are exploding entrepreneurial scenes too, but what about the rest of the world? What are the places that have been buzzing with aspiring startuppers and innovation lately?

Singapore

This beautiful city-state located at the heart of Southeast Asia ranked #1st in the 2019 Global Competitiveness Report of the World Economic Forum. In this, Singapore scored particularly well on innovation ability, health, infrastructure, financial development, and labour market functionality.

Singapore’s local connectivity and competitive institutions, foster qualitative talent growth domestically, while the government does its bid by offering business tax reductions and exemption schemes, grants and business incubation, and solid execution infrastructure. Moreover, the government’s Startup SG initiative has already allocated $110 million on mentorship, startup capital, and venture building for ambitious entrepreneurs challenging COVID-19.

Singapore’s investments almost tripled since 2017, from $2.39 billion to $8.0 billion in 2019. In this, deep tech startups, urban solutions, healthcare, and advanced manufacturing have enjoyed particular momentum. As host to the biggest deep tech and Fintech festival in the world, SFF x SWITCH, it is not surprising that Singapore’s Fintech continues to grow significantly as well, with 2019’s $861 million being more than double of 2018’s investments.

Michele Ferrario explains that Singapore’s progressive regulations, a combination of foreign and local talent, and access to capital has fostered the growth of their startup StashAway, which now facilitates a digital platform to easily and effectively manage long-term wealth issues such as retirement and investment with.

Israel

Home to “the city that never sleeps,” Israel’s Tel Aviv functions as startup-capital and hub of the Middle East. Dubbed as “startup nation,” Israel has the most startups per capita in the world and leads the deep tech sector of the world. Israel’s limited natural resources have always fostered innovation for agriculture, water, and ICT, while its small domestic market makes it very internationally focused and fosters their curious and challenging mindset.

As a result of this global mindset, tech giants like Microsoft and Google support Israeli startups with acquisition and investment opportunities, while successful startuppers are in the habit of supporting new startups or becoming serial entrepreneurs themselves.

Interestingly, the Israeli military plays an important factor too, for it offers technological programs and rewards creative mindsets in order to stimulate post-service entrepreneurship. Israel’s Innovation Authority, on the other hand, hones their global startup imago by caring for their innovation infrastructure, financial support and grants, and startup policies and programs.

Due to increased foreign investments, startups in Israel got a record funding in 2019, with a total of $8.3 being a 30% increase over the year before. The biggest portion went into AI companies, but also Life Sciences, Fintech, and cybersecurity got significant amounts. Co-founder Lior Akavia of Seebo explains how their AI startup benefits from local talent to help manufacturers foresee and avoid production losses, which accordingly trickles AI investments down into sectors such as advanced manufacturing and digital health.

The Republic of Korea

Since the Korean War ended in 1953, this country’s economy has quickly developed in the 12th largest of the world. Well-known MNOs such as LG and Samsung acknowledge the need of startups to stimulate the South Korean economy, while the government’s Tech Incubator Program for Start-ups offers them government funding. Interestingly, these government funds are completely free of charge, which is a particularly effective approach for the risk aversive Korean culture – a stark contrast to the Silicon Valley culture that thrives on the “high-risk high reward” mentality.

In addition, the South Korean government established a dedicated Ministry of SMEs and Startups, which has led to 3.5 billion of funding in 2019 (a 25% increase compared to the year before), with commerce and ICT services being the primary beneficiaries. Founder Brandon Suh of Seoul-based Lunit, which develops AI for cancer diagnoses and treatments, explains that the strong government support was vital for their initial stages to bloom into the interconnected company that they are today.

Kenya

This country might still be registered as a developing country in your brain, but English speaking Kenya lies at the heart of Africa’s startup scene. With a global language, cutting-edge internet facilitation, and solid online payment infrastructure, Kenya offers a blossoming ecosystem for mobile-based business models. Furthermore, the Enterprise Kenya initiative enables startups to flourish and scale as they go, while the government works hard to realize their own Silicon Savannah.

Regardless of the lack of specific startup policies, Kenya’s investments of $564 million in 2019 are still a 62% increase compared to 2018. The main beneficiaries in Kenya were off-grid technologies, enterprise, and Fintech, but healthcare, connectivity, and commerce also received sizeable amounts.

A representative of Lori Systems’ tech-transportation service, Josh Sandler, explains that the Kenyan startup community and “relative ease of doing business” allows them and many other enterprises “to thrive.” Moreover, Kenyan support network “organizations such as Alter and Endeavor” provide key links to “international funding and mentorship,” which enables startups in Kenya to scale rapidly and effectively.

Brazil

With the only Latin American city in the top30 global startup ecosystems – São Paulo – and an economy ranking number #8 in the world, Brazil is currently a thriving startup environment. Home to 200+ million inhabitants, Brazilian startups cater to a huge domestic population while universities like the Federal University of Minas Gerais and the University of São Paulo supply the country with a steady pool of fresh talent.

Brazilian startups also benefit from many funding possibilities – both domestic and international – while the government’s Brazilian Digital Transformation Strategy has been working hard since 2018 to unify their innovation ecosystem. Fintech is Brazil’s largest growing industry, which is a consequence of the country’s young population, high internet and mobile use, and the new ruleset for open banking. Furthermore, both Brazil’s antiquated real estate and hiring processes are rapidly being innovated and automated by aspiring startups throughout the country.

CargoX is a marketplace in São Paulo that connects carriers to their loads throughout Latin America, which was able to grow rapidly through their access to highly skilled and affordable local engineers. São Paulo is unique in that it has top universities but also rather little engineering demand relative to other tech centres in the world. Brazilian engineering graduates, moreover, favour tech startups over the established corporations, which enables new companies to benefit from the latest knowledge and know-how without having to make huge investments.

Startup world of the future

With 2022 already ranking among the top of the weirdest and craziest years, we’re really curious how these hubs will cope with – and hopefully solve – the current pandemic, and what our startup world will look like next year.