The view that the crisis we are currently experiencing can be an opportunity for our country and to accelerate the development of the technology ecosystem is expressed in an interview with “K” Marcos Veremis, partner at Big Pi Ventures, president and co-founder of Upstream and chairman of the BSE innovation committee. Mr. Veremis believes that, despite the challenges, companies that are born during such a period will have a better basis for getting big, saying that the new Big Pi II fund is already poised to close the first 3 funding deals with startups. actively working in the field of medical sciences and data management. He is positive about the development of the startup ecosystem in Greece, but also talks about funding gaps for more mature companies, which could lead to early takeovers of technology companies.

– Indeed, now is not the right time to sell technology companies (exits), as the valuations are lower than in previous years. As a rule, this is not the time when there is a demand for acquisition of companies. Of course, this is not necessarily a bad thing. We are moving away from a period where the focus was on company valuation and rapid growth, towards a period where profitability and household growth are more important. After all, all large companies have grown in times of crisis. Amazon, Google and two other tech giants raised a total of $250 million before going public. What does it mean; How these companies are accustomed to focusing on profitability and being careful with their spending. Well, if valuations have also declined, the value of money has increased, and financing has become more difficult, I believe that companies that are born in such a period will have more reason to become very big. We also saw this in Greece, when several startups were born during the crisis.

We are entering an era where the “household” is more important than rapid growth.

– Workable, Blueground, Persado, Upstream, etc. These are “household” companies that do not have too many employees and have a good financial profile. Unlike its US competitors, which, despite higher growth rates, were closing too large funding rounds and were over-indebted. What I also see in Greece is that it may not be the best season for “harvesting”, but it is a good season for “planting”, and the “seeds” that will germinate, i.e. the companies, will bloom in more unfavorable conditions and so they will be more durable. We see quite interesting cases, there is a good flow of candidate companies for financing. We are already poised to close the first three funding deals with data management (big data) and health sciences start-ups.

– I’m sure. In times of crisis such as the one we are experiencing now, people who never thought of becoming entrepreneurs and either lost their jobs or were dissatisfied with their earnings are liberated and feel ready to start their own business. Skilled workers from Google, Amazon, etc. will continue to be in the market either as entrepreneurs or as executives. For smaller companies, this is a great opportunity, as their talent could be the raw material for building the next big tech companies.

Use the potential of the Greeks in the Diaspora

– The first important conclusion is that the dynamics of the Greek community in the Diaspora is very high. This is a very dynamic and productive group that we got to know better through the Innovative Greeks, an initiative of the BSE Innovation Committee that unites inventive Greeks from all over the world into one community and connects them to the Greek innovation ecosystem. We have calculated that the valuations of Greek businessmen’s companies based in America are in excess of $100 billion, so it is important to help Diaspora Greeks gain a presence in Greece.

Now in America, talent is hard to come by, expensive, and wages are rising fast. Employees often change employers. Greece could be the solution to these problems, as talent in Greek companies is not leaving as quickly as in America. We have invested in companies such as Orfium (active in the music industry) and big data management company TileDB, which have R&D teams in Greece but their sales and customers are in America. This model works very well and is well received by our US co-investors such as Intel, which has also invested in TileDB. The same applies to British investors such as Oxford Sciences Innovation, which has invested in Navenio. Secondly, by taking over the management of the new fund, we have gained a clearer picture of the sectors where good minds are concentrated.

The three main areas we have identified as Greek talents are data science, generative AI, and life sciences. Deep tech, companies with deep tech products that have been rare in the past thirty years, are now at the forefront of ecosystem development internationally. In other words, we will see more and more companies that base their product on deep R&D. Such was the case with Greek-based Accusonus, an audio processing software company that was acquired by Meta, the parent company of Facebook.

– What is missing in the Greek innovation ecosystem and what “mistakes” could have been made in previous years?

– While Greece has built an ecosystem of funds for investments in start-ups that are in the early stages of development (pre-seed, seed), there are no corresponding investment schemes for more mature companies. That is, those who need a capital of more than 10 million (series A, B, etc.). This can lead to early acquisitions of technology companies or the arrival of a foreign investor who can define and control the company itself. If such funding opportunities were available, perhaps the founders of startups would prefer to stay in the company to further develop it, rather than sell it. I should also note that we haven’t seen big results from early Greek startup acquisitions.

– You stated that in about a decade the start-up sector could approach 10% of GDP. It’s possible;

– I think that a good foundation has been laid, and all the funds created in Greece have made good investments. There are very high quality companies (eg Hack the Box, TileDB) with a good team and a good product. On a cross-party level, the state has taken all the necessary steps to support the ecosystem by creating tax incentives, while the Hellenic Development Investment Bank has also created liquidity in the technology space. I am optimistic that the crisis, even the looming recession, will be an opportunity for our country. Because at a time when valuations are falling and growth is slowing around the world, Greece can accelerate the development of an innovation ecosystem.