Austria, like germany, has a deftness for producing very specialised businesses usually less popular concealed champions which can be also worldwide frontrunners within their field, according to the agency charged with advertising investment in the country.
The austrian business department (aba) paints a shining image of your local start up scene which new companies, incubators, accelerators, co-working areas and new investment capital funds have emerged over modern times, attracting money from outdoors.
In 2019, start-ups attracted 218m in financial investment. specifically, scale-ups have been successful in attracting funding internationally, the aba states.
Nevertheless price of which start-ups are created in austria stays lower than that in similar countries in europe, and a brand new law geared towards managing international direct financial investment from non-eu countries, along with present red tape, has prompted problems that development has been stifled.
Start-ups are clustered at various points across the country, usually led by universities. you can find green tech and medtech hubs into the south state of styria, innsbruck targets quantum computing and alpine technology (centred on mountain and sports tourism), while linz houses many it businesses. significantly more than 50 per cent of start-ups are observed when you look at the capital, vienna.
Yet, whilst government guarantees to simplify the founding process, organization development remains considered bureaucratic and expensive in contrast to the uk, singapore or estonia, as an example. it can take a typical 21 days to join up a small business in austria compared to 4.5 days into the uk, in line with the world banks doing business report.
When create, however, businesses can access early-stage money reasonably quickly. creators can put on for subsidies and grants from government agencies, plus angel investors and incubators.
But this is simply not fundamentally beneficial to the development ecosystem, contends dejan jovicevic, leader of the austrian start up mag der brutkasten.
The abundance of early-stage capital is helpful to have off the ground, but might also lead to creators becoming more content in their journey, potentially reducing their drive, he claims.
Austrias many noteworthy exits consist of runtastic, a workout training software that has been offered to adidas for $239m in august 2015. in pharmaceutical sector, roche obtained diabetic issues administration system mysugr in summer 2017.
Digital bank n26 is just a limited austrian success story: its austrian founders relocated the business from vienna to berlin right after establishing it. now, as germanys most valuable fintech start-up, it's recently opened an office in vienna.
Hansi hansmann, a prominent austrian company angel investor writing in der brutkasten this present year, provided a damning decision of austrias start up ecosystem, incorporating the development competition was being lost not just to the united states and asia additionally european competitors.
Then when the austrian government launched a legislation in may controlling fdi from non-eu nations so that you can restrict the transfer of technology overseas, mr hansmann, which holds opportunities in about 40 start-ups in austria, commented: you cant actually be that stupid. we now have had the issue of securing follow-up financing for several years and also this will be made even more difficult.
Assets from away from bloc should be subject to an endorsement process that might take months. start-ups with fewer than 10 workers and yearly return of less than 2m should be exempted, however, many vcs and creators argue this is certainly insufficient and may deprive companies of essential international capital for later-stage development.
Successful austrian start-ups like n26 or kompany, a regulatory technology platform, seemed to asia and us for follow-up financing. based on vc firm atomicos 2019 state of european tech report, nine from 10 financing rounds over $100m included one or more united states or chinese trader.
Rudolf kinsky, president of the austrian private equity and investment capital organization (avco), states: we hardly ever have nationwide financing rounds beyond 2m-3m. austria needs money from outside of the eu for development and exits.
Not every person believes the brand new law will starve austrian companies of financial investment, but.
There is certainly money in austrias foundations and retirement resources which could be triggered to invest in start-ups, states laura egg, handling manager at austrian angel investors association. nonetheless, she reckons it might take years to produce this brand-new kind of funding.
Although the legislation may help maintain development at home, she adds, its introduction is badly timed. we must have controlled fdi previously. to take action today, throughout the covid crisis, cannot assist struggling start-ups.