In German-speaking countries, the word Stammtisch refers to the table of regular customers at the local inn. But, in the world of Austrian startups, that meaning has evolved: once a month, between 100 and 300 people come together to hear successful entrepreneurs tell their stories, discuss, exchange ideas and network at AustrianStartups’. Stammtisch.
“In the past, it was just a gathering of a few people who were starting out, but over time it has grown with a stage, speakers and discussion boards. [today]is the biggest monthly event on the Austrian startup scene,” says Markus Raunig, CEO of AustrianStartups, which describes itself as an umbrella community platform that aims to “make entrepreneurship as common as skiing.” in Austria”.
Founded in 2013, AustrianStartups has more than 1,000 members, including almost 80 backers ranging from national banks, law firms and angel investors to international companies such as IBM and Google. As much as Stammtischruns a variety of programs to educate entrepreneurs and even high school students on how to start and run their own businesses.
The expansion of AustrianStartups, from Vienna to all provinces, reflects the sector in the last decade, which has seen a proliferation of co-working spaces, incubators and mentors in the capital and across the country.
The results have been dramatic. In 2021, start-ups in Austria received a record €1.23 billion in private investment, five times the €262 million in 2020 (a record year, despite the Covid pandemic), according to the Start-up- Barometer Österreich, published by professional services firm EY.
Florian Haas, the author, notes that more than half of the 2021 figure relates to deals involving just two companies: Bitpanda (a fintech investment platform) and GoStudent (an education platform that connects students with tutors). ), which together represented 652 million euros. Still, with the average size of deals increasing from €4.5 million to around €12 million, he says this “financing boom” means that “Austria is knocking on the door of the top 10 in europe — both in terms of number of funding rounds and volume.”
In addition, the range of sectors in which start-ups received investment is wide, led by software and analytics, e-commerce and healthcare companies.
One factor driving this growth has been the enthusiasm of Austrian governments, regardless of political color, to finance start-ups through the Austrian Research Promotion Agency (FFG) and the Austrian Promotion Bank (AWS).
“In the recent past, there have been big developments, a lot of specific programs,” says Philipp Aiginger-Evangelisti, FFG’s director of design and innovation, general programs. “There’s a lot of understanding about what start-ups need that wasn’t there 12 years ago.”
FFG, which does not take equity in lieu of funding, distributed €78.5 million in grants and non-repayable loans to start-ups in Austria last year, double the €38.7 million allocated in 2017.
Since seed funding is very diverse, from “several thousand” euros to the largest research projects of up to 3 million euros, Aiginger-Evangelisti says it’s “very difficult” to cite an average figure, but “typical sizes of tickets for initial projects Additional funding ranges from 3,000 to 1 million euros”.
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The spread of business incubators has been equally important to the overall growth of start-ups. The fourth floor of what was once a police officers’ residence near Vienna’s Karlsplatz, dating from the time of the Austro-Hungarian empire, is now home to a handful of startups in development. This is i²c, the innovation incubation center of the Technical University of Vienna, dedicated, says founding director Birgit Hofreiter, to “turning the often innovative research of the university’s many brilliant masters and doctoral students into successful business operations.” .
Some of the current incumbents have already proven commercial success, for example Contextflow, an artificial intelligence-based system to help radiologists quickly identify health problems from chest X-rays. Legitary is another, also employing AI but in the music industry, to pinpoint streaming downloads. And NovoArc is dedicated to more efficient drug delivery, with the ultimate goal of enabling diabetic patients to replace injections with insulin pills.
Yet despite the successes, many in the industry say more can and should be done to unlock Austria’s potential.
Lukas Herrmann, a lawyer at Dorda, a Vienna law firm, is one of many denouncing the lack of active domestic venture capitalists.
“For a lot of founders, the first million is easy and then it gets really hard,” he says. “When you need real capital for Series A and Series B [investments] to get the party moving, you have to look at the US and the UK, because this is where it usually comes from.”
Austria has a lot of “old money” in the hands of wealthy families, but Herrmann says this source of funding is little tapped within the country, as society is much more risk-averse than in Germany, where capital is very similar. it is channeled towards family investment companies.
Regardless of its shortcomings, however, Nermina Mumic, CEO and founder of Legitary, the music streaming auditing software company, is succinct in her assessment of her homeland. “I think Austria is generally amazing when it comes to science and research,” she says.