Is the digital nomad dream over in Lisbon?

Good morning there,

Several years back I spent a few weeks a year working in Lisbon and was hooked by the good weather, the people and the city’s vibe. In the years that followed it became somewhat of a hotspot for digital nomads looking for an escape from duller climes.

Portuguese locals when I was there were happy with what the influx of foreigners brought to the area. But fast forward to today and things have changed — and Lisbon isn’t quite the go-to for remote workers it once was. In today’s big story I ask whether the city’s digital nomad dream is over.

Elsewhere, we’ve just let loose our latest podcast on the airwaves. In this episode, editor Amy speaks to DeepL founder Jarek Kutylowski about how his AI startup took on Google Translate — and won. Listen here — or hold tight for a condensed write up on Monday.

Also today: 

• How to help your startup’s ‘old guard’ and ‘new guard’ get along.
• AI robotic limb startup Esper raises $5m to develop next generation sensors.
• Sifted Scout: 20 smart grid startups to watch.

— Miriam Partington, reporter

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Is the digital nomad dream over in Lisbon?

Between 2018 and 2020, I spent a few weeks a year in Lisbon at one of the offices of the publication I worked for. As soon as I arrived I was charmed by the friendly locals, pastel coloured buildings, seemingly endless sunshine and sea views. Already, there were hordes of tourists walking the cobblestone streets at the height of summer and remote workers filling up cafes — it felt like the start of a period that would see Lisbon become a digital nomad hotspot. 

That said, the city didn’t feel overcrowded, and local business owners told me they were happy with the increased presence of foreign visitors.

That sentiment has changed a lot in the last six years. The estimated number of digital nomads arriving in Lisbon per month peaked at 20.8k in October 2021, as lockdowns in Europe eased. Since then, media headlines have blamed nomads for rising accommodation costs, a lack of housing and for changing the character of the city; not everyone I spoke to thinks that’s fair, given that nomads make up a small percentage of total residents in the city of 505k people — which received 6.6m tourists in 2023. 

But now a new trend appears to be taking hold. The estimated number of digital nomads arriving in Lisbon per month dropped to a low of 3,000 as of May this year, according to data from Nomad List, a platform that tracks nomad activity. Some digital nomads tell me that Lisbon — which topped various leaderboards for being the top digital nomad destination globally last year — is becoming less of a go-to place. People are instead opting for places in Spain, Morocco and Albania.

So, what gives? 

Nomads — who I’m told are typically looking for affordable locations to travel to, given how frequently they country hop — are being deterred by Lisbon’s rising costs (not just for accommodation, but for restaurants and other services) as well as the growing feeling that they aren’t welcome. 

But not everyone agrees that Lisbon’s popularity is waning. Some suggest that the city — as well as other places in Portugal such as Porto and the Algarve — is still a desirable destination. Flatio, a short-to-mid term rental platform in Lisbon, tells me that prices for apartments have actually gone down on its platform in the last 12 months.

“Lisbon is a great place for a fresh start and I have been seeing a lot of people including myself starting projects and businesses that would have been too daunting to start, for example, in London, simply because it's so expensive,” says digital nomad Inja Schneider. She adds that while housing isn’t cheap, it’s still comparatively cheaper than many other cities in Europe.

“My main concern is how it is affecting the Portuguese. Every local I have met in this past year has been incredibly friendly, be that in a shop or if you ask anyone a question […] they seem nearly too nice, given what is happening in the country, with the tax system favouring expats and the ratio between the average Portuguese income vs. housing [being] at this point completely out of order.”

The Portuguese government, which set up several initiatives to lure in foreigners, has backtracked on some of its policies: it scrapped parts of its Golden Visa programme — which allowed foreigners to move to Portugal if they bought real estate, giving many people a fast-track ticket to EU residency. It also put an end to the non-habitual tax residency (NHR) — which allowed individuals to have a flat income tax rate of 20% on most types of income earned in Portugal and was a pull for digital nomads.

Remote work experts are keenly aware of the impact an influx of nomads can have on a place, and are increasingly working with governments to make digital nomadism more sustainable. One idea is to decentralise the digital nomad population from major cities and spread them out across several locations. On the surface that sounds like a good idea — but locals should be included in those conversations.

Digital nomad Hayley Knight, who recently spent a month in Porto, thinks spreading out nomad locations could “take pressure off bigger towns and cities”. But it could also be hard on smaller towns that “don’t have the infrastructure to support that kind of tourism.”

That’s why governments need to plan in advance to manage newcomers, rather than acting when they start to arrive in droves, says Anna Maria Kockanska, founder of The Remote Impact, a remote work consultancy that is setting up a nomad project in a coastal town an hour from Barcelona, subject to approval. 

“To launch projects in rural destinations, you need budget. So the way local governments can support is to collaborate with nomad leaders and organise events [and] invite guests for free so they can promote the destination,” she says. “It helps spread the idea that we don’t need to have everyone in one place.”

There are examples of where this has worked. The digital nomad village in Madeira set up in 2020 is often touted as a success story for how to attract and manage nomads for the benefit of the local economy.

So, what might the future hold for Lisbon? Will it continue to be a top digital nomad hotspot — or will nomads flee to other Portuguese cities? And for new hotspots, what infrastructure needs to be put in place to avoid the negative aspects of increased nomadism? I'd love to hear from you.

Dig into the full feature here for what local business owners, remote work experts and digital nomads have to say on the matter. 

— Miriam Partington, reporter

🦾 Esper Bionics, a startup developing AI-assisted robotic prosthetic arms, has raised $5m. The device is built with specially designed muscle sensors that the company says allows users better control and dexterity than others on the market — but founder Dima Gazda tells Sifted Esper’s not in the prosthetic limb business. 

• Instead, the company is using its robotic arm as a testing platform to develop sensors for next generation wearables and implants, which Gazda says opens up “way bigger” revenue opportunities. The round was led by YZR Capital, with participation from EBRD and U.Ventures. 

🇫🇷 Just weeks after French social app BeReal was acquired by gaming company Voodoo, layoffs have been announced. Former BeReal COO Romain Salzman posted on LinkedIn that “a chunk of the team was made redundant” — and shared a list of 28 employees (primarily in engineering and product roles) now looking for new roles. 

💰 Also in France, Paris-based AI startup Dust has raised a $16m Series A led by Sequoia.

What’s new in Greek tech?

Our latest report brings insider intel from founders, investors and senior executives about the fast-growing Greek startup hubs and the trends taking shape, to find out how the Greek tech ecosystem is really doing in 2024. 

👴 ‘Us’ versus ‘them’. When new experienced leaders join your startup, it’s easy for the ‘old’ guard’s noses to get out of joint. And if the ‘new’ guard also don’t feel like they fit in, it’s no good for anyone. So, what can founders do? Leadership coach JooBee Yeow has some tips on how to help everyone get along. 

⚡️ Sifted Scout: 20 smart grid startups to watch (Sifted Pro subscribers)

💊 How AI startups working on clinical trials for cancer could find a breakthrough before big pharma (Sponsored by Debiopharm Innovation Fund)

📣 Readers, we want to hear from you. What’s the best thing on European tech you’ve read recently? Drop us a line.

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