With the jobless rate among young graduates approaching 40 per cent, the incentive for skilled Greeks to travel abroad to find work is strong.
Yet several hundred young entrepreneurs are testing their abilities by founding technology start-ups at home.
Until the crisis struck, Greece had few aspirations to become an internet hub, even though several university IT departments staffed by US-trained professors who keep up their Silicon Valley connections turn out highly qualified software engineers.
Now there is a drive to catch up.
“The crisis has changed things in a positive way,” says Marco Veremis, co-founder and chief executive of Upstream, an Athens-based mobile marketing company.
“There’s a start-up culture that’s buoyant. It’s still early days, but people are working to produce something with value-added.”
The bulk of financing for technology start-ups comes from four venture capital funds backed by an EU regional development package covering 70 per cent of a seed capital investment.
Aristos Doxiadis, a private equity professional, says: “There have never been many angel investors in Greece and it was hard to raise funding at the height of the crisis, but there’s a community of people here who trust each other, so we managed.”
He adds: “Now that several start-ups have taken off, there’s growing interest.”
Mr Doxiadis is a partner in Openfund II, an €11m operation that provides Greek technology start-ups with business tools and advice for competing in a global market, from guidance on pitching for funding to access to 50 international mentors. It is backed by the EU’s European Investment Fund and a dozen private investors.
One early success was Taxibeat, a smartphone application for hailing cabs that was launched in 2011. It made headlines in Athens at a time when taxi services were being disrupted by cabbies resisting reforms of the transport sector.
Taxibeat differs from other taxi-hailing apps by enabling customers to choose the driver they prefer, based on ratings by other passengers plus extras such as speaking fluent English.
Considered a good fit for European cities with heavy tourist traffic and for emerging markets where taxi services are less regulated, Taxibeat has expanded in markets across Europe from Bucharest to Paris and also in Latin America.
“Taxibeat has played a catalytic role for Greek start-ups because it was such a good story,” Mr Doxiadis says.
Openfund II has backed 12 start-ups since its launch last year and plans to reach 25 by the end of 2015.
So far, only one company has reached Silicon Valley. Bugsense, which collects and analyses crash reports from mobile apps, was launched in 2010 with a seed investment of $100,000 from a group of Greek diaspora IT experts working in California.
It was sold last year to Splunk, a US-based data analytics company, for an undisclosed amount.
Workable, founded by two former Upstream employees, is tipped as Greece’s next success story after raising $1.5m in a new funding round led by Greylock Partners, a Silicon Valley venture capital fund.
Workable is developing cloud-based recruitment software for small and medium enterprises.
“When a Greek start-up raises funding from an international fund, it sends a clear message to investors here,” says Mr Veremis, an angel investor and board adviser to Workable.
Several start-ups aimed at the tourist industry, the most important sector of the economy, have since expanded into global markets.
Incrediblue’s website connects yacht-owners and crew with customers who book sailing holidays based on price, location and reviews by users, reducing costs in a fragmented market where local brokers charge high fees.
Locish, a smartphone question-and-answer app that has attracted $820,000 of funding from two Greek venture capital funds, provides travellers with tips from local residents on where to eat and drink in Athens, New York and San Francisco.
Incubators that provide business space along with “open coffee” sessions and weekend meetings give young entrepreneurs an opportunity to exchange ideas and receive feedback, says George Kasselakis, Openfund II’s executive director.
Thanos Kosmidis and his partner Alex Giamas work at Microsoft’s innovation centre in Athens, which supports several start-ups with technology advice and mentoring.
CareAcross, their English-language website supporting cancer patients and care givers, which is financed with €100,000 of private funding, is at an early stage of development.
“It’s useful to have a physical base with a diverse set of people supporting you,” says Mr Kosmidis, who worked for IT companies abroad for 12 years before returning to Greece to start as an entrepreneur.
