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Economy

Mitsotakis Moves Putting Greece on World Business Startups Map

February 11, 2022

ATHENS – With Greece set to pull back COVID-19 health restrictions more and turning its attention toward accelerating an economic recovery, foreign investor interest is turning keener, especially in technology-driven fields.

That’s paying dividends for Prime Minister Kyriakos Mitsotakis reaching out to them, and business deals tying Greek startups and companies to major international players seeing big opportunities coming.

In a feature, the Reuters news agency reported on Greece is becoming an investor lure, citing JP Morgan’s acquisition of a minority stake in the financial tech services Viva Wallet, a $2 billion value.

That’s expected to be followed up by Facebook owner Meta’s acquisition of Accusonus, a startup founded by a pair of engineers and amateur musicians whose audio software is used by the likes of Bob Dylan and Shakira, the report noted.

Reuters, citing a person familiar with negotiations, who was not named and the newspaper Kathimerini reported there were advanced talks on the purchase of Accusonos that develops software for music production and performance and audio repair.

The company was started by Alexandros Tsilfidis, Elias Kokkinis and Michael Tzannes, and has as shareholders Big Pi Ventures, co-founded by Marco Veremis, whose enterprise value is between 70-100 million euros ($79-113 million) said Kathimerini. It has offices in Athens and Patras and based in Lexington, Mass.

Funding for Greece-based tech startups jumped to almost $1 billion in the second year of the pandemic in 2021, said a report by Marathon Venture Capital, more than double in 2020 and nearly 10 times that raised in 2015, when Greece was on the edge of bankruptcy and almost leaving the Eurozone.

The deals, said Reuters, have bolstered Mitsotakis’ New Democracy government that’s taken hits over its handling of wildfires, a snowstorm and handling of the pandemic, mostly from the major opposition SYRIZA.

But the Leftists sniping hasn’t helped them in polls and Mitsotakis has made much of his rivals being notoriously unfriendly to business and foreign investors stymied under their 4 ½ year rule when Alexis Tsipras was premier.

Mitsotakis has help from the European Union and other funding measures directed at trying to make the economy rely on more than its stalwarts: tourism and the essentially tax-free shipping industry.

DIGITAL MEETS ABACUS

“Greece is not just a country that relies on tourism and its wonderful beaches,” he said as he toured Viva’s, adding the government was optimistic that technology would be an “increasing part” of the country’s GDP.

There are obstacles though, especially the slow Internet that has confounded users and been a source of complaint and could also deter more skilled digital nomads from making Greece their base.

The Hellenic Federation of Enterprises (SEV) has estimated the startup sector overall stands at 6 billion euros ($6.83 billion) or some 3 percent of the annual Gross Domestic Product (GDP) of 175.86 billion euros ($200.3 billion.)

The government wants that to hit 10 percent within the next 10 years, said Markos Markos Veremis, co-chair of the innovation committee, said, but for all those hopes and efforts Greece is still lagging in prime fields for investors.

That includes being near the bottom of the European Commission’s 2021 Digital Economy and Society Index, scoring low on connectivity, Internet use and digital public services, despite repeated promises for improvements.

What Greece has in abundance though is smarts, especially among young entrepreneurs who’ve been stifled for generations by a clientelist style that rewards the politically connected and hacks and not genius.

But the entrepreneurs are making their marks in a number of technological areas that has highlighted the country’s talent, after many fled to other countries during a devastating eight-year economic and austerity crisis.

“What started as an underground movement of small nerdy communities is now front and center in Greek society,” George Tziralis, partner at Athens-based Marathon, who sees technology growing to match shipping’s 7 percent contribution to the economy over the next few decades.

“There is a great deal of momentum for the burgeoning Greek economy and Greek startups ought to take advantage,” Makis Antypas, Viva Wallet’s co-founder and Chief Information Officer, also told the news agency.

Successful Greece-based startups now range from taxi-hailing app Beat, e-commerce platform Skroutz, and market research startup Pollfish.

Greece had “raised generations of people who dreamed of working in government, or declaring themselves successful entrepreneurs by squandering public money,” said Panos Zamanis, Vice-Chairman of the Hellenic Startups Association.

He added: “We are not yet in the position we deserve … but we must not forget that our country was slow to enter the map of innovation and suffered from a dramatic economic crisis.”

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