Cyprus to become a leading innovation centre for the Mediterranean Region

Last week, our team at Shorex Innovation hopped to Cyprus from Tel Aviv, on a remarkably short 40 minute flight, to attend the 5th Funds Summit in Nicosia. Working with startups in Israel and Europe, I was particularly interested to find out what Cyprus has to offer to VC firms and investors with its AIFs and RAIFs (Registered Alternative Investment Funds). Judging by the number of international venture capitalists I met from places as far afield as California, Jordan and Singapore, Cyprus appears to be on the radar of the international VC community.

As well as promoting its thriving fund business, Cyprus is also keen to attract venture capital and become an active player in the startup ecosystem. There are currently 21 VC firms based in Cyprus listed on the Crunchbase database. This is not a lot compared to the 879 VCs listed in the UK and the 302 in France, but it’s not far behind Portugal with 32, and a lot more than the other Mediterranean island of Malta which has only one 3 VC firms to date. Altogether, it is pretty good for a country of less than a million people.

Owing to its long-standing cultural ties with Russia and the CIS, Cyprus has benefited from an influx of highly educated scientists and engineers. So it comes as no surprise that the leading VC firms in Cyprus were founded by Russian tech entrepreneurs and investors. VC firms such as Fastlane Ventures, Cabra VC, Run Capital, Haxus and SQL Ventures have already secured successful exits.

Looking forward, Cyprus is developing strong ties with one of its closest neighbours, Israel, one of the world’s leading startup centres and the fifth most innovative country in the world. There is real synergy between the two nations. Cyprus can provide support to Israeli startups and access to the EU market while working hand in hand on tech initiatives. An example of such initiatives is the recent decision by Israel’s IDC college and its founder Prof. Uriel Reichman to set up a not-for-profit innovation and entrepreneurship graduate school in Paphos. With the full support of the municipality and mayor Phedonas Phedonos, the school is aiming to be a graduate school in innovation for Eastern Mediterranean nations including, but not limited to, Cyprus, Greece, Israel, Egypt, Jordan and the Palestinians.

At the same time, Cyprus is stepping up its promotional campaign in Israel where it hosts frequent conferences and meetings. The next event is The Cyprus Famagusta Investment Roadshow at the Hilton Tel Aviv on 2nd December.

Cyprus’s dedication to fostering innovation is reflected by a number of incubators, accelerators and innovation centres supporting all aspects of technology and product development. These businesses and non-profit organisations include:

  • Chrysalis LEAP, a Cleantech Accelerator and the official organiser of ClimateLaunchpad for Cyprus and Greece.
  • IDEA, a non-profit incubator-accelerator acting as an innovation centre for entrepreneurs and that has already hosted 48 start-ups .
  • Gravity, and incubator that fosters and propels innovation.
  • Diogenes Business Incubator UCY, the high technology business incubator of the University of Cyprus that commercialises R&DI results by creating business value.
  • Cyprusinno, a non-profit organisation and social startup venture, that uses entrepreneurship as a peace-building mechanism to bring Greek and Turkish communities together and create a platform fostering innovation.

The Cyprus Citizenship programme was also promoted at the Funds Summit. Various sponsors, including heavy weights such as KPMG and Deloitte, had brochures of the programme. In addition to real estate, qualifying investments for the citizenship programme also includes AIF and RAIFs such as VC or PE funds investing in Cyprus businesses. This can be a tremendous boost for financing innovation and a real opportunity for new candidates to the Cyprus citizenship programme to engage in the development of Cyprus as a tech centre. Our sister company Shorex Capital is actively involved in advising HNW clients on the citizenship programme.

Altogether, the Funds Summit was a remarkably well organised event and an eyeopener on the potential and ambitions of Cyprus at becoming a key investment platform and innovation player for the Mediterranean region.

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Philippe Gelin

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