European Startups
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he European Startup scene is bustling and thriving. Aside from London, Berlin, and Stockholm, other tech hubs are emerging such as Paris, Munich, Zurich, and Copenhagen. With the surge in tech talent on the continent, tech behemoths such as Google, Facebook, and Amazon are all expanding their European tech hubs. A study by the Boston Consulting Group shows that the Benelux, Baltic, and Nordic countries of the EU are digital frontrunners and rank well in IT infrastructure, internet access, and government activity in Internet-related activities. These countries generate 8% of their GDP from internet commerce. This trend is forecasted to generate 1.6 million to 2.3 million jobs from 2015 to 2020. In total, the continent has around 57 tech unicorns. Manish Madhvani, the managing partner at GP Bullhound, said, “It has often been said that European tech entrepreneurs are focused only on exits, they are too quick to sell, and they are therefore incapable of building serious technology and companies of genuine scale. We believe otherwise. Our research into Europe’s billion-dollar technology companies has shown that there is an army of ambitious entrepreneurs building businesses of serious scale across the continent.” According to data from PitchBook’s Q3 European VC Investment report, Spotify is top regarding valuation, having an astounding $8.84 billion valuation.
United Kingdom UK is home to at least a third of Europe’s tech entrepreneurs and research from GP Bullhound shows that the European tech unicorns are on the rise and may soon have its first $50 billion tech behemoth. The UK has 22 startups with a valuation of $1bn or more, and four of these 22 startups are considered to be unicorns: Deliveroo, the 92 europeanbusinessmagazine.com
food-delivery startup; Improbable, a virtual-world developer; Mimecast, a cloud-based email company; and boohoo.com, a fashion retailer. British startups have been a favourite of Silicon Valley investors. For 2017, a whopping $1.13 billion is expected to be invested in UK startups. Brexit is not seen to be a threat to the rapidly growing startup scene. Sherry Coutu who co-founded Silicon Valley Comes to the UK, said, “With some of the best global talent and a strong culture of entrepreneurship, the UK and Silicon Valley are two of the world’s leading places to start and scale a technology business. While London has grown to become Europe’s largest tech hub, we still have a way to go to emulate the success of Silicon Valley, and there is a lot we can learn from each other. It is no surprise to see that British tech firms continue to attract more venture capital investment from the Bay area than any other European country.” The only risk to a hard Brexit is regarding skilled labour. London’s tech startups rely heavily on software and IT developers and engineers from Eastern Europe. Statistics show that in London, more than 20% of London startup employees are from other countries.
Germany Earlier this year, Delivery Hero went public on the Frankfurt stock exchange with a valuation of over $5 billion. This made Delivery Hero the second largest IPO that was backed by venture capitalists. This could spur more investments in European tech firms. Germany has around seven unicorns, and six of them continue to experience rapid growth. In the mid-2000s, there were less than 30 tech startups. Now there around 2500 startups in Berlin. Other large startups to hail from Berlin include Foodpanda, Soundcloud, Wooga, ResearchGate, and HelloFresh.
France Paris is a bright spot for startups. With Macron at the helm, he has promised to turn France into a “startup nation” by lowering corporate and capital gains taxes. This could spur further venture capital flows into the country. Paris has recently opened Station F, which is a startup campus and home to incubator programs such as those of Facebook and Microsoft. Recently, Partech Ventures and Idinvest Partners, which are major venture capitalists in France, have increased their venture funds and are closing major fundraising deals in the country. Benoist Grossman, the