Cyprus is turning public funding into a startup growth engine

Cyprus is no longer a quiet player in innovation. It is now ranked among the top 25 countries in the Global Innovation Index and sits within the world’s top 40 startup ecosystems. For an island economy, that shift matters.

Speaking at Slush in Helsinki, Research and Innovation Foundation Director General Theodoros Loukaidis outlined how Cyprus is building an environment that supports startups from idea stage to global scale.

According to Loukaidis, Cyprus’ advantage starts with policy. The country offers strong tax incentives, one of Europe’s most competitive IP box regimes, and funding programmes designed to cover every stage of company growth. These are combined with a growing pool of local and international talent.

The Research and Innovation Foundation plays a central role. Its programmes begin with grants of €25,000 for future founders and move through pre-seed and seed funding of up to €500,000. Support can reach €2 million for more mature companies.

In recent years, RIF has introduced blended finance schemes such as Boost and Disrupt. These match private investment with public grants, reducing risk for investors while protecting founder equity. The approach has already attracted venture capital, angel investors and corporate interest.

Cyprus’ startup strengths are broad. Fintech and gaming are growing quickly, but activity extends into biotech, artificial intelligence, engineering, shipping and energy. Loukaidis pointed to deep-tech successes, including biotech exits and AI companies raising tens of millions of dollars while operating from Cyprus.

Beyond funding, RIF positions itself as a connector. It supports international missions, including Slush, to help startups meet investors and partners. Many participants have already converted exposure into revenue and investment.

Challenges remain. Access to growth capital is still limited, and commercialisation of research is difficult across Europe. Cyprus is addressing these challenges blended finance programmes, tax incentives, industry-research collaboration programmes, public sector innovation challenges and reforms to support university spin-offs.

Loukaidis believes the fundamentals are in place. Talent is growing. Founders think internationally from day one. Public money is creating leverage for private capital.

Watch the podcast recorded in Helsinki below: