Southern Europe Outpaces Traditional Tech Hubs in Startup Growth

The European Scaleup Institute’s latest monitor tracks over two million companies, noting a shift in the continent’s entrepreneurial gravity. Despite a minor dip from 2023 peak levels, the overall trend points toward a robust recovery from the stagnation of the pandemic years. Information and communication sectors remain the primary engines of this expansion, though administrative support services are closing the gap.

Veroniek Collewaert, an entrepreneurship professor at Vlerick Business School, describes this shift as a fundamental rebalancing of Europe’s landscape. Southern economies, once crippled by earlier financial crises, are now cultivating resilient ecosystems. In contrast, Germany currently sits below the EU average for startup scaling, with Sweden and Finland also reporting unexpected declines.

Structural hurdles persist, however. European scale-ups continue to raise roughly half the capital of their Silicon Valley counterparts, forcing many to seek funding abroad and list on foreign stock exchanges. This capital gap remains the single largest barrier for firms attempting to transition from early-stage startups into sustainable, high-growth enterprises.