This report confirms what we’ve been seeing from our customers: the EU tech ecosystem is on fire. 5 years ago, you could fit all of the continent’s unicorns in a dining room and decry Europe's missing tech giants. Today, you'd need an auditorium with 321 seats and you'd hear a completely different story. And one in five European unicorns are now a fintech. PSD2, financial services passporting, and open banking are all examples of the wave of entrepreneurship that directly benefits Europeans.
As wider economies have been challenged, the tech sector has welcomed a wave of new talent and new ideas. The pandemic has undoubtedly boosted the online economy and entrepreneurship, and in addition we are seeing larger fundraises become the norm, as some of Europe’s more established tech giants reach truly global scale.
The data of 2021 shows a remarkable increase in VC investments in startups, more than double in comparison to previous year Q3, as well as a tripling of the amount of exits in several sectors. Actually the largest IPO of 2021 is from the EU, UiPath. European startups no longer have to envy US startups. European unicorns have also become the new normal, with the number of unicorns almost doubling in 2021.
The future looks even brighter with institutional investors starting to invest in Deep Tech startups, like the example of Northvolt. And 2021 has signalled the booming of German speaking countries in terms of exits (overpassing any other European country) and number of unicorns, as well as the emergence of CEE countries as a place for startups to thrive.
The last 12 months have only increased our optimism about the future of European technology. In spite of the damage the pandemic has done to our communities - and it’ll take some time for us to fully recover - we have witnessed a dramatic acceleration in the acceptance and take-up of digital services. Powerful changes in consumer behaviour have hastened the transformation of industries like healthcare and food. Trends that we believed would take 10 years to fully materialise have happened in just two.
Our continent is set up to make the most of that opportunity. We have creative founders with growing access to capital who are ready to meet that burgeoning demand. That perfect storm will inevitably lead to an even stronger pipeline of high-growth, tech-enabled companies.
The continent is attracting more capital, more talent and there are more ambitious entrepreneurs than ever trying to follow in the footsteps of success stories.
Europe might seem like a more complicated market as it's fragmented with different languages and different cultures. However, there are now many success stories in consumer businesses coming from Europe: Ledger, Revolut, Sorare, Vinted etc. Culturally, European founders are more ambitious, they now think global from day one.