European technology companies have undeniably entered the global stage to compete with tech made in Silicon Valley. While the United States is still home to 4 times the amount of tech companies worth more than 1 billion USD (so-called “unicorns”), Europe is catching up at speed and breeding unicorns faster than the US ever did. The growth rate in 2021 outpaced the rate of its unicorn peers overseas by a staggering 100%. A study published by tech M&A advisor i5invest and growth accelerator i5growth also reveals the importance of US capital invested into European unicorns, with US investors making up 48% of unicorn cap tables in Europe. A look at the continent’s soon-to-be unicorns reveals hints at what to expect in 2022 including some interesting trends.
With 85 new unicorns created in 2021, Europe currently counts 132 tech companies that have a valuation of at least 1bn USD. Comparing numbers to the historical development of unicorns in the US, Europe’s total account is almost at the level of US unicorns in 2020 (152). Europe’s top 5 highest valued unicorns are Klarna (EUR 37.5bn; Sweden), Checkout.com (EUR 35.4bn; UK), Revolut (EUR 27.8bn; UK), Northvolt (9.7bn; Sweden) and Global Switch (EUR 9.6bn; UK), revealing a clear FinTech focus at the very top. With 41 unicorns in the UK, 25 in Germany, 23 in France, and each 6 in Sweden and Austria, these countries are the Top 5 homes to unicorns. Looking at all European unicorns, FinTechs have the highest average valuation with EUR 3.89bn, followed by their peers from EdTech, Marketing and HR, on average valued at EUR 2.70bn.
On average, a European unicorn has a valuation of EUR 3.1bn, funding of EUR 562.7M, created 1,027 jobs and is 10 years and 4 months old. Within just 10 months, Gorillas, a grocery delivery service founded in Berlin, went from 0 to 1bn in valuation and stands out as the fastest unicorn ever created in Europe.
The report also reveals that 48% of the investors on unicorn captables originate from outside of Europe, predominantly from North America. US funds with the most European unicorns in their portfolio are Accel (19 unicorns), Index Ventures (12), Tiger Global (10), and TCV and General Atlantic (9 each).
While data on unicorns can be researched online with reasonable effort, data on the soon-to-be unicorns is much harder to find while all the more interesting when trying to look into the future. The publishers of this report have asked European investors to name the expected soon-to-become unicorns from their portfolio, resulting in a list of 253 names predicted to achieve a valuation of USD 1bn within the next 24 months. On average, a European soonicorn has a valuation of EUR 285.8M, funding of EUR 121.5M, created 311 jobs and is 8 years and 7 months old.
The predominant industry focus among soonicorns is FinTech, followed by AI & Big Data and Life Science & HealthTech, and the UK dominates the ranking of countries home to the most soonicorns (73), followed by Germany (52), France (32), Switzerland (19), the Netherlands (13) and Austria (12).
On average, unicorns are 21 months older than soonicorns in Europe, hinting at how quickly we might expect a sharp increase in the number of unicorns. 39% of the investors on soonicorn captables originate from outside of Europe, with US VCs Index Ventures (15 soonicorns), Accel (12), FJ Labs (10), Tiger Global and Salesforce Ventures (both 7) leading the ranking of most soon-to-be unicorns in their portfolio.
Regional Insights: Estonia, Croatia, Czech Republic, Lithuania, Poland, Romania
With 3 new unicorns created in 2021, the total number of unicorns in the region rises to 4 – Bolt in Estonia (the region’s most valuable unicorn with a valuation of EUR 74bn), Rohlik.cz in Czech Republic, Vinted in Lithuania and DocPlanner in Poland. On average, a unicorn in the region has a valuation of EUR 4.0bn, raised 651.9M in funds, created 1799 jobs and is 10 years and 9 months old. To compare, Romania’s former unicorn UIpath was valued at EUR 35bn before it went public in April 2021.
The region is also home to 4 promising companies with the potential to enter the unicorn club in the next 24 months – PVcase in Lithuania, Brainly in Poland, DRUID in Romania and Oradian in Croatia. On average, they are valued at EUR 272.8M, have raised EUR 40.4M in funding, created 188 jobs and are 8 years old.
The investors with the most regional unicorns in their portfolio are Russian funds enern and Kaya with two investments each, while German fund Point Nine leads the soonicorn ranking.
“In total, uni- and soonicorns in the Eastern Europe have created 8,000 jobs to date. Given the promising soon-to-be unicorns in the pipeline, we expect to see a continued economic impact of tech startups in the region in the next 24 months”, predicts Herwig Springer, CEO of i5invest.
Overall, Eastern Europe sees significant influence by non-local investors with nearly a third of the region’s investors coming from the US. Local investors headquartered in the region only represent a fifth of all investors.
About the 2022 European Unicorn Report
Published by Tech M&A Advisor i5invest and growth accelerator i5growth, the 2022 European Unicorn Report lists and ranks 132 uni- and 253 soonicorns and reveals insights and trends that allow an outlook into the future. While tech made in Silicon Valley still dominates the international unicorn news, the publishers want to shine the spotlight onto European peers that are catching up at unprecedented speed, creating technology impact well beyond Europe. The full report can be downloaded for free at www.europeanunicornmap.com
Source: i5invest and i5growth