For over a century, Luxembourg worked to transform itself from a small rural country into a mecca for business and finance. Now over half a million people from all over the world call Luxembourg home, it is a noted finance centre, and in 2017 management consultancy Deloitte coined the country “the gateway to Europe.”
We’re a small market that is quite representative of the European market.
Now it wants to be the gateway to Europe for Canadian startups. Leaders of Startup Luxembourg, the brand for the country’s tech ecosystem, are on a trade mission to Canada, including a stop at Collision 2022, to entice Canadian founders to launch in Europe through Luxembourg.
Speaking with BetaKit, Startup Luxembourg coordinator Jonas Mercier explained the benefits of launching from Luxembourg and how Canadian startups can access support systems directly from both the public and private sectors.
What sectors does Luxembourg prioritize most when it comes to innovation?
We have six different sectors, each connecting to bringing more digital solutions and services: Industry 4.0, clean tech and smart cities (including smart mobility), healthtech, logistics, space, and financial services.
A key point that’s very important to the government is that each sector is part of a circular economy that is sustainable, and each pillar supports the others.
The main objective of the government is to build a data-driven economy and engage private companies to be part of this new era. Why? Because Luxembourg is a small country and we can easily see that we cannot waste space or energy, so we have to think about our economy as a circular solution.
What are some examples of innovation-supporting initiatives for startups in Luxembourg?
For around 20 years now, the government has tried to build this ecosystem, first with public initiatives. After that, the private players came and launched their own incubators and programs.
One program I can mention is Fit 4 Start, which is the national flagship accelerator program. It’s a six-month coaching program that addresses four different tracks: ICT, healthtech, space, and high-performance computing (HPC). We work with internationally renowned coaches for the program, have up to €150,000 in funding, and offer free office space during the program.
It’s a very interesting way for international startups to get a first foothold in Europe and then connect with the ecosystem.
We also have funding opportunities, some public and some private. For instance, we have the Digital Tech Fund, which is a fund that invests exclusively in Luxembourg startups. And we have another fund, Orbital Ventures, that invests in space companies, and the Luxembourg Future Fund, which invests directly or indirectly into VC funds to stimulate innovation. Then there’s a program that provides aid for young innovative enterprises of up to €800,000.
Does Luxembourg go out of its way to build European connections in a way other countries don’t?
We have a very international business community. Luxembourg is a small country, so on day one companies here have to go international because our market is interesting but not big enough.
We speak multiple languages because there are three official languages in Luxembourg—French, German, and Luxembourgish—but English is widely spoken and is the language of the business community. Almost half of our population is also made up of foreign nationals: roughly half of our workforce is made up of cross-border commuters.
So Luxembourg is the most international country in Europe. Coming into the European market, the single market, could be very important for a startup. But there are different countries, different cultures, different languages, and being established in a country with people speaking multiple languages from all over Europe makes it easier to build your international team.
We’re a small market that is quite representative of the European market, which is a key element for startups. In a way, it’s Europe on a small scale, and it could be interesting to test your product here before entering the big markets such as Germany and France.
And our size allows us to accelerate all the connections we have. I’ve heard from many entrepreneurs who came to Luxembourg that it’s very easy to access key decision makers. In both the public and private sectors, we can connect you with the right partners and the right players.
I think this is important because, for startups, time is important. Through Startup Luxembourg, you can easily reach the right incubators, the right people at the Ministry of the Economy, or the right corporates to start working with.
What’s a misconception Canadian founders have about doing business in Luxembourg and Europe?
Regulation is seen as something very strict, and that can be a problem for companies coming from outside Europe (GDPR, for instance).
But I have to say, for the Luxembourg innovation ecosystem, it was not an issue, but a question in a way. We realized that having the right experts explain to you the regulatory framework stopped this from being a problem.
What process would a Canadian company need to follow to launch in Luxembourg?
There are two parts to it: business registration and joining the startup ecosystem.
Registration is through the House of Entrepreneurship, which is an administration managed by the Chamber of Commerce as a public-private entity. You go to this House of Entrepreneurship to ask questions and open your company. They will follow you on your journey and tell you what you need. This is a form of partnership to create your company, to know about business permits, and so on. This is the first step.
After that, Fit 4 Start will put you in touch with the local ecosystem. You will have free offices and have money to stay in Luxembourg for at least six months. So it’s the best option for startups coming from far away into Europe.
Find out why Luxembourg is your ideal base for growth in Europe.
Photo courtesy of Luxinnovation.
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