European tech 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 peers overseas by a staggering 100%.
A study published by tech M&A advisor i5invest and venture builder 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 top.
With 41 unicorns in the UK, 25 in Germany, 23 in France, and 6 in Sweden and Austria, these countries are the Top 5 home countries of European 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 soon-to-be unicorns is much harder to find while being a more interesting gauge 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 with the potential 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: The UK and Ireland
With 27 new unicorns created in 2021, the total number of unicorns has risen to 44, setting the region far ahead of any other country in Europe.
The region’s most valuable unicorn is Checkout.com (EUR 35.4bn), followed by Revolut (EUR 27.8bn), Global Switch (EUR 9.6bn), Hopin (EUR 6.6bn), and Howden Group (EUR 4.3bn). On average, a unicorn in the region has a valuation of EUR 3.5bn, has raised EUR 534M in funding, created 941 jobs and is 10 years and 5 months old.
The region is also home to 73 companies with the potential to enter the unicorn club in the next 24 months.
On average, a soonicorn in the region currently has a valuation of EUR 316.3M, funding of EUR 122.9M, has created 279 jobs, and is 9 years old.
The investor with the most regional unicorns in its portfolio is Balderton (7), while LocalGlobe leads the soonicorn ranking with 10 investments made.
“In total, uni- and soonicorns in the UK and Ireland have created an incredible 63,000 jobs to date.
“Given the very promising soon-to-be unicorns in the pipeline, we will see a stronger than ever economic impact of tech startups in the region in the next 24 months”, predicts Herwig Springer, CEO of i5invest.
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