Venture Capital - Cyprus

Cyprus

Highlights

The country in Cyprus is expected to witness Total Capital Raised in the Venture Capital market market reaching US$319.20m in 2024.
In the same year, the Later Stage market is set to dominate the market with a projected market volume of US$137.00m.
When compared globally, the United States is anticipated to generate the most Capital Raised, amounting to US$136.6bn in 2024.
Cyprus sees a surge in Venture Capital investments, driven by its strategic location, favorable tax regime, and growing startup ecosystem.

Key regions:

Market definitionIn-Scope/Out-of-scopeMarket structureReportsMethodology

The Venture Capital market in Cyprus is experiencing significant growth and development in recent years.

Customer preferences: Investors in Cyprus are increasingly turning to venture capital as a means of investing in innovative and high-growth potential companies. The country's strategic location, attractive tax incentives, and skilled workforce make it an appealing destination for entrepreneurs and startups. Additionally, there is a growing interest in sectors such as technology, fintech, and renewable energy, which are driving the demand for venture capital funding.

Trends in the market: One of the key trends in the venture capital market in Cyprus is the increasing number of funds and investment opportunities. The government has taken steps to promote entrepreneurship and innovation by establishing initiatives and programs that support startups and provide access to funding. This has led to a rise in the number of venture capital firms and angel investors operating in the country. Another trend is the focus on cross-border investments. Cyprus has a well-established network of international business connections and a favorable tax regime, making it an attractive destination for foreign investors. As a result, there has been an increase in cross-border investments, with venture capital firms from other countries investing in Cypriot startups and vice versa.

Local special circumstances: Cyprus has a unique advantage in the venture capital market due to its geographic location at the crossroads of Europe, Asia, and Africa. This allows for easy access to markets in these regions and provides startups with the opportunity to expand internationally. Furthermore, the country's membership in the European Union provides access to EU funding programs and grants, further supporting the growth of the venture capital ecosystem.

Underlying macroeconomic factors: The growth of the venture capital market in Cyprus can be attributed to several underlying macroeconomic factors. Firstly, the country has experienced a steady economic recovery since the financial crisis, with GDP growth and declining unemployment rates. This has created a favorable environment for startups and venture capital investments. Additionally, the government has implemented various reforms to improve the business environment and attract foreign investments. These reforms include streamlining the process of starting a business, reducing bureaucracy, and enhancing investor protection. These measures have helped to boost investor confidence and attract venture capital funds to the country. Furthermore, the availability of skilled labor and a well-developed infrastructure have contributed to the growth of the venture capital market in Cyprus. The country has a highly educated workforce with expertise in sectors such as technology and finance, making it an attractive destination for startups and investors. In conclusion, the Venture Capital market in Cyprus is experiencing significant growth and development, driven by customer preferences for innovative and high-growth potential companies. The increasing number of funds and investment opportunities, focus on cross-border investments, and unique advantages of Cyprus as a business destination are all contributing to this growth. Additionally, underlying macroeconomic factors such as the country's economic recovery, business-friendly reforms, and skilled labor are supporting the development of the venture capital ecosystem in Cyprus.

Data coverage:

Data encompasses B2B and B2C enterprises. Figures are based on the amount of capital raised, the average of deal size and the number of deals.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use data from OECD, annual financial reports of key players, industry reports, third-party reports, publicly available databases, and survey results from primary research (e.g., the Statista Global Consumer Survey). In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, CPI, number of small and medium-sized enterprises (SME), new businesses registered (number) . This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption.

Additional notes:

The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.