Austria's Startup Scene: Overrated Or Underrated?

Austria has emerged as a very attractive location for startups in recent years, with over 3,000 startups established since 2011, including unicorns such as the trading platform Bitpanda and the learning platform GoStudent. The country boasts a dynamic and large startup ecosystem, with many excellent research institutions, investors, and incubators.

Austria's startup ecosystem is growing, with the number of startups increasing from 2,544 to approximately 3,400 since 2022. The country's strong economy, supportive business environment, and government initiatives like the Global Incubator Network and AWS Seed financing have contributed to this growth.

Austria's startup scene is also notable for its focus on social and ecological impact, with more than half of all startups in the country belonging to the category of green or social impact startups. Additionally, 33% of Austrian startups have female founders or co-founders, the highest proportion among all EU member states.

The country offers extensive public funding, with the public sector alone providing over €100 million in funding to startups, scaleups, and spin-offs in 2023 through the Austrian Research Promotion Agency FFG. This funding is crucial for new enterprises, especially during the pre-seed and seed phases.

Overall, Austria's combination of a strong economy, supportive business environment, extensive public funding, and a dynamic startup ecosystem make it an attractive location for startups.

Austria's startup scene

Austria's central location in Europe also makes it an ideal test market for the DACH region, with about 100 million consumers. The country also has a high quality of life, and reforms such as the introduction of the "Flexible Company" (FlexCo) have made it easier for startups to establish themselves. Additionally, the Austrian startup scene has a strong focus on social and ecological impact issues, with more than half of all startups in the country belonging to the category of green or social impact startups.

Some notable Austrian startups include:

• Bitpanda: a trading platform for digital assets
• GoStudent: a digital school that connects students with teachers
• Refurbed: an online marketplace for refurbished electronics
• Tractive: a company that creates GPS tracking devices for pets
• PlanRadar: a SaaS service for construction and real estate project documentation and communication
• Prewave: a platform for AI-driven supply chain risk management
• Kern Tec: a startup that upcycles fruit pits to create sustainable ingredients for plant-based products
• TTTech Auto: a provider of safe software solutions for the automotive industry, specialising in platforms for automated and autonomous driving

Funding and investment

Austria has a dynamic startup scene, with investments of EUR 695 million in 2023, which has catapulted the country to fourth place in the EU in terms of the number of unicorns. The country has a strong venture capital/private equity scene and a growing business angels community, making it an attractive location for innovation-driven companies.

The Austrian government provides grants and subsidies to support startups, with the Austrian Research Promotion Agency (FFG) and Austria Wirtschaftsservice GmbH (AWS) playing key roles. FFG offers national funding for industrial research, while AWS provides "soft loans", guarantees, and grants to startups.

AWS has several grant programs, including Creative Impact, which offers up to EUR 200,000 in non-repayable grants for innovative new products and services, and Growth Investment, which provides up to EUR 400,000 in non-repayable grants for projects focused on strengthening a company's market position. FFG's Impact Innovation grant offers funding of up to EUR 75,000 for small and medium-sized enterprises to invest in innovation and R&D projects.

Austria also has a strong network of national venture capital firms and business angels investing millions in promising concepts. According to the EY Startup Barometer, 70% of investors in pre-seed financing rounds and 56% in seed and early-stage financing in the first half of 2021 were from Austria.

Austria's central location in Europe, high quality of life, and tax credits for research and development make it an attractive destination for entrepreneurs and investors alike.

International market

Austria's startup ecosystem is growing, with the country ranking as one of the top startup-friendly countries in Europe. The nation's strong economy, supportive business environment, and dynamic community make it an attractive location for international markets.

Austria's central location in Europe and its role as an ideal test market for the DACH region with about 100 million consumers make it appealing for international expansion. The country's high quality of life and dynamic startup ecosystem, including research institutions, investors, and incubators, further enhance its attractiveness.

Austria also boasts a strong student community, with about 22% of startups created as academic spin-offs from universities or research organisations. This provides a deep talent pool for international markets to tap into. Additionally, reforms such as the introduction of the "Flexible Company" legal form for startups make it easier to establish companies in the country.

The country also offers extensive public sector support, with institutions like the Austrian Research Promotion Agency (FFG) and venture capital funds like the aws Founders Fund providing financial assistance, networking opportunities, and practical support for business establishment. This extensive public funding is particularly beneficial for early-stage startups, with investments ranging from €250,000 to €10 million.

The Austrian government's commitment to fostering innovation is evident in initiatives like the "Global Incubator Network" and "AWS Seed Financing," which play a crucial role in the growth of promising startups. These initiatives offer crucial funding, mentorship, and international networking opportunities.

Austria's vibrant startup community also hosts numerous events, such as the Pioneers Festival, Wolves Summit Vienna, and ViennaUP, which provide valuable networking and growth opportunities for international markets looking to establish connections and expand their presence in the region.

Overall, Austria's combination of a supportive business environment, extensive public funding, a strong talent pool, and a dynamic startup community make it a desirable international market for startups seeking expansion and growth.

Government support

Austria's government is actively involved in the growth of the country's startup ecosystem. The public sector provides funding, mentorship, and international networking opportunities to new businesses through initiatives such as the "Global Incubator Network" and "AWS Seed financing." In 2023, the Austrian Research Promotion Agency (FFG) provided over €100 million in funding to startups, scaleups, and spin-offs, surpassing previous years. This funding is crucial for the development of new enterprises, especially in the pre-seed and seed phases.

The Austrian government also introduced the "Flexible Company" (FlexCo) legal framework, which streamlines the process of establishing companies. This uncomplicated and efficient business structure facilitates startup creation and contributes to the country's appeal as a launchpad for new businesses.

Austria's government support extends beyond financial assistance and legal frameworks. Organisations like the Austrian Business Agency and the Vienna Business Agency provide comprehensive consulting and support services for international entrepreneurs establishing themselves in the country. These agencies contribute to the country's vibrant startup community and help attract talent from around the world.

The country's commitment to diversity and inclusivity is also evident in its startup ecosystem. Austria boasts the highest percentage of female founders or co-founders among all EU member states, with 33% of startups led by women. Additionally, the government provides targeted support for startups focusing on future-oriented sectors such as deep tech, green tech, and life sciences, as well as those with social and ecological objectives.

Green and social impact startups

Austria has a lot to offer when it comes to supporting startups, and this extends to green and social impact startups too. The country has a strong and growing ecosystem for new businesses, with a particular focus on innovation, investment, and talent. Austria's capital, Vienna, is a hub for entrepreneurial activity, with nearly half of the country's startups based there.

The Austrian government and public sector are committed to supporting green and social impact startups. In 2023, the Austrian Research Promotion Agency FFG provided over €100 million in funding to startups, scaleups, and spin-offs, with a focus on deep tech, green tech, and life sciences. This support for future-oriented sectors is a key part of Austria's strategy to strengthen its position as a leading innovation location in Europe.

Austria's startup scene also benefits from a dynamic community that hosts numerous events and platforms, such as the ViennaUP and 4GAMECHANGERS Festival. These events provide startups with opportunities to present themselves, network with investors and other players in the ecosystem, and drive their ongoing development.

The country also boasts a deep talent pool, with a large student community and a high number of academic spin-offs. Additionally, Austria has a strong focus on diversity and inclusivity, with 33% of startups having female founders or co-founders—the highest proportion among EU member states.

• Wurmkiste: Founded by David Witzender, Wurmkiste is a company that created a worm composting bin to help households recycle food waste and produce humus for gardening.
• Urban Gold: This company, based in Leoben, specializes in extracting rare and precious metals from electronic waste, contributing to a more efficient and sustainable recycling process.
• Green Energy Lab Austria: As the country's largest innovation laboratory for renewable energy, Green Energy Lab brings together partners from research, the energy industry, and the public sector to develop better energy solutions.
• Lenkerbande: Based in Vienna, Lenkerbande offers various bicycle-related services, including fixing, recycling, and donating used bicycles. They also have a project aimed at helping refugees familiarize themselves with their new surroundings through cycling.
• MONTREET Sportswear: MONTREET produces wind and water-resistant jackets for outdoor sports from recycled polyester, with designs by the Viennese artist BOICUT.
• Shades Tours: This social enterprise in Vienna and Graz offers educational tours that provide insights into homelessness, refuge, integration, and addiction. The tours are guided by people who have experienced these issues, helping them reintegrate into society.
• Frag Nebenan: Frag Nebenan is a platform that connects residents from diverse backgrounds and helps them support each other with various issues, such as babysitting, lending household items, or assisting sick neighbors.

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