Cyprus’ rising tech ecosystem in numbers

New figures and data are reflecting the ongoing development of Cyprus’ tech sector.

Insight in the sector has become ever more important as tech companies are becoming an increasingly significant part of Cyprus’ economy.

Cyprus Tech Ecosystem Map, for example, a live monitoring tool launched by TechIsland in cooperation with Dutch data management company Dealroom, in 2022, shows how the numbers are growing day by day.

And, data collected by CySTAT recently revealed that the Information and Telecommunication (ICT) sector is the fastest growing one in Cyprus. In the last decade, the ICT sector marked an average growth rate of 15% outperforming all other sectors of the economy, the statistical service revealed.

Also, in absolute numbers, the ICT sector's contribution in Gross Value Added (GVA) in 2022 amounted to €2.33 billion. This marked a steep increase of 277% compared to the ICT sector’s output a decade ago. It is also worth noting that there was a large annual increase in the last three years, which experts suggest was driven by the incentives provided by the government to the relocation of foreign ICT companies to Cyprus.

According to Invest Cyprus, meanwhile, by the end of 2022, the impact of international ICT companies on the Cyprus economy surged by 40%, injecting over €3 billion into the economy. Additionally, the arrival of more than 50 international ICT companies by then led to the creation of more than 1,000 new jobs.

The sector’s impact on employment does not appear to have slowed down. Close to 500 more job openings were being advertised on the Cyprus Tech Ecosytem Map as of the afternoon of 20 February.

It is worth noting that the local tech industry is also being supported by public programmes dedicated to adding local brainpower to the sector, including ones coordinated by the Research & Innovation Foundation and Cyprus’ Recovery And Resilience Plan, indicating that, when it comes to this sector, the only way is up.

Besides organising numerous student competitions and events, RIF has specifically designed the PhD in Industry, Post-Doc and R&I Internship programmes, offering career opportunities and prospects to students and postgraduates, encouraging researchers to pursue their goals and pushing businesses towards innovation.

Meanwhile, also according to the Cyprus Tech Ecosystem Map, there are currently 860 startups and scaleups in Cyprus with Fintech being the largest sector in the Cyprus ecosystem (with 194 companies.)

In terms of capital, according to the Map, there are currently 228 investors involved in the ecosystem, although it is not obvious how many of these funds or investors direct risk financing to the local ecosystem. Nonetheless, there are at least two early stage VCs that have been formed to specifically inject capital into the startup scene, mainly the KV Fund and 33East (the fund manager of the Cyprus Equity Fund).

In terms of innovation and frontier tech, there are 605 startups & scaleups waiting for their first investor.

A less positive figure meanwhile, suggests only 18 Cypriot companies currently hold patents. The European Commission’s European Innovation Scoreboard 2023 in its country profile for Cyprus even listed PCT patent applications among the country’s relative weaknesses.

Also read: Eurostat: Value added by foreign-controlled enterprises in Cyprus stood at 15.6% in 2021

Also read: ICT is Cyprus’ fastest growing sector