A surge in enterprise capital exercise has led to the delivery of those billion-dollar firms. Final yr noticed VCs again European startups with a file €32.four billion (round $35.5 billion), in keeping with PitchBook’s 2019 Annual European Enterprise Report. Not solely did this surpass 2018’s peak of €24.Three billion, however it additionally represented a rise of 620% from 2009’s complete.
German fintech supplier N26 was the primary firm to cross into unicorn territory in 2019, with a $300 million spherical in January. A July extension of that spherical introduced N26 to a $3.5 billion valuation.
Whereas Germany includes a big chunk of Europe’s unicorn steady—insurtech startup Wefox and low-cost coach operator FlixMobility additionally breached the 10-figure valuation final yr—nearly all of the continent’s unicorns are based mostly within the UK. Medtech companies CMR Surgical and Babylon Well being and fintech startup Rapyd have been among the many six new British unicorns.
The unicorn stampede is being pushed by a surge in mega-deals, which in flip has been pushed by a glut of capital. European startups introduced in a complete of €8.58 billion throughout 40 offers of €100 million or extra in 2019—almost tripling 2018’s €3.16 billion of mega-deals, in keeping with PitchBook knowledge. The variety of VC-backed transactions, nevertheless, has been on the decline—sliding from 5,929 offers in 2018 to five,017 final yr—displaying that the ever-increasing pool of cash is being distributed throughout much less transactions.
VC traders, in distinction, aren’t reaping the identical advantages as startups from this newfound exuberance. Exit ranges for VC-backed firms hit their lowest level since 2013, exiting €14.7 billion through 472 offers, in keeping with PitchBook knowledge. The earlier yr noticed a whopping €52.9 billion in exit worth, however with huge exits like Swedish audio-streaming large Spotify’s direct itemizing and Dutch funds supplier Adyen’s IPO accounting for a big chunk of that complete. IPOs, particularly, took a success in 2019: Swiss biotech startup ADC Therapeutics canceled its itemizing in October amid the WeWork fiasco and the poor performances of Uber, Peloton and others.
A low rate of interest atmosphere and an abundance of dry powder—some $25 billion—has resulted in startups being priced for perfection. With extra capital chasing fewer offers, startups that in any other case could not have been funded, not less than at their present valuation, are receiving investments. And with European VC dealmaking displaying no indicators of slowing, the area’s unicorn steady is simply set to develop.
Beneath is a map illustrating European nations’ most precious unicorns, in addition to probably the most useful VC-backed startup in these which don’t but possess a billion-dollar firm. Hover over any of the nations on the map to see the present valuation and headquarters:
Featured picture through pishit/iStock/Getty Pictures Plus