Interview with Tiago Mendes Gonçalves
Focused on leading digital transformation with Artificial Intelligence and creating the right solutions for what businesses need, Tiago Mendes Gonçalves is betting on high-demand areas such as energy and banking. But he is also keeping a close eye on the booming opportunities in Defense. With the US and Europe as target markets, he aims to reach €50 million in revenue—double the current figure—in three years. He explains to SAPO how he is shaping InnoWave’s path to get there.
At a time when artificial intelligence is taking on an increasingly strategic role in organizations, InnoWave has presented its vision for the future with the launch of the NEXT strategy. This ambitious plan aims to accelerate AI adoption across every aspect of the company—from optimizing internal processes to creating value for clients and partners. With a €1 million investment and a goal of reaching €50 million in revenue by 2028, the company is positioning itself to deliver services that integrate technology across the board, structuring its action on six pillars: talent, ecosystem, customer value, operational excellence, governance, and communication. In an interview with SAPO, InnoWave CEO Tiago Mendes Gonçalves shares the company’s vision and future, the expected impact, and the challenges of leading digital transformation with AI at the core.
Innovation has always been InnoWave’s way of doing business, and now the company is heavily focused on Artificial Intelligence (AI). You are investing €1 million in this area. How will that materialize?
TG: Yes, innovation has always been our positioning, and with the new generations of AI, this is a huge opportunity—a disruption to our business model and the industry as a whole. The investment has several components: internal capability building, reskilling, training, and tools to ensure every InnoWaver has access to the best in technology. There’s also a sales component—our entire sales, services, and marketing offering is being redesigned.
So it’s a full 360.
TG: Exactly. The AI transformation plan we created is truly 360. It covers everything: internal processes, people, service offerings, what we sell, and integration with the community around us. We are part of an initiative called AstroLab, an AI startup accelerator in partnership with Ground Capital. This investment also flows through AstroLab, staying close to the startup and entrepreneurial ecosystem.
This investment in AI is not about replacing people but the opposite, right? It breaks the paradigm that AI will take our jobs; instead, it might transform them for the better. What added value do you expect from the teams?
We are optimistic and believe AI is here to augment capabilities. Recently, we worked on a client proposal where, in just a week and a half, a team of 10 people with only a few hours of work achieved what would normally take 10 times longer and much more effort. We’re seeing this across communities, in software, testing, everything we do—AI is already delivering massive productivity gains. That’s what we believe: it’s not replacement, it’s enablement. It allows us to be far more productive and deliver solutions that scale much faster.
AI is already bringing us massive productivity. It’s not about replacement; it’s about enablement.
And also about reaching much further, right? You’re making major investments in both the US and India. Those are two very different locations.
TG: Yes, and we actually started earlier, back in 2012, with a local presence since 2018. We decided to invest in India to support US business growth, so the timing was aligned. We believe India is a unique talent pool in the world, much like Portugal, but with a scale effect we don’t have. That’s why India is so important for our business. The US is where we see the biggest opportunity: it’s a large market like Europe, but more uniform and consistent. In Europe, every country is very different, and entering a new one takes a lot of time without the same scale effect. The US moves at a different pace, and in the medium to long term, it’s a very investment-friendly geography with fast decision-making.
And you haven’t felt the effect of this administration?
TG: Not at all. Everything continues to run smoothly. We have a subsidiary there; it’s a local company.
How many people are in the US?
TG: That’s a tricky question because of our model. In each geography, we have a small core team of full-time employees—around six or seven in the US—but over 60 people are working for the US market, mostly from Portugal. Although we planned to leverage India for the US, we haven’t used it much there. The US business is largely supported out of Portugal, with over 60 people, accounting for roughly 30% of our revenue.
So India is more of a talent hub, while the US is the client side. What type of solutions are you selling in the US?
TG: From the beginning, we’ve had a strong presence in Telco, but in recent years, the European telecom market has faced challenges, and now we’re seeing some of that in the US. We initially focused on telecom operators, which is our core competency, and we still do. The US market is different, more segmented between cable and mobile operators, and we’ve targeted tier-2 operators instead of the largest ones, as they are easier to enter. There’s less competition at the start, and they’re still much larger than any Portuguese operator. Our long-term goal is to move into tier-1. A year ago, we also entered the energy sector, working with a renewable energy operator spun off from Goldman Sachs. People say Trump doesn’t favor this area, but we haven’t seen that. The energy transition is massive, and the investment has to happen. Just look at AI: in the US, the biggest bottleneck isn’t money, data centers, or chips—it’s the ability to generate energy at the required scale and connect it to power those data centers. With the AI market expanding rapidly, energy is a critical factor.
The US market is largely supported from Portugal, with over 60 people and accounting for about 30% of our revenue.
And are you seeing that same need for energy in Portugal, or is it not as pressing?
TG: In Portugal, we work with leading energy players, but the transformation here is driven less by data center demand—though there are major investments underway, like in Sines. The energy sector has undergone a massive business transformation in recent years, similar to what telecom went through 20 years ago. They’re becoming more digital, not just producers, and are investing heavily in digital transformation. It’s a huge opportunity.
InnoWave used to have about 80% of its business in telecom. What’s the share now under this new business plan?
TG: Three or four years ago, as European telecom faced challenges, we started investing more in financial services, insurance, and energy. Today, telecom makes up 55%, financial services and insurance are up to 27%, and energy accounts for over 10%. The vertical breakdown has changed significantly.
And is the goal to make energy the largest share or balance things out?
TG: We are focusing more on financial services and insurance because there’s a lot of work to do there. We’re also doubling down a bit more in Portugal to build cases and presence, then scaling abroad. Those sectors will grow the fastest, but in the short term, our strategy emphasizes financial services and insurance.
The biggest bottleneck for AI expansion isn’t money, data centers, or chips; it’s the ability to generate and deliver energy at scale to power those data centers. With the AI market boom underway, energy is critical.
And what services are you offering to insurance and financial services?
TG: These sectors are investing heavily in digital transformation, especially in Portugal, where the 2012 crisis left them lagging. Now that their business models are stable, they are catching up, and leading in digital is crucial. They face fierce competition from fintech startups, which are less regulated and have some advantages but also drawbacks. Traditional financial institutions must maintain legacy systems, often very old and expensive to modernize, while dealing with heavier regulation. Competition is everywhere, and they need to accelerate digital investment to survive.
That’s true across the entire digital landscape. Everyone is fighting to survive.
TG: Exactly. Telcos don’t want to be just smart pipes and are competing with media players like Netflix. Banks compete with fintechs. Insurers with startups offering innovative insurance models. Corporate survival today requires accelerated growth. It’s not about selling more or less—it’s about survival. That urgency is good for those in the sector; it’s a way to help, grow, and use technology to drive business.
And InnoWave is a facilitator of that transformation?
TG: Yes, that’s our positioning: helping clients disrupt their business using cutting-edge technology, leveraging it with innovation, and understanding what technology can actually do. It’s not innovation in a PowerPoint; it’s delivering real business solutions.
Currently, telecom makes up 55%, financial services and insurance 27%, and energy over 10%.
That requires deep knowledge, not just of technology but also of business sectors. How do you recruit talent that can cover both sides?
TG: That’s an excellent question and our biggest challenge. We need to know the client’s business as well as they do (and when we enter new sectors, it takes time to gain that knowledge), and on the tech side, we must stay constantly updated. Every day brings new developments, so we must continuously invest in monitoring, testing, and piloting technologies. Our teams dedicate part of their time to this ongoing investment to understand what’s coming. It’s a kind of curation, finding the right tech for each business problem because no single technology solves everything.
The hard part is identifying the best fit for each situation.
TG: Exactly. It’s specialized work—finding the right technology to solve the specific business problem in the right way. That’s our space in services. Interestingly, big techs are now creating AI services units because they realized that simply providing technology isn’t enough—they need to build business-specific solutions for their clients.
We need to retain more talent. Every time we lose someone who has contributed here, it’s a huge loss.
With digitalization and AI transformation driving demand for in-house tech departments, does InnoWave also face challenges due to a limited talent pool in Portugal?
TG: Yes, recruitment challenges have been constant in recent years. Competition is good—it forces everyone to improve. Clients today are highly sophisticated in tech, raising the bar for us to stay ahead. Talent competition is also fierce. Younger generations are drawn to startups and tech companies, which plays in our favor compared to traditional jobs. But with Portugal now a hotspot attracting startups and development centers, competition for talent is intense. That forces us to be better, which we see as positive.
And have you been able to retain talent at InnoWave?
TG: It’s always difficult in Portugal’s tech sector. Compared to peers, I think we’re doing better, but we’re far from where we want to be. We must retain more. Losing someone who has contributed here is a huge cost. Our challenge is to attract the right people, retain them by developing, challenging, and ensuring they grow while they’re here. People don’t just look at salary; the right people want challenges, ambition, and solving complex problems. Keeping them at InnoWave depends heavily on our ability to offer that growth and those challenges. Salary matters, of course, but in this field, salaries are far from minimum wage.
What’s the average salary?
TG: In this area, the minimum is above €1,450 net. For €1,300, no one will come. Entry-level salaries are around €1,400+ net and grow from there.
In this field, the minimum is above €1,450 net. For €1,300, you won’t hire anyone.
Almost double Portugal’s minimum wage (€870).
TG: Exactly. The issue isn’t minimum wage in tech; it’s growth. One major challenge is taxes, but the bigger challenge is growing and creating value with the right clients to generate the returns needed to pay the right salaries.
How many people does InnoWave currently employ?
TG: A little over 400 globally.
In 2022, you aimed for 500. Has that goal shifted?
TG: We reached 480 a year and a half ago, but the telecom slowdown led to some reduction. Now, we expect to grow again. One major change in recent years is that we expect growth to come more from value creation than headcount. We aim to grow revenue faster than people.
What’s the revenue target?
TG: This year, €26 million. We’re slightly below target now; last year, we did about €22 million. But I believe the second half will be strong. We’ve closed and are closing several deals that will drive growth. Our three-year plan is to reach €50 million by 2028. The key is having the right people and developing them—it’s not just about headcount. Hiring cheaper talent without potential doesn’t create value. Our main metric is revenue growth, not just staff count.
We started in software and software protection over a year ago, but we’re now launching a more structured, strategic focus on Defense opportunities.
Defense is getting a lot of attention in Europe right now. Are you interested in that space?
TG: You’ve read our mind. We began looking into it a few months ago and are taking some strategic steps. We already have service offerings that are directly relevant, such as cyber, which we’ve been focusing on in Defense for over a year, especially in software and software protection. Now we’re starting a more structured, strategic process to tap into Defense opportunities.
More in critical infrastructure defense or actual warfare?
TG: We see two key immediate competencies: cyber and IoT combined with AI. That intersection is where we want to focus. These are areas we already have expertise in and believe are highly relevant today.
Do you see any specific market leading in this area?
TG: We don’t see a need to deviate from our existing market strategy: Europe and the US. There’s currently a strong European push in Defense, so we’ll likely follow our usual model: start in Portugal and Europe, then expand to the US. Immediate opportunities look more European, but we won’t lose sight of the US.
In how many countries does InnoWave operate?
TG: With a physical office, local company, and management team: US, Belgium, UK, Portugal, and India. We also do business in other countries from these hubs—Germany, for example—and have delivered projects from New Zealand to Iceland. We have a presence in Singapore via a client partnership, and some tactical presence in the Middle East.
So most of your revenue still comes from outside Portugal?
TG: Yes, though it’s dropped from 80% to about 70% due to building FSI capabilities in Portugal initially. But over 70% of our business is abroad.
Which country generates the most revenue?
TG: Currently, it’s between the US and the UK. Belgium has dropped a bit due to telecom. Germany is stable. But in the next two to three years, the US will dominate. Our goal is to have over 40% of revenue coming from the US by 2028.
Where are you based in the US?
TG: The company is incorporated in Delaware. HQ is in Washington, D.C. (or nearby Virginia). Our biggest clients are in Denver and Florida, with HQ in New York and a tech team in Florida and Spain. It’s the picture of a global world—teams everywhere. Most services for the US are still delivered from Portugal.
The brand has also been growing. Is that a priority for InnoWave?
TG: Yes, and there’s a lot more to do. We need to grow and become more visible because credibility, track record, and client presence open doors to new clients. That visibility is strategic.
Who are your main competitors?
TG: In Portugal, Accenture and sometimes Capgemini in consulting and tech transformation. Occasionally NTT. In the US, we compete a lot with global Indian companies, sometimes Deloitte and Accenture, but especially Infosys and TCS.
What’s InnoWave’s main competitive advantage?
TG: In the US, it’s speed, agility, execution, and credibility. We’re neither the cheapest nor the most expensive, but the US market needs external expertise due to scale and labor costs. Compared to Indian firms, we clearly differentiate on productivity, speed, and quality. With large-scale projects where size matters, we sometimes couldn’t compete. AI changes that—scale matters less now. With the right tech and know-how, we can compete where we couldn’t before.
We grew a lot through acquisitions, but moving forward, growth will be mostly organic—internal investment in people.
That requires a lot of training, right?
TG: Yes, lots of training, innovation, tech development, and delivering solutions. Indian players lack incentives for productivity due to their labor-intensive, low-cost model. But the market is shifting, and that’s our big opportunity. It’s no longer about size—it’s about the right people creating the right value.
And the right companies, too. You’ve also grown through acquisitions…
TG: Yes, but I think that will be less moving forward. Acquisitions take time, cost money, and cultural integration is challenging. With headcount size becoming less relevant, our growth will now be primarily organic—investing in people and internal capabilities.
In terms of tech as well? Easier to build than buy?
TG: Yes, because we already have the technologies we need. Some past acquisitions were to gain scale quickly and add specific competencies. Now we believe we have those internally, and accelerating internal investment is easier. Cloud, AI, cyber, Web3, distributed tech—we already have these capabilities. Growth now is about investing in our people and solutions, not acquiring external companies.
So this €1 million investment is just the first step in the NEXT program?
TG: Yes, this is ongoing. The program runs at least three years, until 2028, but our investment is continuous. We’re constantly investing in business development, sales, service offerings, and partnerships. AI is an added layer. Including all of that, it’s easily another €2 million on top.
Cyber and Defense have been getting a lot of attention lately. Is Portugal and Europe doing enough, or are we waking up too late?
TG: It’s hard to say. Europe had a reality check, which is good, but catching up to the US will take years. I’m optimistic. Historically, when Europe decides to compete, it succeeds—look at Airbus, aerospace, banking, and the euro. I believe this is a wake-up call, and in 4–5 years, we’ll be in a much stronger position. Defense has traditionally been a strategic US area driving major technological advances with civilian benefits. This new European focus is a huge opportunity.
In Europe, we always have more regulation than the US or China, which slows us down, but it builds trust. Long-term, that creates value.
And what are the main challenges and opportunities for InnoWave’s future?
TG: The challenge is leveraging this AI disruption. Many companies will disappear—including some of our clients—which is both a risk and an opportunity. With the right tools, know-how, and solutions, we can scale faster than ever. The game now is value creation and innovation, not headcount or cost per head. People talk about unicorns with one employee—the potential for value creation has never been higher. Our challenge is to create value and scale using what technology already offers.
Could the AI Act be a roadblock?
TG: In Europe, we have more regulation than the US or China. It slows us down, but it builds trust and a society we want to live in. That brings long-term value
And could the AI Act be a stumbling block on that path to the future?
TG: In Europe, we always have a bit more regulation than the United States or China, and that makes it harder to move at their speed under the rules we have. But there’s also a level of trust that’s important to maintain, and that’s where Europe is different. I believe that in the long run, this will bring value.
But innovation doesn’t stop at borders. Europe is right between two major blocs—the US and China—that have no regulation, that innovate, that use artificial intelligence, where AI evolves by the hour… Isn’t there a risk that Europe will be so cautious that it won’t even get into the game?
TG: There is that risk, but we have to be consistent with what we want to be and the society we want to live in. Europeans are different from Americans and Chinese, and we need to stay consistent with the society we are building. That society requires certain rules—not just in AI, but also in how we deal with sustainability, for example. Americans don’t care as much, but we do. We don’t need to change; we need to stay true to building the society we want and feel good living in. Others may gain some advantages and create a different society—with more deepfakes and more polarization. By taking those accelerated paths, they may see short-term gains, but in the end, they’ll have a society we don’t want for ourselves.
Nor the Chinese one…
TG: In China, there are major advances in artificial intelligence, but also in citizen control to ensure people “behave well”… I don’t want to live in that kind of society, so we don’t have to follow that path. We’ll see what that growth brings to each society, but I think they will build societies we wouldn’t want to live in, even if in some cases, in the short term, it looks like they are a bit ahead technologically.
It’s a matter of time, and we’ll build something stronger and more solid.
TG: Look at Europe’s economic growth: there are excellent examples of achieving results without sacrificing individual freedoms, culture, education, or environmental protection. The Nordic countries are great examples of how, within a democracy and with our rules, we can still compete globally. So I think we have to be optimistic, follow our own path, and not be overly influenced by what others do. Of course, we should also be pragmatic—keep the necessary regulation and remove the unnecessary.
Does the fact that InnoWave is present in Europe, Asia, and the United States help maintain this balance?
TG: Yes, and we believe we can contribute a little to bringing a more European mindset to the United States and, in some cases, a more American mindset to Europe. Asia is different, India is different, the Middle East is very different, but we can help smooth out those differences, bringing the best from each region.
Source: SAPO
