Armilar's view on the Portuguese startup scene in 2021

1. Lisbon May 2022
PORTUGUESE STARTUP SCENE REPORT
2021
Lisbon, May 2022

2. Lisbon May 2022
As far as startup ecosystems go, we’ve come a long way in Portugal!
Having been around for as long as we have (since 2000!), at Armilar, we’ve been privileged to witness – and hopefully contribute to – the development of the Portuguese
ecosystem, from being practically non-existent (as many others were throughout Europe) to being the thriving community that it is today. Along the way, we’ve had the
privilege to invest in some of the most successful companies that Portugal produced, and we were just as equally privileged to invest in many others that, while maybe not as
successful, or not successful at all, also contributed very importantly to building the maturity of the ecosystem.
Today, Portugal is clearly punching above its weight, generating more than its fair share of high-potential tech-based startups that play in the same league as any startup
anywhere in the world, capable of attracting highly-qualified global talent and to raise professional venture capital investment from the world’s most experienced investors,
while creating impressive amounts of value.
It is not uncommon, though, that many startups choose to locate their headquarters abroad, for all the right reasons that we will not delve into here. Among other things, this
has the effect of obfuscating the true metrics of VC investment that many of us in the industry use to think of the different markets – and it typically means that Portugal is
under-represented in most of the widely used VC data sources.
This has led us to compile our own dataset, built from the ground-up from public sources of information, of the Portuguese startup scene, in which we try to include all the
deals of startups ”with a Portuguese origin”. This is mostly an internal tool, that is necessarily incomplete, certainly occasionally inaccurate. Still, we thought that it would
make sense to share some of the data collected more openly, hoping that it may be useful to the ecosystem as a whole. Especially since 2021 was such a groundbreaking year
for Venture Capital, globally and in Europe (where investment volumes essentially doubled) and also in Iberia and Portugal in particular, where the growth was even more
important, and several new unicorns were born. So here it is!
There are several reports published about the Portuguese ecosystem; this is not one of them nor is it trying to compete with any of them. Instead, we hope that it is a useful
instrument to complement all of them. We are not a data insights platform, so don’t take the data here as an absolute truth – please do go ahead and read the note about the
methodology. It’s just the data that we’ve collected and / or ”guess-timated” as part of our job as a Portugal-based international VC.
Queries, constructive criticism and suggestions are very welcome. Please direct them to info@armilar.com.
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A word from Armilar Venture Partners

3. Lisbon May 2022
About Armilar
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4. Lisbon May 2022
As insiders, we often feel that traditional information sources poorly reflect the reality of the Portuguese startup scene. There are two main reasons
for this:
• A relevant number of successful Portuguese startups move their headquarters (HQ) outside of Portugal, particularly after raising funds from international
investors and, consequently, they stop being considered as part of the Portuguese startup universe in traditional data sources, even when keeping most of
their operations in Portugal
• Information on funding rounds is spread across multiple information sources, and there is no widely adopted aggregating entity
As such, we felt the need to build our own database. We manually gather information based on publicly available, free sources, including (but not
limited to) news websites and investors' websites.
We define the Portuguese Startup scene in a broad sense, including startups with Portuguese roots but without their HQ in Portugal. In this report,
we include:
• Startups that have their HQ in Portugal (typically the standard definition in other databases), and
• Startups that do not have their HQ in Portugal but that have strong links to Portugal, namely by having Portuguese founders or international founders
located in Portugal, and a relevant local presence
Whenever a deal is made public, but round size or name (Seed, Series A, etc.) is unknown, we try to estimate them. We classify the round name based
on the perceived stage of the startup, using several variables, and assume a standard round size for each stage.
• To determine the stage, the main variables used are: prior rounds information, number of employees, round size, and product readiness
• To estimate the round size, we assume EUR 100 thousand for Pre-seed, EUR 400 thousand for Seed and EUR 3 Million for Series A rounds; we
acknowledge that this may evolve significantly with time, and we will review this criteria regularly
Given that exact transactional data is frequently not publicly available, data in this report should be considered as our educated guess of what
happened in the Portuguese startup scene.
Report methodology
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5. Lisbon May 2022 4
This report accounts for startups ”founded” in Portugal
Which includes startups with HQ outside Portugal
22%
100%
78%
Portuguese
startup scene
Startups “founded”
in Portugal (or by
Portuguese founders)
with HQ elsewhere
Startups with
HQ in Portugal
Of which,
• 55% Lisbon
• 16% Porto
• 8% Braga
• 7% Coimbra
• 7% Aveiro
• 7% Other
Many Portuguese startups /
scaleups move their HQ
elsewhere (often to the USA)
after raising a relevant funding
round with international investors
Note 1: If the HQ is outside of Portugal, the startup needs to have Portuguese founders or some International founders based in Portugal AND a relevant number of employees in Portugal
Note 2: Analysis based on headquarters stated in LinkedIn or Crunchbase companies’ pages
Source: AVP database; LinkedIn
Amount raised
% of 2021 total
Number of rounds
1
2
3
4
5
6
7
8
9
10
11
12
% of 2021 total
86%
100%
14%

6. Lisbon May 2022
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2
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0 50 100 150 200 250 300 350 400 450 500 550 600 650
1.6
1.4
1.2
0.8
0.6
0.4
0.2
1.8
1.0
0.0
0.2
0.40
0.035
0.025
0.010
0.015
0.000
0.000
0.020
0.010
0.015
0.005
When a similar criteria is applied to other European ecosystems, we see
that Portugal is punching above its weight in nurturing large tech
Number of Unicorns relative to countries’ GDP Number of Unicorns relative to countries’ population
VC-backed
Unicorns/
GDP
(per USD
Billion)
Average USD amount invested / GDP over 2020-2021
(per USD Billion)
VC-backed
Unicorns
per capita
(per million
inhabitants)
Average USD amount invested per capita over 2020-2021
(per million inhabitants)
Note: Country data based on HQ and founding location according to Dealroom, with exception of Portugal which is our proprietary database; only included European countries with at least 2M habitants
Source: OECD; Dealroom as of 02/02/2022; AVP Database; AVP Analysis
Y=3.0203X
R2=0.80
0.030
0.005
Y=0.003X
R2=0.92
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7. Lisbon May 2022
Two Portuguese Unicorns are amongst
the most valuable private European Tech companies
Source: https://stateofeuropeantech.com/
Top 10 VC-backed $1B+ private European tech companies
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In 2021, more than €1.4B was invested in Portuguese startups
4x the investment amount of 2020, due to an increase in the average deal size
Estimated number of deals by stage Estimated investment amount by stage
+17%
4x
Source: Pitchbook; AVP database
In line with global trends in 2021
• 2021 was a record year for global VC, with investment volumes essentially doubling in Europe and the US
• Mean deal sizes increased by 30-45%, depending on the stage
132
154
-10
10
30
50
70
90
110
130
150
170
2020 2021
# of rounds
353
1 414
-180
20
220
420
620
820
1020
1220
1420
2020 2021
EUR Million

9. Lisbon May 2022
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This amount was largely dominated by a few later stage rounds
But there was also a meaningful increase in Seed rounds
Estimated number of deals by stage Estimated investment amount by stage
Source: AVP database
125%
33%
5%
-8%
Growth
354
Growth
73 77
42
56
13
12
4
9
132
154
-10
10
30
50
70
90
110
130
150
170
2020 2021
# of rounds
+17%
11 10
43 97
80
96
219
1 212
353
1 414
-180
20
220
420
620
820
1020
1220
1420
2020 2021
EUR Million
4x
Series B and beyond
Seed Series A
Pre-Seed
5.5x
2.3x
0.9x
1.2x

10. Lisbon May 2022
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Early-stage rounds also contributed to increase
the average deal size
Pre-Seed
Median round size
EUR thousand
Seed
Median round size
EUR million
Series A
Median round size
EUR million
Source: AVP database
100 120
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
2020 2021
+20% 0.7
1.3
0
1
2
3
4
5
6
7
8
9
2020 2021
+94%
4.3
8
0
1
2
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9
2020 2021
+88%

11. Lisbon May 2022
The 10 largest funding rounds in 2021 represented 87% of all the
money raised, revealing four new unicorns
% of the total amount raised
21%
5%
14%
12%
10%
5%
1%
9%
9%
1%
Amount raised in 2021
$350M
$80M
$230M
$200M
$163M
$85M
$25M
$150M
$150M
€17M
Valuation
$3B
N/a
$10B
$1B
$2B
N/a
N/a
$1B
$9.5B
N/a
Round
D
C
D
D
D
C
B
B
A
New
New
New
New
Startup
1 At the time of the round; Some investors might have (partially) divested
Source: Pitchbook; AVP database
Main Portuguese investors1 (round invested)
Indico (Series C)
N/a
Armilar (Seed), EDP Ventures (Seed)
Faber Ventures (Series A)
N/a
Armilar (Series A), Portugal Ventures (pre-Series A)
Portugal Ventures (Seed)
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12. Lisbon May 2022
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International investors’ participation increased by over 60%
Rounds with international investors have increased in
size and number...
... representing a relevant source of funding for
Portuguese startups
Participation in 2021 per type of player
% of rounds
Source: AVP database
38
64
0
10
20
30
40
50
60
70
2020 2021
+68%
316 1,378
Total size
(M€)
# of rounds
Portuguese-
based
42%
79%
29%
21%
8%
36%
CVC or
Corporates
International investors
Business
Angels
Public
funding
VCs
Portuguese-based investors Majority of the
rounds participated
(~70%) was in
syndicate with a
Portuguese-based
investor or in a
company that was
previously backed
by a Portuguese-
based investor
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13. Lisbon May 2022
Some of the world’s leading VCs invested in
Portuguese startups in 2021
... and many more
Source: AVP database
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14. Lisbon May 2022
The participation of international investors increases
as the companies mature
18%
13%
18%
3%
53%
CVC or
Corporates
VCs
International investors
Business
Angels
Public
Funding
Portugal-
based
Participation in Portuguese startups’ 2021 investment rounds, by type of investor
% of rounds
Pre-Seed Seed
1
2
3
4
5
6
7
8
9
10
11
12
Series A
1
2
3
4
5
6
7
8
9
10
11
12
Source: AVP database
55%
50%
32%
16%
18%
83%
42%
0%
17%
42%
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15. Lisbon May 2022
Several active investors throughout the year,
with Portugal Ventures closing the largest number of deals
49
15
10
8
7
6
6
6
6
5
5
Wisenext
New Zone
Olisipo Way
Faber Ventures
Bright Pixel
Armilar Venture Partners
Shilling Capital Partners
Think Bigger Capital (Demium)
Indico
Portugal Ventures
Mustard Seed MAZE
Source: AVP database
Participation in Portuguese startups’ 2021 investment rounds, by type of investor
# of rounds
VCs
Public funding
Business Angels
CVC or Corporates
International investor
Type of investor
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Portugal Ventures was the most active investor in Pre-Seed and
Series A rounds, while Shilling was the most active in Seed
Pre-Seed Seed Series A
Source: AVP database
41
8
6
5
4
Portugal Ventures
Think Bigger
Capital
Olisipo Way
Indico
Shilling Capital
Partners
# of rounds
11
5
5
5
5
5
5
Shilling Capital
Partners
Armilar Venture
Partners
Bright Pixel
Faber Ventures
Mustard Seed
Maze
New Zone
Portugal Ventures
# of rounds
3
2
2
Portugal Ventures
Armilar Venture
Partners
Indico
# of rounds
VCs
Public funding
Business Angels
CVC or Corporates
International investor
Type of investor

17. Lisbon May 2022
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Portuguese startup scene is mostly a B2B SaaS
and deeply technical market
Invested topics1 by number of rounds Invested topics1 by amount invested
12%
23%
21%
>25%
6%
22
26%
74%
0 20 40 60 80 100
As percentage of the total
B2B
B2C
Artificial
intelligence
Blockchain
SaaS
Marketplace &
ecommerce
Healthtech
Fintech 50%
19%
4%
>41%
27%
32%
4%
96%
0 20 40 60 80 100
As percentage of the total
Client focus
Technology
Business
model
Industry
1 Not exhaustive nor mutually exclusive
Source: AVP database
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18. Lisbon May 2022 17
Contacts
Armilar Venture Partners, SGFCR, SA
Rua Tierno Galvan, Amoreiras, Torre 3, piso 17
1070-274 Lisbon, Portugal
Tel: +351 216 030 166
www.armilar.com
info@armilar.com
www.linkedin.com/company/armilar/
twitter.com/armilarvp