There are three sources of cash for startups: customer money, investor money, and government money. The first one comes from many individuals or clients in small payments, the second tends to come in larger payments but from fewer individuals, and the last often comes in a single large payment from a single source. There are always exceptions with large client contracts and equity crowdfunding.
The first one only requires a company to have a decent product to sell. The second has strict expectations, and for startups, they can be overwhelmingly demanding. Profit, traction, and returns are king when dealing with investor money. The third is support from Local Government whose target is helping enterprises to grow. Malta Enterprise (ME), the economic development agency of the Maltese Government, is the key facilitator for FDIs that are setting up in Malta. ME has been instrumental in assisting CityFALCON’s expansion to the island and setting up its EU headquarters in the country.
Why a new regional headquarters?
First, let us explain why we were looking for a new regional headquarters in the first place.
The simplest answer is that CityFALCON is growing, and we need more minds to help us grow sustainably. We already have a development office in Ukraine and several remote workers scattered across the planet, but we need more people, preferably in one place, to keep up the growth.
There is also the issue of Brexit. Brexit negotiations are still ongoing, and they’re causing all kinds of uncertainty. No matter what happens, from a second referendum to an extension to crashing out with no deal, there is going to be uncertainty. Preparing for the worst, we want to maintain continuity within the EU, a bloc of about 450 million potential customers and employees. (That’s the post-Brexit figure, too). Even if there is a complete turnaround and the UK decides not to leave the EU at all, we still need more space, and, quite frankly, London is really expensive.
So, we’ve been on the lookout for a host nation for a new office. We needed one within the EU, which left us with 27 nations to choose from. There were plenty of good candidates, but Malta seemed like our best option. The deciding factor was the country’s support in setting up the operations.
Why we chose Malta?
There are business reasons, climatic reasons, cultural reasons, linguistic reasons, and lifestyle reasons we chose Malta.
Lifestyle and climatic reasons are closely tied together. The weather’s nice and the views are gorgeous. The architecture ranges from the ancient to the modern, and there’s influence from several cultures that have interacted with the islands since antiquity. The culture is also an amalgamation of various time periods and peoples, making for an interesting place. The geologic architecture, i.e., the landscape, can also be breathtaking, with attractions like the Azure Window gracing many desktop and phone backgrounds.
The weather can be a bit warm for some, but that’s exactly why so many EU citizens, especially from the northern areas and in the winter, flock to the country for tourism. We decided one great way to entice EU workers to relocate to the new headquarters would be to give them that climate all the time, so Malta beat out some of the top contenders with cold weather.
The linguistic and business reasons we chose Malta include the co-official status of English, the use of the Euro, the open relations with the EU as a member state, and the government’s friendliness towards innovative tech companies.
For better or worse, English is the de facto language of business, tourism, technology, and most things international, so a country with a strong English base was necessary. A country with English as an official language made that choice much easier. Moreover, since the new HQ will also be our R&D centre, where we will be pursuing research into natural language processing, understanding, and generation across multiple languages, we expect to hire native speakers for some projects. These people will inevitably come from outside Malta. We wanted our people to feel comfortable in their new home, so English as a common language was high on our list of priorities.
Of course, the use of the Euro makes cash flow management much easier, as we don’t have to worry as much about exchange rate risk. The Malta office’s expenses can easily be matched to Euro-spending customers rather than relying on pounds or dollars. It also means our employees can easily travel throughout the EU on vacation, adding just one more reason for new members to join us at our new headquarters.
Finally, regarding the IT-friendly environment, Malta has cultivated an image as the Blockchain Island. This isn’t directly relevant to us, but the country is now also trying to cultivate an image as the AI Island, which is much closer to our mission. The government has released several national goals for 2020, part of which we intend to assist the country in achieving.
Malta’s Goals and how we will help in meeting them
Since this new HQ will double as our R&D centre, we expect to bring researchers in data science, linguistics, and computer science into the country.
Two other goals are reaching 55% of jobs designated as “knowledge-intensive” and 50% of enterprises as innovative. We currently employ about 35 people, and we plan to triple that number over the next few years. Since much of that growth will be at the Malta entity, we’ll be adding knowledge-intensive jobs to the country’s economy. We’ll also be giving Maltese students the opportunity to work in a knowledge-intensive field and hone sought-after skills while remaining in their home country.
Looking to the future
We appreciate the Maltese government’s faith through Malta Enterprise in our company, and we look forward to many years of mutual growth, benefit, and cooperation. We realise we are only one company in an entire country, but we hope our contribution is positively felt by the Maltese people. With our new HQ and R&D centre in the country, we look forward to stamping some of our intellectual property and products with “Made in Malta”. (Well, labelling, since we don’t have anything physical to stamp!).