Nations on the rise: eToro’s StartupNations Portfolio

Twenty years ago, The Irish Times published an article illustrating that the start-up culture in Ireland among software companies was actually homegrown, and not the result of former employees of multinational companies setting up these companies. This special start-up culture among small countries, where innovation flows, where new tech companies are sprouting all the time, where the sky’s the limit is something we aim to capture in our new StartUpNations Smart Portfolio. The specific focus of start-up companies in start-up nations lies in the potential for capitalising on these companies’ significant growth in their early years.

What is really exciting about investing in start-ups from smaller nations is that their success stories are as much about the countries facilitating the right environment for growth. 

For example, in Romania, there are a number of factors that make it an attractive place to invest. Living costs are low, businesses can be built inexpensively, and there is a well-educated quality labour force. Although it is one of the fastest-growing economies in Europe, because of its small market, Romanian start-ups mainly focus on catering their products to global markets in order to be successful.

Another country operating in a small market with a global outlook is Israel. This tiny country situated on the Mediterranean coast has always dealt with various challenges, creating a mindset of constantly searching for solutions, and developing critical life skills at a relatively young age. Israel’s well-educated labour force is a large pool for many tech start-ups looking to recruit graduates who have advanced computer programming and cyber security skills at a young age. 

Situated in Central Europe, Switzerland provides a great opportunity for start-ups. Unlike Romania, it is actually expensive to do business in Switzerland. Nonetheless, with its many advantages, such as its prime location, top quality labour force, strong economy, excellent infrastructure and business-friendly legislation, Switzerland is a magnet for new companies.

Not all countries are alike, but, there is something special in each of these small countries which are providing a hub for successful start-ups. Companies from each of these countries — and more are represented in our StartUpNations Smart Portfolio.

Like our other eToro Smart Portfolios, this is a thematic portfolio, which exposes you to a group of assets in specific areas, but is simultaneously diversified so that your investment does not hang on the fortunes of one or two companies. We create these Smart Portfolios with a long-term strategy mindset, however, due to the nature of this specific Smart Portfolio, companies rotate in and out of the portfolio slightly more frequently. 

When putting together the StartUpNations Smart Portfolio, we looked for countries with relatively small populations of less than 20 million people that had an environment which facilitates innovation in which businesses can prosper. In short, we were looking for countries providing that atmosphere where companies could make it big. 

We looked to three resources to find countries fitting this winning mould: Business Enabling Environment, Start-up Friendliness, and IMD World Competitiveness Yearbook. These resources helped us to determine whether the investment climate in a country, its competitive environment, government efficiency, infrastructure and more, would be factors that would help to grow successful start-ups. Utilising the data from these sources, combined with our analysis, we chose countries which are the best candidates for this portfolio. 

All companies included in the portfolio must have been traded publicly for less than five years, in order to capture the high potential growth of a company in its initial stages as well as to maintain the most updated companies as they begin their journey on the public market. Furthermore, we update the portfolio annually with new companies fresh off their IPOs.

The StartUpNations Smart Portfolio is a great way to gain exposure to countries providing just the right culture and environment to support the growth of new businesses. Invest in the exciting world of start-ups with a diversified portfolio, without the usual downside of hanging all of your hopes on only one company.

Invest in StartupNations

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