In 1418, an expedition financed by Henry the Navigator, Prince of Portugal, stranded on Porto Santo, from where the island of Madeira was visible. It was not until two years later that an expedition to Madeira was mounted. Around 1452, the first slaves were shipped to Madeira from Africa and the Canary Islands, while Funchal had been founded not long before that. At first, Funchal consisted of a few farm settlements, but the rise of sugar trade rapidly increased the town's population. It is though that Madeira's capital was named 'Funchal' because of the abundance of fennel (funcho) that was growing in the area.
It is said that in 1478, Christopher Columbus sailed into Funchal to buy sugar, but there no evidence was ever found to prove that. The sugar trade, however, made Funchal a rich city and it was occasionally called 'little Lisbon' for its prosperity and its elegant buildings. Because of its marvelous natural harbor, its unique climate and an excellent geographical position, Funchal's population grew rapidly. Between 1493 and 1514, Funchal's 'Sé' Cathedral was built by Gil Eanes. The cathedral is nowadays the most central point in town and represents one of Madeira's numerous treasures. In 1514, Funchal was created a see. At the time it was Portugal's third-largest city with a population of over 5000.
Funchal's wealth attracted not only entrepreneurs, but also pirates and the city was attacked several times. To protect Funchal in the future, a fortress and city walls were constructed, but the city's prosperity declined and the walls were not finished until 1542. In 1566, the Frenchman Bertrand de Montluc overran Funchal's defenses easily with a large band of well-armed men. The fortress, named São Lourenço was taken as easy, because it didn't have any cannons, as the city could not afford them. The French pillaged the entire city, stealing everything they could move to their ships. The only building that was spared this fate was the cathedral. After the raid, Funchal's defenses were upgraded and the city slowly regained its prosperity. After wine replaced sugar as largest export product, Funchal became even richer than it had ever been before.
Many of the wine merchants were British, who had come to Madeira to avoid a ban on the export of all non-British goods to the American colonies. Madeira was not covered by the ban, so the merchants could export its wines. These rich British merchants were responsible for many of the marvelous mansions that give Funchal its rich and elegant atmosphere and also for many of its gardens, for which Madeira is now famous.
In 1852, mildew killed some 90% of the island's wines. Re-growth of the vines was slow and in the 1870's, phylloxera, a vicious vine disease came to the island from the Americas, destroying Madeira's wine industry. Phylloxera-resistant vines were planted, but the island never regained its former glory.
The trade of bananas and tourism saved Madeira. Many of the hotels that now dominate the western part of Funchal were constructed to accommodate tourists.
Funchal is located in an absolutely unique area. The amphitheatre of Funchal city begins at the harbor and rises almost 1200 m high on gentle slopes. This provides a natural shelter and was what once attracted the first settlers. Funchal can easily be explored on foot and most sights are concentrated on and around the ocean-front, within 1 km (0.7 miles) from the cathedral.
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