The Rapid Rise of the Cyprus Startup Ecosystem on a Global Scale

Cyprus has solidified its position as a dynamic and rapidly growing startup hub, earning significant global recognition for its innovation and entrepreneurship. At the Startup Ecosystem Awards 2025, organized by StartupBlink, Cyprus was honoured with the “Best Worldwide Climb in the Top 50” award, reflecting the remarkable progress of the Cyprus startup ecosystem in fostering a vibrant startup environment.

A Historic Achievement of the Cyprus Startup Ecosystem
The StartupBlink Global Startup Ecosystem Index 2024 ranked Cyprus 45th, marking its first appearance in the global top 50, up nine spots since 2023. The country achieved the largest jump among the top 60 ecosystems, climbing nine places. This distinction underscores Cyprus’ successful efforts in nurturing innovation through strategic initiatives, policy reforms, and financial incentives.

Major cities such as Limassol, Nicosia, Larnaca, and Pafos have also made notable strides in the global rankings, with each featuring in the top 1,000 startup ecosystems. The CEO of StartupBlink, Eli David Rokah, congratulated Cyprus on its innovative policies that continue to accelerate the nation’s startup ecosystem.

And congratulations to the Cyprus startup ecosystem from us as well!

Strong Institutional Support
Cyprus’ impressive ascent in the global rankings can be attributed to its strong institutional framework and government-backed initiatives. The Research & Innovation Foundation (RIF) has played a pivotal role in supporting startups and scaleups by providing targeted funding programs, tax incentives, and talent attraction initiatives.

The Director General of RIF, Theodoros Loukaidis, emphasized the country’s commitment to innovation, stating, “Cyprus has made impressive progress in recent years. We are working to further strengthen our position as a regional hub for research, innovation, entrepreneurship, and technology, acting as a gateway to Europe while offering access to high-growth markets.”

Dr. Nicodemos Damianou, Deputy Minister for Research, Innovation, and Digital Policy, also celebrated the rapid progress of Cyprus’ startup ecosystem, affirming that the country remains dedicated to fostering innovative entrepreneurship and strengthening its role as a technological hub in the region.

A Flourishing Innovation Ecosystem
Cyprus’ startup ecosystem consists of over 500 startups and scaleups, supported by more than 15 incubators and accelerators, 12 universities, seven centres of excellence, and over 12 research institutes employing 3,500 highly skilled professionals. The European Commission has acknowledged Cyprus as a strong innovator on the European Innovation Scoreboard 2024, highlighting its transition from an “embryonic” ecosystem to a “quite dense” one.

Additionally, Cyprus has improved its standing in the Global Innovation Index, ranking 27th among 133 countries. The nation has also secured 32 European Research Council (ERC) grants, seven of which were awarded in the last three years.
Despite its small size, Cyprus has the 18th largest startup ecosystem within the European Union.

Bridging the Gap Between Research and Market
While Cyprus has made significant progress in fostering research and innovation, challenges remain in translating research into commercially viable products and services. Chief Scientist of the Republic and Chairman of RIF, Demetris Skourides, has been actively addressing this issue through public-private partnerships and knowledge transfer initiatives.

One of the key strategies to bridge this gap is the facilitation of collaborations between research institutions and industries. In 2023, a stakeholder roundtable was held to enhance the competitiveness of the Cypriot economy. Events such as the Partner Industry Innovation Day, which gathered over 400 participants from startups, enterprises, and researchers, have been instrumental in fostering commercialization and market-ready innovations.

The focus on intellectual property (IP) strategy has also been a game-changer for startups, helping them protect and promote their patents in international markets. Strengthening the commercialization mindset and encouraging international collaborations remain crucial for scaling up Cypriot startups.

Expanding Global Market Access
International partnerships play a vital role in accelerating the Cyprus’ startup ecosystem. The government has been actively pursuing strategic collaborations with countries such as Israel, Japan, and the United States, facilitating market access for Cyprus-based startups.

With a clear vision for the future, Cyprus is positioning itself to tap into high-growth markets such as the Gulf Cooperation Council (GCC) and the Association of Southeast Asian Nations (ASEAN). By 2026, Cyprus-based startups will have access to markets with a combined population exceeding one billion. The GCC market, in particular, presents significant opportunities, with the ICT sector projected to reach $203.09 billion by 2029. Similarly, ASEAN’s economy, valued at $3.6 trillion in 2022, is expected to continue its strong growth trajectory, reaching $10 trillion by 2030.

Overcoming Challenges in Cyprus’ Startup Ecosystem
Despite its rapid progress, Cyprus’ innovation ecosystem still faces several challenges that need to be addressed to maintain its momentum. Access to risk capital remains a critical issue, with early-stage startups struggling to attract sufficient private investment. Encouraging venture capital, angel investors, and corporate partnerships is essential to scaling promising ideas.

Talent retention is another challenge, as skilled professionals often seek opportunities abroad. Strengthening entrepreneurial education, offering incentives for top talent, and fostering a culture of innovation within universities and research institutions will be key to reversing this trend.
Moreover, entrepreneurs must adopt scalable business models with multiple revenue streams to achieve global success. While Cyprus serves as an excellent testbed for new ideas, startups need to expand internationally to reach unicorn status. To facilitate this, the government is actively building bridges with innovation ecosystems worldwide, offering Cyprus-based companies the support they need to access global markets.

The Future of Innovation in Cyprus
The future of Cyprus’ startup ecosystem looks promising, with a strong focus on artificial intelligence (AI), robotics, and digital transformation. The adoption of AI tools across various sectors – including healthcare, agrotech, ICT, and cybersecurity – is expected to drive economic growth and technological advancement.

At the SAFEVAT Forum, Cyprus showcased over 15 companies utilizing AI and machine learning, demonstrating the country’s strong R&D capabilities. With more than 50 public and private organizations already adopting AI, and the nation boasting 100% 5G coverage, Cyprus is well-positioned to become a leader in digital transformation.

Recognizing the significance of AI, Demetris Skourides emphasized that “Data is the new oil, and AI is the new energy.” The decreasing costs of cloud computing are expected to attract an influx of startups and entrepreneurs, making Cyprus a prime destination for AI-driven innovation.

Conclusion
Cyprus’ impressive rise in the global startup rankings is a testament to its commitment to innovation and entrepreneurship. Through strategic investments, strong institutional support, and international collaborations, the country has transformed into a thriving startup hub.
However, to sustain this growth, Cyprus must continue addressing challenges such as access to risk capital, commercialization of research, and talent retention. By leveraging its strategic location, fostering global partnerships, and embracing cutting-edge technologies, Cyprus is well on its way to becoming a key player in the global innovation landscape.

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