The term "unicorn," originally intended to describe the rarity of startups valued at more than $1 billion, is no less than finding a mythical animal in reality. But according to CB Insights, the number of unicorn companies in the world has exceeded 1,000 so far, of which 70% in 2021 has increased by 70% and nearly 400 new ones, and it is no wonder that some media have called 2021 the "year of the unicorn".
The largest percentage of unicorns from the United States is still the largest percentage of unicorns, compared to the proportion of European unicorns, about 13%, but has shown impressive growth in the past year.
36Kr overseas recently launched the globalization handbook series - Europe Special Topic, which introduced entrepreneurial opportunities in European countries such as Germany, France, Italy, northern Ireland and showed the style of Europe's core market. European unicorns are similar to other regions, such as the hottest track is also financial technology, but also unique, there is no shortage of companies from small countries and global footprints. The term "unicorn" has a long history in European mythology, but now it refers to these young companies in the limelight, and through them they may also provide readers with an entry point to understand the European science and technology ecosystem.
The European science and technology innovation ecology with a higher and higher sense of existence
From the perspective of growth rate, financing scale and overall ecology, the European science and technology innovation market has gradually been comparable with the United States. According to the "State of European Tech 21 Report" jointly launched by European venture capital Atomic and the science and technology innovation conference Slush, the total financing of European science and technology innovation enterprises in 2021 exceeded 100 billion US dollars for the first time, which is nearly three times that of 2020; and in the financing round of less than 5 million US dollars in the world in 2021, European companies accounted for 33% and the United States accounted for 35%, showing that the early start-up ecology in Europe has been comparable to that of the United States.
Looking at the situation of European unicorns alone, the financing and volume received in 2021 have increased several times. According to Crunchbase statistics, investment by European unicorns nearly quadrupled year-on-year in 2021, totaling nearly $50 billion for 185 rounds, compared to just 11.8 billion in 2020. The number of new unicorns also increased more than fivefold in 2021, from 23 in 2019 and 15 in 2020 to 86 in 2021.
Source: Crunchbase
- Tech Hub UK and High Speed Track FinTech
According to CB Insights, as of April 5, 2021, there are 140 unicorn companies in Europe, distributed in 19 countries and 15+ industries.
The country that has incubated the most unicorns is the United Kingdom, with a total valuation of about 190 billion US dollars, worthy of the title of European science and technology innovation center; followed by Germany and France, which rank first and second in the EUROPEAN Union in GDP, with 26 and 24 unicorn companies, with a total valuation of about 71.9 billion US dollars and 54.9 billion US dollars respectively. At present, some European countries do not have local unicorn enterprises, including Greece, Hungary, Portugal, Iceland and so on.
Among the three countries of Britain, France and Germany, the $40 billion payment company Checkout.com is the highest valuation unicorn in the United Kingdom, second only to the "overseas version of Huabei" Klarna in Europe; celonis, a process mining and executive management software company, has a valuation of $11 billion, the highest valuation unicorn in Germany; and the latest unicorn valuation in France is doctorlib, a medical technology platform, with a valuation of $6.4 billion.
From the industry point of view, fintech companies are the most popular, with a total valuation of $250 billion, accounting for more than half of the total valuation of European unicorns, and occupying the top four valuations: Klarna from Sweden, Checkout.com from the United Kingdom, the new bank Revolut and the cryptocurrency service platform Blockchain.com (see the chart below).
In addition to fintech, e-commerce and software services are also popular tracks. A total of 17 European unicorns come from the e-commerce and DTC sectors, of which the highest valuation is the two second-hand trading platforms, the French refurbished electronic equipment trading platform Back Market and the Lithuanian second-hand clothing and household goods trading platform Vinted; 14 belong to the Internet software and services field, and the British video conferencing platform Hopin ranks first in valuation.
Other areas where unicorns have been born include healthcare, automotive and transportation, artificial intelligence, data management and analytics, supply chain, logistics and distribution, and more.
Focus on the development of subdivided tracks, and some are particularly eye-catching in 2021. For example, in the booming grocery delivery under the epidemic, two German grocery delivery companies Gorillas and Flink have completed several rounds of financing in 2021 and quickly promoted to unicorn companies within months of their establishment; NFT and cryptocurrency unicorns have also completed multiple rounds of financing last year, such as French football NFT game Sorare and Austrian cryptocurrency trading platform BitPanda.
- Local and overseas investment institutions are equally divided
For highly valued European tech companies, investment from home and abroad is almost equally important. The 2022 European Unicorn & Soonicorn Report, released earlier this year by Austria-based international technology M&A & i5growth, concludes from a table of ownership structures for these companies that about 40 percent of investors in Europe's highly valued companies come from outside Europe, mostly from the United States and a small number from China, Russia and others. In the case of European investment institutions, they prefer to invest in companies in the country/region where their headquarters are located, such as in the German-speaking region (DACH, including Germany, Austria and Switzerland) and nearly half of the investors of unicorns and quasi-unicorns are also from the region.
Crunchbase has counted the active investors of European unicorns by the number of investments, and the US venture capital Accel and Index Ventures are far ahead, with 60 and 45 investments in European unicorn companies, respectively. Other active investors include Balderton Capital in the UK, Eurazeo in France (32 investments), Nortzone in the UK (31), and many more.
Crunchbase counts active investors in European unicorns, excluding unicorn companies that have exited and are not headquartered in Europe
It is worth mentioning that Tencent is also quite active in Europe, with 22 investments in European unicorn companies. Some of the European unicorns tencent has invested in include: Qonto, a new French bank, MONZO, a British digital bank, Voodoo, a French video game developer and publisher, Flipdish, an online ordering system for irish food and beverages, and Lydia, a French mobile payment platform.
- The main exit path – IPO
In addition, i5invest & i5growth's report also takes stock of former European unicorns that are no longer privatized. The average time it takes about 1 year and 11 months for these companies to go from promotion to unicorn, most of them exit through IPOs, accounting for about 70%, and some of them have been acquired or bankrupted. The largest exit in European history so far occurred in 2018, when Sweden-based music stream spotify went public in New York and had a market capitalization of $26.5 billion on that day.
A leader in popular tracks
The three industries mentioned above that europe has incubated the most unicorns are fintech, e-commerce and software. Here are the unicorns whose valuations lead the way in these three popular industries, some from core markets such as Britain, France and Germany, and some from small European countries such as Lithuania. Taking them as an example, we can more vividly see the growth path of European start-ups.
- Fintech
Klarna Sweden Round Unknown Valuation $45.6 billion
Founded in Stockholm in 2005, Klarna is the world's first buy-before-pay (BNPL) company, offering merchants and consumers a variety of payment options, including installments, cash on delivery, direct payments and more. The Klarna Card physical card was also recently launched in the U.S. for consumers to use installment payment services online or offline. According to its website, the company currently employs about 5,000 people and serves 147 million active consumers and 400,000 merchants in 45 countries around the world, including Europe, the United States and Australia.
In addition to payment, Klarna is also striving to become an e-commerce channel brand, providing merchants with marketing, sales channels and operation management services, and consumers can also complete grass planting, order management and logistics tracking through Klarna. 36Kr has had a detailed introduction and exclusive interviews with him.
According to CB Insights, Klarna is currently the fifth-largest unicorn in the world, behind ByteDance, SpaceX, SHEIN and Stripe. Klarna was reportedly the idea that came up with the three founders when they participated in the Stockholm Business School competition, and although they did not get a good place in the competition, the three founded Klarna and grew all the way, gaining the favor of many investors, including Sequoia Capital, SoftBank, Ant Group and so on.
Checkout.com UK Series D is valued at $40 billion
Founded in 2012, London-based payment platform Checkout.com is dedicated to providing one-stop payment services, including gateways, acquiring, payments, risk control and payment processing. The company's main markets are in the EmEA region, and it has recently expanded into the US market.
Checkout.com's main competitors include Stripe, Adyen, etc., and its CEO once said in an interview that the difference with other payment companies is that Checkout.com only do corporate payments, mainly serving large merchants, customers include Netflix, Farfetch, Grab, NetEase, SheIn and so on. Checkout.com also provides services to a number of fintech company unicorns, such as Klarna, the new bank Qonto, Revolut, etc., as well as cryptocurrency platforms such as Coinbase, Crypto.com, etc., and is also further exploring the application of Web3 direction.
According to its website, Checkout.com currently employs 1,700 people in 19 countries. After completing a $1 billion Series D round in January this year, the company has raised a total of $1.8 billion, with a valuation of $40 billion. Corporate investors include Insight Partners, Tiger Global, DTS Global, GIC and more.
Revolut UK Series E is valued at $33 billion
Headquartered also in London, digital bank Revolut is dedicated to creating financial super-applications. When it was founded in 2015, Revolut mainly provided transfer and currency exchange services, and now offers a variety of services such as mobile banking, card payment, remittance, foreign exchange, and users can also invest in stocks and cryptocurrencies within its app.
In addition to Europe, Revolut is also expanding into international markets, already entering the United States, Australia and Japan. According to its website, Revolut currently has 18 million individual users and 500,000 enterprise users.
In 2021, Revolut completed a $800 million Series E round of financing, with a cumulative financing of $1.7 billion, including SoftBank Vision Fund No. 2, Tiger Global, TCV and others.
- E-Commerce &DTC
Back Market France Series E is valued at $5.7 billion
Founded in 2014, Back Market is a refurbished electronics trading platform headquartered in Paris, France. In terms of publicity concept, Back Market emphasizes changing the electronic consumption model and reducing the generation of e-waste, hoping to make refurbished machines the first choice for technology consumption.
Back Market as a platform itself does not refurbish the machine, but chooses a third party to cooperate, and the product is refurbished and delivered by a certified third party. Back Market rates the appearance and technical condition of used electronics into three categories: "better", "good" or "fair, good" (Excellent), and users can have a 30-day return period and a 1-year warranty after purchase. According to the company's data, the product "failure rate" is about 4%, that is, one in every 25 machines is not operating as expected, and it estimates that the failure rate of new machines is about 3%.
Back Market currently employs approximately 650 people and operates in many European, U.S. and Japanese markets, with approximately 6 million users having purchased products on Back Market. Back Market's investors include Aglae Ventures, Eurazeo, Daphni, Generation Investment Management, Transatlantic Capital and others.
Vinted Lithuania Series F is valued at $4.53 billion
McKinsey has estimated that the circular economy in Europe could generate net economic benefits of €1.8 trillion by 2030. Founded in 2008 in Vilnius, Lithuania, Vinted is also a second-hand platform for circular economy, selling second-hand clothing and household items.
Vinted's philosophy is similar to Back Market's, and it wants to make second-hand shopping the first choice. Vinted strictly limits the categories of goods on the platform to fashion and household items, and adheres to the C2C model, not accepting brands or retailers to sell their second-hand goods on the platform.
Currently operating in 12 European countries and North America, there are about 45 million users selling or buying second-hand products on the platform, according to its website. When shopping on Vinted, the buyer pays a "Buyer Protection fee" for each transaction based on the price of the item, and can request a refund if the item does not match the description or is damaged.
Vinted investors include EQT Growth, Accel, Insight Partners, Lightspeed Venture Partners, and others. Wallapop, another Spanish second-hand trading platform similar to Vinted, also raised about $190 million in 2021, valuing it at $840 million.
Vilnius, Lithuania
Sorare France Series B is valued at $4.3 billion
Sorare is a fantasy soccer game and an NFT trading platform. Players can sell or buy digital player cards, collect their own teams to participate in matches, and transactions are recorded on the Ethereum blockchain.
Sorare earns money by issuing player cards and does not currently take a cut from player trades. Its player cards are divided into four categories: "Limited", "Rare", "Super Rare" and "Unique", each with a different number of releases. One of Sorare's biggest competitive advantages is its partnership with football organisations, which, according to its website, is officially licensed by 233 football clubs, including Bayern Munich, Barcelona, Real Madrid and many more. Barcelona star Gerald Pique is also one of Sorare's investors and serves as a strategic advisor to Sorare.
According to TechCrunch reported in September last year, player cards traded on the platform since january last year are worth a total of about $150 million, there are about 600,000 registered users on the platform, and about 150,000 users buy player cards or organize their own teams every month.
Founded in 2018, Sorare received a $680 million Series B funding round led by SoftBank Vision Fund No. 2 last year, valuing it at $4.3 billion. Sorare's other investors include Atomico, D1 Capital, Eurazeo, Benchmark, Accel and others.
- Internet Software & Services
Hopin UK Series D is valued at $7.75 billion
Under the epidemic, many activities have to shift to pure online or online and offline hybrid mode, and Hopin positioning is an online event management platform, users can hold activities on the platform to accommodate 500,000 to 100,000 people, and sell event tickets, analyze event data, etc. In 2021, Hopin made a number of acquisitions, including live video platform StreamYard, offline event service provider Boomset, event marketing platform Attendify, etc., to enrich its products and services.
Founded in the UK in 2019, Hopin reportedly had just 8 employees in 2020, up from around 800 last year, all working remotely. In August last year, the company estimated annual recurring revenue to be about $100 million.
Hopin's founder, Johnny Boufarhat, who is only 27 years old, said in an interview that he believes that future events will be "hybrid", taking place both online and offline. Boufarhat expects Hopin to be available in the next 2 to 4 years.
In 2021, Hopin completed Series C and Series D financing, with a cumulative financing of about $1 billion and a valuation of $7.75 billion, with investors including Accel, Institutional Venture Partners, Tiger Global Management, LinkedIn and so on.
Personio Germany Series E is valued at $6.3 billion
Personio is an online HR management platform based in Munich, Germany, which TechCrunch describes as a "Workday for SMEs." Personio mainly serves European SMEs with functions including recruitment, onboarding, separation, payroll, attendance, etc., while also expanding human process automation services.
According to its website, Personio has 1,200 employees and about 6,000 customers. Personio's investors include Index Ventures, Accel, Lightspeed, Northzone, Global Founders Capital, and more.
The epidemic has made it necessary for enterprises to manage employees online, and Personio, founded in 2014, has also taken advantage of this to complete Series D and E financing in 2021, with a cumulative financing of more than US$500 million and a valuation of US$6.3 billion.
BrowserStack Ireland Series B is valued at $4 billion
Testing websites and apps is becoming more complex for companies because of the variety of devices, operating systems, and browsers used by Internet users. BrowserStack's cloud test platform facilitates developers to comprehensively test the functionality, performance, and visual rendering of websites and mobile applications.
BrowserStack was founded in India in 2011, but its international headquarters are located in Dublin, Ireland. Ireland's corporate tax system has also attracted many multinational companies, including Google, Apple and so on, to set up their European headquarters here.
According to the BrowserStack website, the company currently has 950+ employees, about 5 million developers on its platform, and 60 million tests per month. BrowserStack reportedly has more than 50,000 paid customers, including Google, Amazon, Microsoft, Twitter, Spotify, etc., and about 60% of customers are from the United States.
Seven years after its inception, BrowserStack completed a $50 million Series A round in 2018. In 2021, BrowserStack completed a $200 million Series B funding round, valuing it at $4 billion. Investors include BOND, Insight Partners and Accel.
concentrate:
- Due to the different reports and platform statistical methods, the number and distribution of European unicorns from the data sources cited in this article are different, and the main reference data for this paper is CB Insights - The Complete List Of Unicorn Companies (as of April 5, 2022).
- The European countries referred to in this article include the countries of the European Economic Area (EEA), as well as the United Kingdom and Switzerland.
Wen | Shi Yi
Editor| Zhao Xiaochun
Figure | Unsplash