SHM2021: The Power of the Ecosystem

Most Attractive Cities to Start a Company in Europe

Our annual survey asks a robust sample of European founders what cities are most attractive to start a company in. The survey runs continuously since 2016 allowing a comparison over time. Based on 1,295 founder votes collected from April 2020 to August 2020, we find remarkable movement in the most popular startup hubs for founders in Europe.

While the top 10 had been very stable over the years with only 2 changes in 2019, we see that the year of COVID-19 and Brexit brought sizeable changes among the startup city brands: 15 positions are changed in the Top 20. This open up several questions about the robustness of European ecosystems.

Graph 1: Popularity vs. Countries Reached
The scatter chart shows the change of perception of the most attractive startup hubs in Europe from 2019-2020. The horizontal axis shows the percentage of founders seeing the city as an attractive startup hub, while the vertical axis shows the number of diverse countries the founders come from.
Source: Startup Heatmap Europe Survey 2020

Diversification of Preferences

Since 2016 we have seen a diversification of preferences among founders with the top hubs losing percentages. In 2020 this trend continues with Paris even dropping out of the Top 5 for the first time since 2017, when it captured 19% of all founder votes. In 2020 Paris is down to 10% and falls slightly behind Munich and Lisbon.

Overall, after declines year over year the Top 5 capture 42% of the vote in 2020, as in 2019, indicating that we reached a new equilibrium with some 5-10 strong startup city brands, instead of 2-3 in 2016, where Berlin and London were the unreachable champions. Today, there is 7 hubs that reach more than 10% of founders – a new record high.

Berlin overtakes London in Popularity

In this remarkable year, Berlin performed outstandingly well with founders, boosting their result by 5% percentage points to 39% of the founder vote coming from 29 diverse countries. London in contrast continues to decline by -1% percentage point. One explanation might be the overwhelmingly positive perception of the German COVID-19 response during the time of the survey, but also the Brexit discussion that has supported uncertainty.



















































Table 1: Popularity of London and Berlin by Region
Source: Startup Heatmap Europe Survey, 1,295 votes

In 2019 we observed a divide going through Europe with Central Eastern European founders leaning dramatically more to London, while the Nordics and Baltics turned to Berlin. In 2020 the positive trend for Berlin continues, but London sees a mixed picture: In the Nordics, London has regained grounds (+12% points), while in CEE their popularity tumbled (-12% points). The worst effect however is seen with founders based currently in the UK and Ireland, where London dropped from 55% of the vote to only 36% in 2020 (-19% points). This provides a strong argument for a negative perception of the consequences of the Brexit among founders who moved to London or the UK – many of them clearly would not do so again. Across all European regions, London remains the top choice only in the Mediterranean countries.

Global Challengers: Amsterdam, Barcelona, Zurich

Amsterdam and Barcelona remain the closest challengers to the two leaders reaching both a high percentage and diversity of the vote. A remarkable increase of attention can be observed for Zurich, who lost its Top 10 ranking in 2019 and now sees an increase of reach by 4% points and 7 more countries reached.

Zurich is slightly less popular than Lisbon, Munich and Paris, but reaches a more diverse set of countries and therefore can be seen as more recognized as a global startup hub.

The rest of the top 10 is rather stable with Stockholm, Tallinn, and Lisbon holding their positions. Only Munich jumps 2 ranks replacing Paris in the Top 5 of most attractive startup hubs in Europe.

The Top 50

Regional Champions: Amsterdam leads the way

Amsterdam is the most popular hub among Benelux-based founders. This is indeed the first time since the start of the survey in 2016 that a regional hub is the most popular – and not London or Berlin. With 46% of the regional vote, Amsterdam pushes ahead and even marks the highest share of vote across all regions recorded. It is a further sign of the end of unchallenged domination of the top hubs and motivates to look for other challenger hubs, that could do the same in their region.

For founders in the Nordics and Baltics, no clear regional leader emerges. Berlin leads with 41% of the vote ahead of a stand-off between London, Tallinn, Copenhagen, Stockholm and Helsinki, all reaching 20-25% of regional founders. This shows that the Nordic and Baltic region is well developed and offers a great choice of hubs for founders.

The Mediterranean hubs are even more fragmented, with only Barcelona and Lisbon reaching a sizeable followership of 18% each. Remarkable are the increases of Athens (+5%) and Nicosia (+4%), who seem to have attracted more attention in 2020 than the years before.

Berlin dominates Western Europe with 45% of the vote. The stable picture shows that only Zurich (20%) and Munich (17%) reach a noteworthy prominence across the region over the years. Vienna is catching up, increasing their regional vote in Western Europe by 11% points.

Central Eastern Europe’s long-time favorite London is overtaken by Berlin in 2020 (36% vs. 35%). The region shows the highest fragmentation with no clear contender emerging from the local ranks. Bucharest reaches 14%, Tallinn 13% and Prague 11% of the regional vote.

In the UK and Ireland, we see clearly the effects of Brexit on the preferences of founders. Next to London’s downfall, Dublin shot to the third rank with a 21% point increase, overtaking Manchester, Edinburgh and Newcastle, who were the strongest local contenders in the past.

Regional Rankings

Table 3: Most popular hubs based on regional founders’ votes, with change from last year
Source: Startup Heatmap Europe Survey 2020

Ecosystem Dynamics

Popularity and brand perception is an important indicator to foresee future developments in an ecosystem, as for example total investment sums will only adjust in 5-10 years to an increased activity in the early-stage support system for founders. However, there is of course more factors at play that we can look at. The Startup Heatmap has been aggregating many different sources to allow to capture ecosystem dynamics ranging from investments to job creation, diversity, accelerator support, developer availability and global connectivity. 

On the Startup Heatmap Europe Platform you can find a variety of metrics to explore the performance of your favorite startup hubs. Here we restrict ourselves to show some highlights of the city comparison:

Industry Connections

In the survey we asked founders who picked a city as an attractive place to start their company to rate the destinations for various categories. One of them is how well the startup scene is connected to the industry. The value shows the percentage of very good or extremely good ratings. Only cities with a minimum of votes are included.

The cities of London, Tel Aviv, Munich reach an extremely high rating of >86% endorsements by their followers.

% of endorsements 90%
Tel Aviv

Table 4: Endorsements (= % of ratings >7 of 10) for Industry Connections
Source: Startup Heatmap Europe Survey 2020

Female Entrepreneurs

To determine which cities have the largest share of female entrepreneurs, we have compiled a dataset of >20,000 founder profiles across Europe. Oslo is ranked 3rd with 26%, behind Budapest and Vienna with 30% and 34% respectively.

% of founders are female 34%

Table 5: Percentage of female names among founder names per city
Source: Startup Heatmap Europe Analysis of >20,000 founder profiles in 2020

Developer Availability

To understand the available talent pool, we track the number of full-stack developers per city as estimated by Atomico and Stackoverflow every year. The last estimate is from 2019 and shows that London is the largest labor market for IT specialists, followed by Paris and Amsterdam. Cologne in Germany is ranked 4th with a remarkably large pool.

357,900 developers

Table 6: Number of software developers per city
Source: Atomico / stackoverflow

Investment Growth

With 8bn € startup investments on average per year, London is by factor 2x the largest destination for VC funding in Europe – however will this remain like this forever? We are looking at the long-term investment growth by comparing the annual average of 2015-2017 with 2018-2020 based on dealroom.co data, showing which hubs have the largest gains. Here we look only at hubs with more than 200mn € investments per year.

Bucharest has seen the highest growth, shooting from barely any investments to an average of 300mn € per year in 2018-2020. In total investment sums it is behind Zurich, which grew also an impressive 444%. Tallinn is growing by 370% and maybe most remarkably Munich has increased its average annual investments to 880mn € (+290%), which is considerably harder to do coming from a higher level.

3231% increase
444% increase
370% increase
290% increase

Table 7: Average of total startup investments between 2018-2020 and growth from average in 2015-2017
Source: Own calculations based on data from dealroom.co

Value for Money

In the survey, we asked founders who voted for a destination to rate them from 1-10 on the criteria of “value for money”, meaning the balance of benefits and cost of the location in question. In the results only cities with a minimum threshold of votes were included.

The top destination in this category is Porto with a 94% positive rating. Porto, skyrocketed 38 ranks in this years survey ending up as the 18th most popular destination overall. It is followed by Ljubliana with a solid 90% endorsement rate for Value for Money and Tallinn with 88%.

% of endorsements 94%

Table 8: Endorsements (= % of ratings >7 of 10) for Value for Money
Source: Startup Heatmap Europe Survey 2020

Job Creation

To understand which startup hubs create the most tech jobs, we are tracking job openings on public job boards related to startups. Looking at the monthly data, we see Berlin leads over Berlin even though it has a smaller number of investments every year. Paris and Munich follow suite with also more than 1.000 job openings in the startup sector per month.

2,757 monthly job openings
1,818 monthly job openings
1,338 monthly job openings
1,125 monthly job openings

Table 9: Job openings in February 2021
Source: Startup Heatmap Europe tracking of job listings, 2020

Ease of Doing Business

Founder ratings for Ease of Doing Business show that startup friendly regulation pays off for governments and that smaller hubs are well positioned to outperform the incumbents in this category.

Dublin leads this category in 2020 with a marginal lead over Tallinn. Luxembourg still receives a rating of 90%.

% of endorsements 94%

Table 10: Endorsements (= % of ratings >7 of 10) for Ease of Doing Business
Source: Startup Heatmap Europe Survey 2020

Case Study: How does Barcelona maintain the 3rd rank for 4 years?

It is four years in a row that Barcelona maintains as the 3rd most attractive hub for startups in Europe based on our annual survey on founders mobility since 2017-2020. For 2020, more than 17% of all European tech founders chose Barcelona as their location for their startup. This also translates into an exceptional high share of foreign-born founders in the city, where over 65% of startup founders in Barcelona are foreigners, placing Barcelona as the 4th most international European startup hub. 

Barcelona keeps thriving as one of the most diverse startup ecosystems

Barcelona has one of the most dynamic startup ecosystems in Europe with over 1,197 startups (MWC Barcelona). The Catalan capital is also home for 7 international unicorns, who opened offices there, including N26. Further there are three homegrown unicorns, namely Glovo, Letgo and eDreams. eDreams went public and Letgo moved to New York, but both have their roots in the Catalan Capital.

Graph 2: Largest percentage of foreign-born founders per city
Source: Startup Heatmap Europe Survey Data 2016-2020

According to the Dealroom, Barcelona startups raised over 3.56 bn € in investments between 2013 and 2020. It is the 8th largest investment hub measured by the average investments per year in Europe (620mn € / year). Capital invested in Barcelona has nearly doubled since 2016 showing how the ecosystem is developing and becoming more mature.

In the survey we have asked those who said they could imagine setting up their company in Barcelona to rate the ecosystem along 6 criteria: Funding availability, Business Regulations, Talent availability, Industry connections, Startup ecosystem & culture, and Value for money. Founders could rate each criteria from 1-5 in half point steps. The percentages in the graph below show the endorsements, i.e. ratings above 3 points, for each dimension. Overall, Barcelona receives high ratings and above the average on startup ecosystem support (82%) and value for money (75%). To most of the European founders, the city resonates as a vibrant and growing hub full of opportunities.

Graph 3: Founder endorsements for Barcelona based on categories over time
Source: Startup Heatmap Europe Surveys 2019 and 2020

Barcelona has a unique tech community

Barcelona has the second most tech-skilled founders among large tech hubs with >500mn € investments per year, giving way only to Tel Aviv. Over 32% of Barcelona startup founders are tech-skilled and have advanced programming and coding skills.

Based on the registered users on stackoverflow.com, a public platform for professional and enthusiast programmers that serves 100 million people every month, Barcelona is the 7th largest developer hub in Europe. The city has a strong digital community with 77,000 professionals where 26% of digital professionals are women (Barcelona Digital Talent). The Catalan hub attracts most of the digital talent from Europe – over 31% of the digital professionals come from other cities, primarily from Madrid and Paris (Barcelona Digital Talent).

Barcelona also offers a competitive gross salary for the digital professions- around €38K, while the average salary in London is €73K (Teleport). Based on our own tracking of job openings in Barcelona, we see AI & Data, SaaS and Fintech are the most in-demand recruitment areas in town.

7th fastest growing tech meetups hub

Barcelona’s tech community is the 7th fastest growing in Europe with an increase of meetups by 426% from 2014 to 2020 as measured by followers on meetups.com. Despite COVID-19 and lockdowns, meetup participation in Barcelona increased by 21% in 2020. As most of the events were happening online, the meetups participants became global with founders joining from all parts of the world.

The community’s output on deep tech can be seen by the exceptional high focus on deep tech startups. In fact, based on Dealroom data Barcelona beats Paris, Berlin and London in terms of the share of deep-tech based startups:







Number of startups






Number of Deep Tech startups






Share Deep Tech






Table 11: City comparison of number of Deep Tech related startups
Source: Dealroom.co

Besides the growing number of the tech community, Barcelona’s startup scene attracts international attention through events like Mobile World Congress (MWC) (6th in the Startup Heatmap Tech Conference Ranking) that hosts 4YFN (Four Years from Now) as a conference inside the conference, showcasing the latest technological advancements with a mix of activities including stage talks, startup pitches, VC meetups, workshops, corporate innovations and an investor program.

The MWC is the most international of the large tech conferences in Europe beating even Websummit with >77% international guests as we tracked in the Startup Heatmap Conference Monitor.

Barcelona has also a great number of incubators and accelerator programs with international mentors helping entrepreneurs get their ideas off the ground. Some of the most notable accelerator programs are Conector, Wayra BarcelonaSeedrocketCRAASH Barcelona, and D-Health Barcelona. Remarkably, Wayra Barcelona is the top rated accelerator (10th) on the follow-on funding rate, where 43% of startups received additional funding following the initial investment based on our analysis. Another remarkable statistic is that D-Health Barcelona has the 6th highest percentage of female participants among all accelerators in Europe with 33% of participants being women.

The Barcelona startup scene is made up of a rapidly growing and constantly evolving community of talented and international professionals with supporting organizations. It has all the necessary elements of a successful and healthy startup ecosystem to grow sustainable companies.

Here are some stories from corporates and founders on why they pick Barcelona:

Marc Gómez, CEO of ABB in Spain, digital solutions company: “Barcelona attracts talent and knows how to retain it”

The Swiss company ABB, a corporate specializing in digital solutions for all industry sectors, has opened its first European customer innovation centre in Barcelona. Marc says: “We chose Barcelona for four major reasons. Firstly, due to the region’s infrastructures. Secondly due to its important industrial base and the existing market in Catalonia, making it one of the pillars upon which a company can grow and progress.

And the other two reasons are intangible, but they are the ones that make the difference. Firstly, in Barcelona we can see an unbeatable ecosystem that brings together start-ups, universities and research centres: this is the differential factor that makes one decide to locate this kind of centres in the city. Secondly and finally – and probably what was key to the decision to locate in Barcelona – is the access to talent, and the ability to retain that talent.”

Carlos Buenosvinos, Head of SEAT:CODE, car manufacturing development centre: “Barcelona holds all the cards to be a major player in the mobility of the future”

Barcelona-based car manufacturer SEAT, part of the Volkswagen Group, opened the SEAT:CODE development centre in the city center, giving it the mission of finding new business models related to mobility and the transformation of the automotive sector. Carlos says: “From a technological perspective Barcelona is a city where there are major companies working on issues related to mobility. And not just mobility of people, but also logistics, delivery, food delivery, last mile, etc. Barcelona holds all the cards to be an important player in the mobility of the future.”

Davis Siksnans, CEO of Printful, popular printing company: “Barcelona is a great location because it has a powerful entrepreneurial and tech scene”

Printful is an on-demand printing and warehousing company that fulfills and ships custom clothing, accessories, and home and living items for online businesses. In May 2020, Printful opened a fulfillment center right outside Barcelona after seeing an increasing demand of their services in the Western European markets. “Barcelona is a great location for us because it has a powerful entrepreneurial and tech scene, and it’s close to other countries where we want to sell more of our products. That’s why Barcelona seemed like the place to be. We’re also excited to look into Barcelona’s talent pool. We’re especially interested in finding software developers”, says Davis.

Desiree Taboada, Founder of the food wasting app “I am perfect food”: “Barcelona, apart from being a great place to start a startup, is home to a lot of people that are open to joining their cause”

I am perfect food is a young Barcelona startup that fights against food waste via an app that allows users to order imperfect food products for up to 80% off. “Barcelona is a city where people are very concerned about their quality of life and the environment. They’re constantly working to make their lives better. They try to make conscious decisions like riding bicycles, buying local products and recycling. And that’s why it’s a good place for us to make the connection between reducing food waste and saving money for yourself”, says Desiree.