2018
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The State of
European Tech
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Contents
2018 Key Findings
The State of European Tech 2018
Tech & the European Economy
Diversity & Inclusion
Europe's Got Talent
Tech Hubs
Research & Development
Regulation
Investors & Investment
Great European Companies
Challenges
Mythbusting
Predictions
About
Appendix
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141
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159
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2018
Key Findings
It's been another record year for investment in European
tech and the sector is powering growth in Europe's
stagnant economy. Yet not everyone is benefitting from the
boom. The gains are not being democratized by investors.
Companies need to address diversity and inclusion tools
and unlock hidden talent pools.
Another record year for investment into the European
tech ecosystem
Europe urgently needs to fix its diversity & inclusion
problem
Europe's tech industry is the best hope for growth for
a stalling European economy
The gains from Europe's tech boom are not yet being
democratised
Mobilising Europe's hidden tech talent pool can unlock
huge upside
Europe is producing $B+ companies at a level that is
15x+ higher than a decade ago
Top highlight statistics for Europe
01
02
03
04
05
06
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What's changed for
European tech in the
past 12 months?
KEY FINDINGS
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Another record year for investment into
the European tech ecosystem
Europe urgently needs to fix its diversity
& inclusion problem
Record sums invested in Europe's technology
ecosystem- $23bn in 2018 up from just $5bn in 2013.
93% of all funds raised by European VC-backed
companies went to all-male founding teams in 2018.
There were four tech IPOs or direct listings of European tech
companies in 2018 that reached valuations of more than $5B
on opening day, including Europe's largest ever venture-
backed publicly-listed tech company, Spotify. In total, Europe
contributed three of the top 10 largest tech IPOs globally of 2018.
Almost half of women reported that they have experienced
discrimination in the European tech sector. This is a point
of clear tension with the 75% of respondents who think the
culture at their European startup is inclusive. In European
tech, discrimination appears to be someone else's problem.
CAPITAL INVESTED
CAPITAL INVESTED
TECH IPO COMPANIES
GENDER DISCRIMINATION
$23B
93%
4X $5B
46%
Key Findings
2018
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Eurostat
Europe's tech industry is the best hope for
growth for a stalling European economy
The gains from Europe's tech boom are not
yet being democratised
Europe's tech (software) industry is growing 5x faster than
the rest of the European economy in terms of Gross Value
Added, a level that has accelerated in recent years.
Pension funds are not yet democratising Europe's tech sector
boom - over the last five years, pension funds have invested just
$1.7B in European VC, but have invested 45x more in European
buyout funds, equivalent to more than $75B over that period.
The European tech workforce grew 4% in 2018 (source:
LinkedIn), a significant difference to overall EU employment
growth of 1.1%.
European tech growth and record success has not gone
unnoticed by family offices and high net-worth individuals
(HNWs). Over the last five years they have invested over $5bn
in European venture capital funds. Only government agencies
have invested more in European VC in that same period.
TECH INDUSTRY GROWTH
PENSION FUNDS INVESTMENT
EMERGING TECH HUBS
HNW INVESTMENT
5X
45X
4%
$5B
European Commission
Key Findings
2018
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Mobilising Europe's hidden tech talent
pool can unlock huge upside
Europe is producing $B+ companies at a
level that is 15x+ higher than a decade ago
Europe's ecosystem is more distributed
and more interconnected than ever - there
are now 5.7m professional developers
in Europe, up by 200,000 on 2017. This
compares to the 4.4m in the US, a number
that stayed flat year on year.
European $B+ companies founded in the past 15 years, including
a record 17 new companies that first surpassed the milestone in
2018. Europe has also now produced 12 companies with a $5B+
valuation, of which 5 have grown to more than $10B.
Still more European tech hubs will
emerge. Cities such as Cologne, Warsaw
and Vienna all have larger developer
populations than Stockholm and active
local tech communities, but have yet to
attract as much investment. In fact, there
are 15 European cities with professional
developer populations of 50,000+ that
have seen less than $1B in total capital
investment since 2013.
Two companies founded in the 2000s had reached $B+ by 2008.
Compare that to 31 founded in the 2010s that reached that
milestone by 2018 - an increase of 15.5x. Where will the 2010s
end up by 2028?
PROFESSIONAL DEVELOPERS
$B+ COMPANIES
EMERGING TECH HUBS
SUCCESS GROWTH
5.7M
61
15
15X
Key Findings
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The State of
European Tech
2018
Welcome to the State of European Tech 2018
Executive Summary
01.1
01.2
ARTICLES
This is the fourth edition of the State of European Tech
report, the single, most comprehensive data-driven story
of European technology today. We've gathered data from
world-class data partners and a survey of 5,000 members
of the tech ecosystem, from founders to students,
investors to researchers. We've tried to tell the most
important stories. We cover diversity and inclusion, talent,
regulation, investment, research and development, and the
great, global disrupters out of Europe.
Back once again like
the renegade...er...
data analysers!
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We write this report to shine a light
on the issues that matter in the
European ecosystem. We aim to enrich
conversations, highlight challenges,
and support more informed decision
making by closing the knowledge gap
between perception and reality.
Each year we aim to produce a
resource that is more comprehensive
than the last. To this end, you'll notice
that this report is a lot longer than in
previous years. This was a deliberate
decision. Our data is open, and our
hope is as many people as possible will
use it to help tell the stories that matter
to them in Europe.
We're proud to present the 2018 edition of the State
of European Tech report, which is once again the
single, most comprehensive data-driven story of
European technology today.
It's been another incredible year
for European tech - but there are
some significant challenges too
Welcome to the
State of European Tech 2018
Photo: Anrietta Kuosku
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For the past four years, we've produced an exhaustive deep dive into
the European tech ecosystem by analysing the rich insights of our data
partners. Every year the data busts another myth about our ecosystem:
from pointing out that Europe actually has more developers than the US,
to quantifying European advances in deep tech.
Executive Summary
Another record breaking
year for European tech
European tech
achieving density
Technology has become
a motor for growth in the
European economy
Europe is a research
powerhouse
This year we're at risk of sounding like a
broken record about breaking records
- but we can't dispute the data. In
another extraordinary year, investment
in European tech reached a record
$23 billion - up from $5 billion just five
years ago. European founders created
17 billion-dollar companies. And in
2018, Europe produced three of the ten
biggest venture backed public listings.
Last year we found that Europe was
experiencing a 'Battle Royale' for talent.
This year was the year Europe figured
out how to effectively mobilise its
deep pools of talent. The tech sector is
attracting more participants - whether
measured by the healthy increase in
professional developers or the uptick
in talented executives moving into tech
from other sectors. The report shows
dense areas of talent coalescing around
universities, anchor tech companies,
and innovation hubs, leading in turn
to increases in investment, and
growth in anchor tech companies.
This all contributes to 'density' -
which historically has been a crucial
precondition for explosive growth.
Europe is certainly achieving density,
but it's doing it its own way. What is
interesting is that the developer pool is
growing fastest outside those countries
that have historically attracted the most
investment: Turkey, Spain and Russia's
pool of developers have been deepening
the most rapidly. All this will lead to a
massive potential upside for the wider
European economy as capital eventually
flows into these new communities.
At a macro-level, Europe's technology
sector is booming as the wider
economy is stuck in the doldrums.
As of Q3 2018, European growth was
flatlining at 0.2%, the lowest rate for
four years. Europe's software industry
is now growing at least five times
faster than the rest of the European
economy. This year's report suggests
that for a number of reasons, this
motor will only become more powerful.
The importance of the tech to the
overall economy will only increase.
This year's report also shows
that we are only scratching the
surface of the potential of Europe's
research community, and not fully
harnessing our own cutting-edge
science. An analysis by CERN, one
of this community's most influential
members, demonstrates that as
science and tech converge further,
there is huge scope to strengthen
the link between European STEM
and startups. Europe has a research
community larger than U.S. and China
- we need to make sure this becomes
the hugely powerful differentiator it
should be.
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Let Europe be Europe
A big diversity and
inclusion problem
A word to the naysayers: irrespective
of the huge strides European tech has
taken in the last few years, our tech
sector will continue to be compared to
the performance of Silicon Valley.
And as the ecosystem accelerates,
we are increasingly cool with that! For
a long time, US VC has outperformed
European VC in terms of portfolio
returns, but that is increasingly untrue.
The latest historical performance data
shows that European venture has been
outperforming US venture in recent
horizon periods. We believe this is a
bellwether for a changing landscape.
Let's not forget that 95% of the value
creation of today's US tech sector
is from companies founded 15 years
ago or more, and that the early tech
successes of ARM, Amadeus and Ocado
were not venture-backed. Given that
21 European companies have been
founded and scaled to billion-dollar-
plus valuations with the support of
venture capital since 2010 alone, we are
confident that Europe has caught up on
North America's head start.
This year's report also unearths several
figures which are extraordinary for
all the wrong reasons. The State of
European Tech has always highlighted
the challenges Europe faces, but this
year, we've identified a particularly
serious problem: 46% of women told us
they have experienced discrimination
in the European tech industry. As our
chapter on diversity and inclusion
shows, this statistic is the tip of the
iceberg. While most investment figures
in this report spell good news, the fact
that all-male founding teams received
around 93% of the capital and 85% of
the deals speaks for itself. Women and
minorities are underrepresented at
every level of the ecosystem. Corporate
policy on diversity and inclusion is still
way behind where it needs to be. This
stark reminder of our shortcomings is
timely, and it's important that we draw
the right conclusions.
Reporting this data is a first step in the
right direction. Only by measuring the
problem can you start to solve it. To
take on this challenge, we've worked
with Diversity VC to launch an industry-
first resource: a practical and hands-on
guide for technology entrepreneurs
that will help them build companies
that have diversity and inclusion at
their core. It's not a complete solution,
but we hope it's a contribution that
founders will find useful nonetheless.
You can find the toolkit at
www.inclusionintech.com
Executive Summary
01.2
Photo: Kai Kuusisto
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But we can still learn from
the successes and failures
of others
Another broken record:
Bridge the funding gap,
democratise European
tech's success
An ecosystem irreversibly
changed
Thank you to all our partners
As Europe catches up, it is vital that we
make the most of our second mover
advantage - both in the companies we
build, and in our approach to building
them. European tech has escaped most
of the backlash which has engulfed
big US technology companies and
characterised media coverage this
last year. For this to continue, we'll
need to learn from past failures, and
act ethically from day one. European
technologists have already shown we
can learn from the lessons of the past
in terms of business strategy. Before
he founded Skype, Atomico's CEO
Niklas Zennstrm founded a streaming
company called Kazaa. Kazaa was a
failure, but a group of Swedes led by
Daniel Ek were paying close attention,
and learned important lessons.
Learning from the mistakes of the
previous generation led to the creation
of Spotify. Spotify has unequivocally
proven that today, European founders
can raise the right capital, hire the best
talent, go the full distance, stave off
ferocious competition and win on a
global stage. Spotify will now become
the spur and inspiration for other
European breakout successes.
This report has consistently highlighted
the need to close the institutional
investor funding gap. Over the last five
years, pension funds have invested just
$1.7 billion in European VC, but have
invested 45x more in European buyout
funds, equivalent to more than $75B
over that period. Meanwhile, family
offices and high net worth individuals
have spent the last five years investing
$5 billion in venture capital. If pension
funds can rebalance their allocations
away from legacy industries towards
gamechanging technology instead, they
can democratise access to the spoils of
European tech.
The European ecosystem has levelled
up. Today, as Spotify has shown us,
European founders have access to
sophisticated investors, can hire the
best talent, go the full distance, stave
off ferocious competition, go public
and win on the global stage. Europe is
now reaping the early rewards from the
transformation of its tech ecosystem-
the seeds of success this year were
planted a decade ago. That is why we
should expect even greater success
in the years to come. As long as we all
continue to learn from both success
and failure, will European tech reach
the heights we know it to be absolutely
capable of.
I'd like to dedicate my final words to
thank all of our data partners and most
importantly, Slush and Orrick. Without
them this report would not have been
possible.
Executive Summary
01.2
Tom Wehmeier
Partner, Atomico
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Scrolling through the figures of
the State of European Tech 2018
report, it is easy to feel a nice sense
of confirmation to what we've been
seeing and hearing throughout the
year in countless conversations with
entrepreneurs: European tech is
graduating. Record numbers of both
raised funding and exits speak louder
than words, and they have interesting
consequences.
As the amount of successful scale-up
companies continues to rise on the
continent, so does the need for ever
greater amounts of top tier talent.
As the access to venture capital is
no longer the biggest bottleneck for
European tech, our eyes are turning
towards cultivating the next generation
of world-class talent for the current and
future tech companies that are set out
to solve some of the biggest challenges
on the planet.
For this we need a diverse talent pool to
be part of building the European tech
companies.
The problem of diversity that Europe,
like the rest of the world, is having can
be turned into an opportunity. By lifting
up a more diverse set of role models will
affect the decisions of to-be founders.
Emphasizing the role that humanities
and arts, in addition to STEM, will
play in the future development of
technological solutions should be done
upfront if we want to gain an edge from
the magnificent creative industry in
Europe.
One more additional thing that
Europe really stands to benefit from
is our strong academia. Nailing
the combination of bleeding-edge,
hardcore research and practical, world-
class company building should be one
of our main targets for the upcoming
years.
Almost all businesses that want to
make it big in Europe have to think
international or global from the
beginning. This is a mindset that
we should utilise also in the next
generation of education for future
entrepreneurs. Stay tuned!
A Word from Slush
Executive Summary
01.2
Andreas Saari
CEO, Slush
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There has been a nearly five-fold
growth in European venture capital
investment in the last five years.
There are five times the number of
unicorns with at least 17 new billion
dollar plus companies added in the
past year alone. The European tech
sector has produced nearly four times
the job growth rate of the general
economy, resulting in a talent pool of
programmers and STEM researchers
surpassing that of the United States.
Tech and innovation is no longer on the
sidelines in Europe it is driving the
economy. That's the clear take-away
from this year's State of European Tech
Report.
At Orrick, we see it in our practice
every day as we have helped founders,
investors and corporate venture clients
raise or deploy more than $___ across
Europe over the past year.
As a global tech law firm, we're not
surprised to see investors from around
the world chasing strong returns from
their European investments. While U.S.
investment returned to 2016 levels after
another record-breaking performance
last year, investment from Asia
continued to grow.
We're encouraged by corporate venture
investment growth, particularly from
outside traditional tech industries.
This affirms the strong demand for
innovation as companies in every
sector recognize the need to adapt to
the tech transformation.
Altogether these trends point to a
robust future for European tech.
However, the Report's purpose is
to shine a light on all of "the issues
that matter" in the European tech
ecosystem. We applaud Atomico for
highlighting some deeply troubling
ones: 46% of women in tech report
experiencing discrimination and only
7% of capital went to female founded
companies or mixed gender founding
teams. That's not right and it's not
sustainable if Europe truly wants to
innovate. We also applaud Atomico's
collaboration with Diversity VC to
provide guidance to founder teams on
how to build a diverse and inclusive
culture. Awareness and education
are a key first step. Investors have an
essential role to play. The good news
is that there's an incredible amount
of unfunded talent out there. Let's all
participate in the conversation about
how to dramatically improve next year's
results.
We're grateful to Atomico for the
opportunity once again to help provide
this data to the tech community in
Europe and globally. We hope you
find it as useful as we do in seeing the
patterns and opportunities in this rich
and promising ecosystem.
A Word from Orrick
Executive Summary
01.2
Christopher Grew
Partner,
Technology
Companies Group
Orrick
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While Europe's overall economy and traditional industries
are stuck in the doldrums, booming tech represents
the best hope for growth. Tech firms are powering job
creation and ambitious founders are tackling some of the
world's biggest problems. All of that has members of the
ecosystem optimistic - except in the U.K. where sentiment
is not at the same levels as elsewhere.
Tech & the
European Economy
Powering Workforce Growth
Tech: The Motor for GDP Growth
Heritage as opportunity
Smiles (almost) all round in European techv
Tech for Good: A European Opportunity?
02.1
02.2
02.3
02.4
02.5
Continuing to drive
significant growth
ARTICLES
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French tech workforce growth in 2018,
based on a comparison of the size of
the workforce in October 2018 versus
October 2017.
WORKFORCE GROWTH
France's tech worker population grew at the fastest
rate of any European country in 2018
7.3%
The rate of tech workforce growth across Europe is not equally distributed with workforces in some countries
growing much faster than others. France, for example, hit 7.3% growth in 2018, making it comfortably the fastest-
growing tech workforce in Europe
YoY growth in the worker population of the
Top 20 largest tech workforces by country in
2018
DATASET : 1 1 -20
Source:
L EGEND
2018
Note:
Based on an analysis of sample pool of LinkedIn members and
the difference between those in 2018 working in the Tech
Sector in each country from this sample pool and those in 2017.
YoY growth (%)
3.9%
3.5%
3.4%
3.3%
3.3%
3.1%
3.0%
2.8%
1.9%
1.1%
Finland
Italy
Sweden
United Kingdom
Denmark
Romania
Netherlands
Bulgaria
Czech Republic
Hungary
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
The rate of tech workforce growth across Europe
is not equally distributed, with workforces in some
countries growing much faster than others.
Powering Workforce Growth
02.1
Photo:Jussi Ratilainen
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The implication of this sustained difference in growth rates is starkly visible when looking at indexed growth of the
tech (software) and non-tech parts of the European economy. Over the past 15 years, tech (software) has grown to
hit 194% of its relative value in
Chain linked volumes of tech and non-tech
GVA (indexed 2002-2016)
Source: Eurostat
LEGEND
Tech
Non-tech
Note:
2016 is the most recent year for which full NACE breakdowns of
European GVA are available. Tech refers to the European
software industry, or NACE J62-63. Non-tech is everything
else.
Chain linked volumes (indexed 2002-2016)100
100
107
112
121
133
136
130
136
146
155
163
173
188
194
124
125
118
123
126
128
129
133
141
141
2002 2003 2004 2005 2006 2007 2008 2009 2010
2011
2012
2013
2014
2015
2016
75
100
125
150
175
200
While the long-term historical trend in relative growth rates has been impressive, more recently the speed of
growth between tech and non-tech has diverged even further. Today, the European tech (software) industry is now
growing 5x faster than the rest of the economy
% Growth YoY of tech and non-tech
contribution to European economy by GVA
(2016 versus 2015)
Source: Eurostat
LEGEND
YoY growth (%)
Note:
*Tech refers to the European software industry, or NACE J62-
63
YoY growth (%)3.1%
0.6%
Tech*
Non-tech
0.0
1.0
2.0
3.0
There is an ever-widening gap in the indexed growth rates of the tech (software) and non-
tech parts of the European economy. Over the past 15 years, tech (software) has grown to
hit 194% of its relative value in 2002.
While the long-term historical trend in relative growth rates has been impressive, more
recently the speed of growth between tech and non-tech has diverged even further. Today,
the European tech (software) industry is now growing 5x faster than the rest of the economy
Latest figures show Europe's
software industry Gross Value Added
is growing 5x faster than the rest of
the European economy
ECONOMIC GROWTH
Europe's software industry growth dramatically
outpaces the rest of the European economy
5x
Eurostat
Eurostat
Eurostat
Tech: The Motor for GDP Growth
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Over the last 10 years, many of these traditional industries upon which the European economy is so dependent
have either stagnated or declined, undermining the overall rate of growth in European Gross Value Added
Chain linked volumes of tech and selected
traditional industries GVA (indexed 2007-
2016)
Source: Eurostat
LEGEND
Tech
Real estate activities
Wholesale and retail trade, transport, accommodation
and food service activities
Industry
Financial and insurance activities
Construction
Telecommunications
Note:
2016 is the most recent year for which full NACE breakdowns of
European GVA are available. Tech refers to the European
software industry, or NACE J62-63.
Chain linked volumes (indexed 2007-2016)100
103
98
102
110
117
123
131
142
146
103
107
109
112
118
118
103
88
95
100
103
110
111
94
103
89
90
89
87
90
94
95
83
85
85
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
60
80
100
120
140
Yet the European economy today remains heavily dependent on traditional industries, such as industrial
manufacturing, construction, retail and transportation
Share of total gross value added in Europe
Source: Eurostat
LEGEND
% of total GVA (2002)
% of total GVA (2016)
Note:
Europe is based on EU-28. 2016 is the most recent year for
which full NACE breakdowns of European GVA are available.
Tech refers to the European software industry, or NACE J62-63
% of total gross value added
21%
19%
6%
2%
2%
1%
1%
1%
19%
19%
11%
11%
5%
4%
3%
Industry (except construction)
Wholesale and retail trade, transport,
accomodation and food service
activities
Public administration, defence, educa
Real estate activities
Professional, scientific and technical
Construction
Financial and insurance activities
Arts, entertainment and recreation; ot
Tech
Agriculture, forestry and fishing
Telecommunications
Publishing, motion picture, video, tele
Publishing activities
Motion picture, video, television progr
0
5
10
15
20
Over the last 10 years, many of these traditional industries upon which the European
economy is so dependent have either stagnated or declined, undermining the overall
rate of growth in European Gross Value Added
Yet the European economy today remains heavily dependent on traditional
industries, such as industrial manufacturing, construction, retail and transportation
Tech: The Motor for GDP Growth
02.2
Eurostat
Eurostat
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The European tech (software) industry contributes around $400 billion to the European economy today, though it
remains just a fraction of total European Gross Value Added, accounting for just 2.5% of total European GVA
Tech industry contribution to the European
economy by total Gross Value Added ($B) and
% of total (2002-2016)
Source: Eurostat
LEGEND
Tech
Tech as % of total GVA
Note:
2016 is the most recent year for which full NACE breakdowns of
European GVA are available. Tech refers to the European
software industry, or NACE J62-63
Gross Value Added ($B)Tech as % of total GVA$194.0B
$208.0B
$234.0B
$264.0B
$263.0B
$300.0B
$335.0B
$376.0B
$1.8B
$1.8B
$1.8B
$1.9B
$1.9B
$2.0B
$2.1B
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2012 2013 2014 2015 2016
0.0
100.0
200.0
300.0
400.0
1.6
1.8
2.0
2.2
2.4
The European tech (software) industry contributes around $400 billion to the
European economy today, though it remains just a fraction of total European
Gross Value Added, accounting for just 2.5% of total European GVA
At ~$400 bllion, Europe's software industry
is still just a fraction of overall European
Gross Value Added
Eurostat
Eurostat
Tech: The Motor for GDP Growth
02.2
Latest data shows Europe's software
industry accounts for 2.5% of total
Gross Value Added in Europe, up from
1.9% 10 years ago
ECONOMIC GROWTH
2.5%
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As technology becomes an increasingly more transformative force across all parts of the economy, there is a huge
opportunity to digitise and reignite Europe's traditional industries with trillions of dollars of value in play. The
combined market capitalisation of European constituents of the S&P Global 1,200 equates to $8.8 trillion in just
the top 10 most valuable traditional industries.
Total market cap of European public
companies in S&P Global 1,200 by industry
group ($B)
Source: S&P Global Market
Intelligence
LEGEND
Total Market Cap ($B)
Note:
Based on an analysis of the industry breakdown by market cap,
revenue, market cap/revenue multiple and age of the 328
constituents of the S&P Global 1,200 Index from Europe. Data
as of October 2018.
Total market cap ($B)
$1,270B
$1,231B
$1,150B
$924B
$893B
$777B
$734B
$648B
$608B
$523B
Energy
Financial Services
Bio & pharma
Materials
Food & Drink
CPG
Retail
Industry
Insurance
Mobility
0
200
400
600
800
1,000
1,200
1,400
Those same 300 or so European companies control more than $6.9 trillion in annual revenue and represent a giant
potential opportunity for any European tech companies that seek to take on those incumbent giants in their
traditional industries.
Total revenue of European public companies
in S&P Global 1,200 by industry group ($B)
Source: S&P Global Market
Intelligence
LEGEND
Total revenue ($B)
Note:
Based on an analysis of the industry breakdown by market cap,
revenue, market cap/revenue multiple and age of the 328
constituents of the S&P Global 1,200 Index from Europe. Data
as of October 2018.
Aggregate LTM revenue ($B)
$1,642B
$1,012B
$906B
$843B
$589B
$537B
$422B
$375B
$344B
$269B
Energy
Mobility
Materials
Insurance
CPG
Financial Services
Food & Drink
Industry
Bio & Pharma
Retail
0
250
500
750
1,000
1,250
1,500
1,750
As technology becomes an increasingly more transformative force across all parts of
the economy, there is a huge opportunity to digitise and reignite Europe's traditional
industries with trillions of dollars of value in play. The combined market capitalisation
of European constituents of the S&P Global 1,200 equates to $8.8 trillion in just the top
10 most valuable traditional industries.
Those same 300 or so European companies control more than $6.9 trillion in annual
revenue and represent a giant potential opportunity for any European tech companies
that seek to take on those incumbent giants in their traditional industries
Total value by market cap of European
companies from traditional industries in
the S&P Global 1,200
TRADITIONAL INDUSTRY
There is huge equity value locked up in
traditional industry in Europe
$8.8T
S&P Global Market Intelligence
S&P Global Market Intelligence
S&P Global Market Intelligence
Heritage as Opportunity
21
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Interestingly, the median age of the incumbent companies in these industries is well over 100 years in most cases.
In the battle of incumbent versus startup, it is not the young that beats the old or the large that beats the small. It
is those that are fast that are more likely to succeed against the slow.
Median age in years of European public
companies in S&P Global 1,200 by industry
group
Source: S&P Global Market
Intelligence
LEGEND
Median Age of Companies (years)
Note:
Based on an analysis of the industry breakdown by market cap,
revenue, market cap/revenue multiple and age of the 328
constituents of the S&P Global 1,200 Index from Europe. Data
as of October 2018.
Median age (years)
155
154
135
130
125
113
102
92
66
62
Insurance
Financial Services
Industry 4.0
Food & Drink
CPG
Materials
Mobility
Biology 2.0
Retail
Energy
0
100
25
50
75
125
150
175
Interestingly, the median age of the incumbent companies in these
industries is well over 100 years. In the battle of incumbent versus startup,
it is not the young who beats the old or the large who beats the small. It is
those who are fast that are more likely to succ ed against the slow.
Median age in years of the 348 European
companies that are constituents of the
S&P Global 1,200 index. This compares to
64 for North American companies. Do the
old have the speed it takes to respond to
tech-enabled change?
TRADITIONAL INDUSTRY
Europe's most valuable public companies - 95%
of which come from traditional industries - have
demonstrated remarkable endurance until now
102
Heritage as Opportunity
02.3
S&P Global Market Intelligence
S&P Global Market Intelligence
Photo: Joonas Linkola
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Europe's tech ecosystem remains characterised by a strong level of growing optimism about the future. This
increase in optimism is most evident in Eastern and Southern Europe, where real momentum in building the local
tech ecosystems is evident. The UK, perhaps unsurprisingly, registered the largest downturn in optimism by a wide
margin.
Are you more or less optimistic about the
future of European technology today than
you were 12 months ago?
Source:
LEGEND
More
About the same
Less
% of respondents
Central Europe & Baltics
DACH
Eastern Europe
France & Benelux
Nordics
Southern Europe
UK & Ireland
0
20
40
60
80
100
Europe's tech ecosystem remains characterised by a strong level of growing optimism
about the future. This increase in opti
is
is most evident in Eastern and Southern Europe
where there is real momentum. The UK, perhaps unsurprisingly, registered the largest
downturn in optimism by a wide margin.
of the European tech community is either more
optimistic about the future of European tech, or
maintain the same levels of optimism compared
to 12 months ago. This remains the same as
2017, when 91% of respondents were more
optimistic or the same.
EUROPEAN TECH OPTIMISM
There continues to be a very strong sense of
optimism across the European tech ecosystem
90
S&P Global Market Intelligence
Smiles (almost) all round in
European tech
23
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Munish Varma
Rosie Dallas
SoftBank Vision Fund
Fat Llama
2018 has seen some strong wins for the European tech ecosystem and
we are resoundingly optimistic and excited by the opportunity set we
see emerging. There were several large IPOs in the region signalling
that the sector is maturing while still generating opportunities to
partner with emerging, disruptive companies that combine market
leadership, multiplying network effects and data-driven approaches
to create transformative businesses. Enhanced access to early
growth capital is also a hugely positive market driver, enabling more
companies to scale rapidly while still prioritising innovation."
I'm definitely more optimistic than 12 months ago. I think we're seeing
a marked shift in ambition in Europe, and crucially, that's being
matched at an investor level. What's more, the increased cost of living
and hiring competition seem to have taken the blinkers off a lot of
Valley-bound entrepreneurs. This can only benefit Europe."
"
"
2018 has seen some strong wins for the European tech
ecosystem and we are resoundingly optimistic and
excited by the opportunity set we see emerging.
I'm definitely more optimistic than 12 months ago. I
think we're seeing a marked shift in ambition in Europe,
and crucially, that's being matched at an investor level.
The factors that are driving optimism around the future of European tech are many and varied. But when asked to
state the most important grounds to be optimistic, respondents gave a clear number one reason: the people that
make up the tech ecosystem
What, if anything, makes you feel optimistic
about the state of the European tech
ecosystem?
Source:
LEGEND
% of respondents
Note:
Based on respondents that gave explicit responses only.
% of respondents
27%
25%
11%
11%
9%
7%
6%
5%
People
Growth & Momentum
Startup Ecosystem
European Collaboration & Diversity
Capital Availability
Tech Innovation
Regulation & Political Climate
Values & Ethics
0
5
10
15
20
25
30
The factors that are driving optimism around the future of European tech are many and
varied. But when asked to state the most important grounds to be optimistic, respondents
gave a clear number one reason: the people that make up the tech ecosystem
Smiles (almost) all round in European tech
02.4
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There is strong agreement across all stakeholders, including within the public sector, that European tech
entrepreneurs are changemakers for a better world and that they will have a bigger impact on helping to important
global problems than Europe's governments.
European technology entrepreneurs will do
more to address societal challenges
Source:
LEGEND
Agree
Neither agree nor disagree
Disagree
% of respondents
Founder or startup/scale-up employee
Investor
Policymaker or public sector employee
Other
0
20
40
60
80
100
Selected early-stage European tech
companies with a strong focus on solving a
major global or societal challenge that have
raised in the past year from top investors
Area of Focus
City
Country
Round
Date
Selected Investors
Cambridge Glycoscience
Biology 2.0
Cambridge
UK
3Q18
Y Combinator
Cytera CellWorks
Biology 2.0
London
UK
3Q18
Y Combinator
Lifebit
Biology 2.0
London
UK
3Q18
Connect Ventures, Pentech Ventures, Tiny VC
GTN Limited
Biology 2.0
London
UK
2Q18
Octopus Ventures, Pentech Ventures
Quit Genius
Digital Health &
Wellness
London
UK
2Q18
Force Over Mass Capital, Village Global, Y Combina tor
TPH.co
Future of Retail
Stockholm
Sweden
2Q18
Propel Capital, STING, Seedcamp, The Nordic Web
Ventures, Wave Ventures
Veratrak
Biology 2.0
Oxford
UK
2Q18
Seedcamp
Carbo Culture
Future of Energy
Helsinki
Finland
1Q18
Wave Ventures, Lifeline Ventures, Starlight Ventures
Disior
Digital Health &
Wellness
Helsinki
Finland
1Q18
Maki.vc
KisanHub
Future of Food &
Drink
Cambridge
UK
1Q18
IQ Capital Partners, Notion Capital
Sixfold Bios cience
Biology 2.0
London
UK
1Q18
Y Combinator, LombardStreet.io Ventures
ThinkSono
Digital Health &
Wellness
London
UK
1Q18
AI Seed, WestTech Ventures
WeFarm
Future of Food &
Drink
London
UK
1Q18
Localglobe, True Ventures, ADV, Norrsken Foundation
Fat Lama
Future of Retail
London
UK
4Q17
Blossom Capital, Greylock Partners, Atomico, Y Combinator
Hygglo
Future of Retail
Stockholm
Sweden
(SWE)
4Q17
Norrsken Foundation, Schibsted Growth
LabGenius
Biology 2.0
London
UK
4Q17
Acequia Capital, Kindred Capital, System.One
Source:
Tech for Good:
A European Opportunity?
There is strong agreement across all survey respondents, including within the public
sector, that European tech entrepreneurs will have a bigger impact than European
governments when it comes to solving important global challenges.
undefinedIn Partnership with
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While the vast majority in Europe's tech ecosystem
agrees diversity is a good thing, the community has
a major diversity problem. Women and minorities are
underrepresented at every level of the ecosystem.
Corporate policy on diversity and inclusion still lags.
Diversity
& Inclusion
We've Got a Problem
We're All Part of the Problem
Accelerating Change
03.1
03.2
03.3
Perception and Reality
ARTICLES
27
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No single question in the survey received a stronger level of agreement than this one. When asked if having a
diverse team is a bene t to company performance, almost 90% of respondents agree. If the European tech
ecosystem wants to achieve its full potential, then diversity and inclusion has to be at its core.
Having a diverse team is a bene t to
company performance
Source:
LEGEND
Agree
Neither agree nor disagree
Disagree
Female
Male
0
10
20
30
40
50
60
70
80
90
100
% of respondents
The European tech community is dominated by men. Women account for just 22% of participants in tech-related
Meetup events in the region. Notably, the industry is failing to make any meaningful progress, having seen an
increase of just a single percentage point in the level of female participation at European tech community events
in the past two years.
Share of female attendees in tech-related
Meetup events in Europe
Source:
LEGEND
Total in Europe (%)
Note:
% of the reported gender of attendees only.
% of female attendees21%
21%
22%
2016
2017
2018
0
5
10
15
20
25
The European tech community is dominated by men. Women account for just 22% of
participants in tech-related Meetup events in the region. Notably, the industry is failing to
make any meaningful progress, having seen an increase of just a single percentage point in
the level of female participation at European tech community events in the past two years.
No single question in the survey received a stronger level of agreement than this one.
When asked if having a diverse team is a benefit to company performance, almost 90% of
respondents agree. If the European tech ecosystem wants to achieve its full potential, then
diversity and inclusion has to be at its cor .
We've Got a Problem
Pip Jamieson
The Dots
Diversity is one of our core values.
It's vital to our business and has
been embedded from the beginning.
Diverse teams are better for
business, and better for creativity.
28
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We found only 1 female CTO out of 175 CTOs that work at VC-backed European tech companies that raised a Series
A or Series B in the past year.
Gender composition by job title for
Executive-level positions of selected
European Series A and B venture-backed
companies
Source:
LEGEND
Female
Male
Note:
Based on a sample of executives in CxO positions at 270
European VC-backed tech companies that raised a Series A or
B round between 1 October 2017 and 30 September 2018.
% of Executives
6%
1%
11%
20%
21%
9%
9%
19%
94%
99%
89%
80%
79%
91%
91%
81%
Chief Executive Officer
Chief Technology Officer
Chief Operating Officer
Chief Financial Officer
Chief Marketing Officer
Chief Revenue Officer (or similar)
Chief Product Officer
CxO Other
0
20
40
60
80
100
The 'class of 2018' of VC-backed European tech companies
shows no improvement compared to similar analysis from
2017.
Share of women by position of senior leaders
and founders of selected European Series A
and B venture-backed companies (2018
versus 2017)
Source:
LEGEND
2017
2018
Note:
Based on a sample of Founders and executives in CxO
positions at 270 European VC-backed tech companies that
raised a Series A or B round between 1 October 2017 and 30
September 2018. 2017 data is based on a similar sample.
6%
2%
6%
9%
6%
1%
5%
9%
% of CEOs
% of CTOs
% of Founders
% of all CxO leaders
The 'class of 2018' of VC-backed European tech companies shows no
improvement compared to similar analysis from 2017
We've Got a Problem
03.1
We found only 1 female CTO out of 175
Os hat work a VC-backed
European tech companies that raised a Series A or Series B in the past year
Women are not equally present in tech communities in any
European country
Share of female attendees in tech-related
Meetup events by country
DATASET: TOP 10 C OUNTR I ES
Source:
LEGEND
2018
Note:
% of the reported gender of attendees only. Only countries
with 100+ reported female attendees included.
% of female attendees
33%
28%
28%
26%
26%
26%
25%
25%
25%
25%
Albania
Lithuania
Romania
Bulgaria
Latvia
Serbia
Bosnia and Herzegovina
Ukraine
Portugal
Sweden
0
5
10
15
20
25
30
35
The gender imbalance of the tech communities within different countries follows the
European-wide picture, though there are leaders and laggards. The top 10 countries for
female participation at tech-related Meetup events across the region is dominated by
countries from Eastern Europe, though it should be noted that female participation in the
number one country, Albania, only reaches 33%.
29
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Check Warner
Diversity VC
Lack of diversity is driven by a combination of factors that affect the
pipeline of talent in STEM subjects, the availability of diverse role
models, access to expertise and capital, social mobility and a range
of other issues. Europe is not necessarily tangibly better or worse
than other tech hubs however, given that Europe is such a diverse
range of geographies and people this should be a key strength. I
am encouraged to see the subject of diversity and inclusion appear
on the agenda of more tech companies and more VCs over the last
12 months and to see so many funds participating in initiatives led
by Diversity VC and others. I hope that this translates to sustained
and impactful change the first step though is understanding the
situation as it is today, which is why Atomico's commitment to this
subject is so encouraging."
"
Europe is not necessarily tangibly better or worse than other
tech hubs however, given that Europe is such a diverse range of
geographies and people this should be a key strength.
We've Got a Problem
03.1
The European tech industry's lack of diversity could not be more stark when it comes to how funding is allocated in
the region. It is arresting to see that male founders and founding teams receive 95% of the capital invested and
account for 90% of deals,. It is even more stark to see that the these shares have not changed in the last year
Capital raised and # of deals by founding
team gender (%)
Source:
LEGEND
Male
Female
Mixed
Capital raised (%) / # of deals (%)92%
95%
94%
93%
93%
93%
2%
1%
2%
3%
2%
2%
6%
4%
4%
4%
5%
5%
2013
2014
2015
2016
2017
2018
0
25
50
75
100
Capital Raised
The European tech industry's lack of divers ty could not be more stark when it comes to how funding is allocated in
the region. It is arresting to see that male founders and founding teams receive 95% of the capital invested and
account for 90% of deals,. It is even more stark to see that the these shares have not changed in the last years.
Source:
85%
86%
86%
85%
85%
85%
5%
5%
5%
6%
5%
5%
9%
9%
9%
9%
10%
10%
2013
2014
2015
2016
2017
2018
0
25
50
75
Capital raised (%) / # of deals (%)# of deals
DATASET: # OF DEALS
DATASET: CAPITAL RAISED
The European tech industry's lack of diversity could not be more stark when it
comes to how funding is allocated in the region. It is arresting to see that all-male
founding teams receive 93% of the capital invested and account for 85% of deals.
It is even more stark to see that these shares have not changed in the last years.
The European tech industry's lack of diversity could not be more stark when it comes to how funding is allocated in
the region. It is arresting to see that male founders and founding teams receive 95% of the capital invested and
account for 90% of deals,. It is even more stark to see that the these shares have not changed in the last year
Capital raised and # of deals by founding
team gender (%)
Source:
LEGEND
Male
Female
Mixed
Capital raised (%) / # of deals (%)92%
95%
94%
93%
93%
93%
2%
1%
2%
3%
2%
2%
6%
4%
4%
4%
5%
5%
2013
2014
2015
2016
2017
2018
0
25
50
75
100
Capital Raised
undefined31
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We've Got a Problem
03.1
Each node represents an article. Links connect articles sharing similar language. Clusters
form when many articles share strong similarity, revealing topics.
Blockchain: 11.91%
Fundraising: 43.58%
Diversity, Discrimination,
Harassment, Pay Equity, Women:
10.62%
Diversity: 3.8%
Discrimination: 1.2%
Harassment: 1.3%
Pay Equity: 0.3%
Women: 7.4%%
32
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Compared to other tech-related topics that gain large amounts of coverage in European news sources, it is notable
that articles related to diversity and inclusion are more likely to be led by a negative sentiment.
Share of total stories per topic by sentiment
summary
Source:
LEGEND
Positive
Neutral
Negative
Note:
Based on ~3,000 stories across 843 European news sources
(primarily UK focused) from Septemeber 2017 to September
2018.
% of total stories
Fundraising
Exits (IPOs & M&A)
Blockchain
Artificial Intelligence
Diversity & Inclusion
0
20
40
60
80
100
Compared to other tech-related topics that gain large amounts of coverage in European
news sources, it is notable that articles related to diversity and inclusion are more likely to
be led by a negative sentiment.
The narrative around diversity and inclusion is driven by US tech companies, leaving a huge vacuum in terms of
European voices stepping up into the discussion. In the absence of European voices taking part in the discussion,
does this leave an opportunity for leadership from European tech companies to help drive the discussion in a
positive way?
Top 10 most discussed companies in
European news stories focused on diversity
and inclusion in the tech industry
Source:
LEGEND
# of mentions
Note:
Based on ~3,000 stories across 843 European news sources,
primarily UK focused, from September 2017 to September
2018.
# of unique articles primarily talking about the company
157
88
45
37
35
30
24
23
21
20
Google
Facebook
Twitter
Microsoft
Apple
Salesforce
PwC
IBM
McKinsey
Amazon
0
100
25
50
75
125
150
175
Interestingly, the reporting we do see on diversity and inclusion in tech in European news
sources is driven by US tech companies. There's a huge vacuum of European voices
stepping into the discussion. We all have a responsibility to do and say much more.
We've Got a Problem
03.1
undefined34
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Despite many voices in the industry taking a negative view on the level of inclusion in Europe's tech industry,
people are much more likely to believe that the culture in their own companies is inclusive. In fact, more than three
quarters of founders or employees at Europe's private tech companies perceive their company's culture to be
inclusive.
The culture at my tech company is inclusive
Source:
Occupation
LEGEND
Agree
Neither agree nor disagree
Disagree
Founder or startup/scale-up employee
Investor
Policymaker or public sector employee
Other
0
20
40
60
80
100
% of respondents
Source:
Female
Male
0
20
40
60
80
100
Gender
% of respon
d
ents
DATASET: OCCUPATION
DATASET: GENDER
We're All Part of the Problem
Despite many voices in the industry taking a negative view on the level of inclusion in
Europe's tech industry, people are much more likely to believe that the culture in their own
companies is inclusive. In fact, more than three-quarters of founders or employees at
Europe's private tech companies perceive their company's culture to be inclusive.
Photo: Petri Anttila
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People in the European tech ecosystem are split in their views on whether it is inclusive. While a majority of men
think it is inclusive, only 38% of women agree. Female investors on the other hand, who are arguably able to take a
broader view given the number of companies they meet, are much less positive with 45% disgreeing that the
industry is inclusive versus 36% that agree.
The European tech industry is inclusive
DATASET: FOUNDERS/INVESTORS
Source:
LEGEND
Agree
Neither agree nor disagree
Disagree
% of respondents
Female founder or startup/scale-up
employee
Female investor
Male founder or startup/scale-up
employee
Male investor
0
20
40
60
80
100
L EGEND
Agree
Neither agree nor disagree
Disagree
People in the European tech ecosystem are split in their views on whether it is inclusive. While a majority of men
think it is inclusive, only 38% of women agree. Female investors on the other hand, who are arguably able to take a
broader view given the number of companies they meet, are much less positive with 45% disgreeing that the
industry is inclusive versus 36% that agree.
The European tech industry is inclusive
Source:
Female
Male
0
20
40
60
80
100
% of respondents
Peopl in the European tech ecosystem are split in their views on whether it is inclusive. While a majority of men
think it is inclusive, only 38% of women agree. Female investors on the other hand, who are arguably able to take a
broader view given the number of companies they meet, are much less positive with 45% disgreeing that the
industry is inclusive versus 36% that agree.
The European tech industry is inclusive
DATASET: EXPERIENCED DISCRIMINATION
Source:
LEGEND
Agree
Neither agree nor disagree
Disagree
Experienced discrimination
Not experienced discrimination
0
20
40
60
80
100
% of respondents
We're All Part of the Problem
03.2
DATASET: GENDER
DATASET: FOUNDER/INVESTOR
DATASET: EXPERIENCED DISCRIMINATION
The industry's perception of its own inclusiveness stands is undermined by what survey respondents shared about
their experiences with discrimination while working in European tech. 46% of women state that they have
experienced discrimination.
Have you ever experienced discrimination
while working in the European tech industry?
Source:
LEGEND
Female
Male
% of respondents
32%
62%
35%
49%
39%
42%
50%
10%
22%
26%
12%
18%
14%
15%
Central Europe & Baltics
DACH
Eastern Europe
France & Benelux
Nordics
Southern Europe
UK & Ireland
0
10
20
30
40
50
60
70
The industry's perception of its own inclusiveness is undermined by what survey
respondents shared about their individual experiences of discrimination while working
in European tech. 46% of women state that they have experienced discrimination.
People in the European tech ecosystem are split in their views on whether it is inclusive.
While a majority of men think it is inclusive, only 38% of women agree. Female investors
on the other hand, who are arguably able to take a broader view given the number of
companies they meet, are much less positive, with 45% disagreeing that the industry is
inclusive versus 36% that agree.
36
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We're All Part of the Problem
03.2
Baroness Martha Lane Fox
Doteveryone
Diversity is a key challenge facing the tech ecosystem here in Europe,
and it is ironic that more companies are not looking to address that
challenge when talent is also such a key issue for them. Companies
are not looking widely and deeply enough for diverse talent. Founders
need to take ownership of this as they scale."
"
Companies are not looking
widely and deeply enough for
diverse talent. Founders need
to take ownership of this as
they scale.
Discrimination based on gender might be the most visible and quanti able, but it is from the only form of
discrimination that exists at worrying levels in the European tech ecosystem. Meaningful numbers of respondents
have experienced discrimination based on age and ethnicity too. The survey can't accurately quantify the level of
discrimination based on disability of sexual orientation, but the data points to these being very prevalent here too.
Types of discrimination experienced by
people who have experienced any form of it
when working in European tech
Source:
LEGEND
Female
Male
Note:
The respondents' mix in self-identi ed ethnicity: 84% White,
5% Asian, 1% Black/African/Caribbean, 3% Mixed/Multiple, 2%
Other, 4% Prefer not to say.
% of respondents that have experienced each form of discrimination
40%
90%
6%
11%
1%
3%
39%
32%
12%
32%
5%
11%
Age
Gender
Sexual orientation
Ethnicity
Disability
Religion
0
20
40
60
80
100
Steve O'Hear
TechCrunch
In Europe we have blindly imported Silicon Valley's conversation
on diversity and inclusion, which is often too narrow in scope, and
further marginalises other underrepresented groups or leaves
itself vulnerable to accusations of identity politics. For example, the
underrepresentation of people from less privileged socio-economic
backgrounds or persons with disabilities seems to be missing from
the conversation entirely."
"
The underrepresentation of people from less privileged
socio-economic backgrounds or persons with disabilities
seems to be missing from the conversation entirely.
of female respondents have
experienced some form of
discrimination while working in the
European tech industry
DISCRIMINATION IN THE EUROPEAN TECH INDUSTRY
Women are experiencing an alarming level of
discrimination in the European tech industry
46%
Discrimination based on gender might be the most visible and quantifiable, but it is not the
only form of discrimination that exists at worrying levels in the European tech ecosystem.
A meaningful number of respondents have experienced discrimination based on age and
ethnicity too. The survey can't accurately quantify the level of discrimination based on
disability or sexual orientation, but the data points to these being very prevalent here too.
undefined38
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In the wake of high pro le stories of discrimination in the tech industry, the issue of diversity and inclusion has
seen an increased focus. This has, according to respondents, changed how many now behave. 45% of women and
36% of men agree that they've made changes to their behaviour in the last 12 months.
I have changed my behaviour as a result of
increased focus on diversity and inclusion
LEGEND
Agree
Neither agree nor disagree
Disagree
Female
Male
0
10
20
30
40
50
60
70
80
90
100
% of respondents
Source:
Sebastian Siemiatkowski
Sara Wimmercranz / Susanne Najafi
Klarna
Backingminds
At Klarna, we now have over 80 nationalities, with over 55 in our
Stockholm HQ alone. I am amazed that we have somehow managed
to attract such talented people from across the globe to this small
city in the north with dark winters. Most of our employees have
moved for their job and if the culture is not open or enabling people
to speak their voice and feel like they can make an impact, diversity
does not matter alone, if it's simply not inclusive and people will not
stay or thrive. To scale and stay competitive in the tech industry, we
benefit massively from experiences of people from many different
types of backgrounds in building solutions. Diversity of thinking
and experience fuels innovation and drives market growth. To put it
simply, diverse teams create better products and solutions."
"
By investing outside of the homogeneous networks of traditional
venture capital we believe we can make great return and also drive
change in society. The key to diversity is giving more entrepreneurs
the right keys to grow their companies because it will create new
employers, role models and owners."
"
Diversity of thinking and
experience fuels innovation
and drives market growth.
To put it simply, diverse
teams create better
products and solutions
The key to diversity is giving
more entrepreneurs the
right keys to grow their
companies because it will
create new employers, role
models and owners.
Accelerating Change
In the wake of high profile stories of discrimination in the tech industry, the issue of
diversity and inclusion has seen an increased focus. According to many respondents,
this changed how many now behave. 45% of women and 36% of men agree that
they've made changes to their behaviour in the last 12 months.
39
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One way to explore the extent to which the European tech industry is tackling diversity and inclusion is by
examining the level of adoption of different policies that can help to enable a more diverse and inclusive company
culture. Flexible working, for example, has a high level of adoption among European tech companies.
My company has a exible working policy
DATASET: ALL RESPONDENTS
Source:
LEGEND
Yes
No
Note:
Company size only includes founder and startup/scale-up
employees.
91%
9%
All respondents
0
10
20
30
40
50
60
70
80
90
100
% of respondents
One way to explore the extent to which the European tech industry is tackling diversity and inclusion is by
examining the level of adoption of different policies that can help to enable a more diverse and inclusive company
culture. Flexible working, for example, has a high level of adoption among European tech companies.
My company has a exible working po icy
DATASET: INDUSTRY
Source:
LEGEND
Yes
No
Note:
Company size only includes founder and startup/scale-up
employees.
92%
90%
8%
10%
Tech
Non-tech
0
10
20
30
40
50
60
70
80
90
100
% of respondents
One way to explore the extent to which the European tech industry is tackling diversity and inclusion is by
examining the level of adoption of different policies that can help to enable a more diverse and inclusive company
culture. Flexible working, for example, has a high level of adoption among Euro ea tech companies.
My company has a exible working policy
DATASET: COMPAN Y SIZ E BY # OF EMPLOYEES
Source:
LEGEND
Yes
No
Note:
Company size only includes founder and startup/scale-up
employees.
94%
92%
88%
6%
8%
12%
<=10
11-100
100+
0
10
20
30
40
50
60
70
80
90
100
% of respondents
Accelerating Change
03.3
DATASET: ALL RESPONDENTS
DATASET: INDUSTRY
DATASET: COMPANY SIZE BY # OF EMPLOYEES
One way to explore the extent to which the European tech industry is tackling diversity and
inclusion is by examining the level of adoption of different policies that can help to enable a
more diverse and inclusive company culture. Flexible working, for example, has a high level
of adoption among European tech companies.
Note:
Company size only includes founder and startup/scale-up
employees.
One way to explore the extent to which the European t ch industry is tackling diversity and inclusion is by
examining the level of adoption of different policies that can help to enable a more diverse and inclusive company
culture. Flexible working, for example, has a high level of adoption among European tech companies.
My company has a exible working policy
DATASET: ALL RESPONDENTS
Source:
LEGEND
Yes
No
Note:
Company size only includes founder and startup/scale-up
employees.
91%
9%
All respondents
0
10
20
30
40
50
60
70
80
90
100
% of respondents
Photo: Anrietta Kuosku
40
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Similarly, founders and employees of Europe's private tech startups and scaleups report high levels of adoption of
dedicated parental leave policies, though there is a marked difference based on company size. In fact, nearly 40%
of companies that are still fewer than 10 employees have yet to put in place a parental leave policy
My company has a parental leave policy
LEGEND
Yes
No
Note:
Company size only includes founder and startup/scale-up
employees.
78%
22%
All respondents
0
10
20
30
40
50
60
70
80
90
100
% of respondents
Similarly, founders and employees of Europe's private tech startups and scaleups report high levels of adoption of
dedicated parental leave policies, though there is a marked difference based on company size. In fact, nearly 40%
of companies that are still fewer than 10 employees have yet to put in place a parental leave policy
My company has a diversity & inclusion policy
LEGEND
Yes
No
Note:
Company size only includes founder and startup/scale-up
employees.
53%
47%
All respondents
0
10
20
30
40
50
60
70
80
90
100
% of respondents
Similarly, founders and employees of Europe's private tech startups and scaleups report high levels of adoption of
dedicated parental leave policies, though there is a marked difference based on company size. In fact, nearly 40%
of companies that are still fewer than 10 employees have yet to put in place a parental leave policy
My company has a parental leave policy
DATAS ET: INDUSTRY
LEGEND
Yes
No
Note:
Company size only includes founder and startup/scale-up
employees.
74%
87%
26%
13%
Tech
Non-tech
0
10
20
30
40
50
60
70
80
90
100
% of respondents
Similarly, founders and employees of Europe's private tech startups and scaleups report high levels of adoption of
dedicated parental leave policies, though there is a marked difference based on company size. In fact, nearly 40%
of companies that are still fewer than 10 employees have yet to put in place a pare tal leave policy
My company has a parental leave policy
DATASE T: I NDUSTRY
LE G E ND
Yes
No
Note:
Company size only includes founder and startup/scale-up
employees.
48%
62%
52%
38%
Tech
Non-tech
0
10
20
30
40
50
60
70
80
90
100
% of respondents
0
10
20
30
40
50
60
70
80
90
100
% of respondents
Similarly, founders and employees of Europe's private tech startups and scaleups report high levels of adoption of
dedicated parental leave policies, though there is a marked difference based on company size. In fact, nearly 40%
of companies that are still fewer than 10 employees have yet to put in place a parental leave policy
My company has a parental leave policy
DATASET: COMPANY SIZE BY # OF EMPLOYEE S
LEGEND
Yes
No
62%
75%
88%
38%
25%
12%
<=10
11-100
100+
0
10
20
30
40
50
60
70
80
90
100
% of respondents
Similarly, founders and employees of Europe's private tech startups and scaleups report high levels of adoption of
dedicated parental leave policies, though there is a marked difference based on company size. In fact, nearly 40%
of companies that are still fewer than 10 employees have yet to put in place a parental leave policy
My company has a parental leave policy
DATAS ET: COMPANY S IZE BY # OF EMPLOYEES
LEGEND
Yes
No
41%
42%
58%
59%
58%
42%
<=10
11-100
100+
Flexible working and parental leave policies are important steps towards enabling a
more diverse workforce, but may not be sufficient on their own. Interestingly, a large
percentage of companies, especially smaller ones, av not yet implemented n overall
diversity and inclusion policy.
Accelerating Change
03.3
DATASET: ALL RESPONDENTS
DATASET: ALL RESPONDENTS
DATASET: INDUSTRY
DATASET: INDUSTRY
DATASET: COMPANY SIZE BY # OF EMPLOYEES
DATASET: COMPANY SIZE BY # OF EMPLOYEES
Similarly, founders and employees of Europe's private tech startups and scale-ups report
high levels of adoption of dedicated parental leave policies, though there is a marked
difference based on company size. In fact, nearly 40% of companies that are still fewer
than 10 employees have yet to pu in place a pare tal leave policy
Note:
Company size only includes founder and startup/scale-up
employees.
Note:
Company size only includes founder and startup/scale-up
employees.
41
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&
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Similarly, founders and employees of Europe's private tech startups and scaleups report high levels of adoption of
dedicated parental leave policies, though there is a marked difference based on company size. In fact, nearly 40%
of companies that are still fewer than 10 employees have yet to put in place a parental leave policy
My company has specific diversity
& inclusion hiring policies
L EGEND
Yes
No
Note:
Company size only includes founder and startup/scale-up
employees.
45%
55%
All respondents
0
10
20
30
40
50
60
70
80
90
100
% of respondents
Similarly, founders and employees of Europe's private tech startups and scaleups report high levels of adoption of
dedicated parental leave policies, though there is a marked difference based on company size. In fact, nearly 40%
of companies that are still fewer than 10 employees have yet to put in place a parental leave policy
My company has a diversity &
inclusion representative
LE GE ND
Yes
No
Note:
Company size only includes founder and startup/scale-up
employees.
35%
65%
All respondents
0
10
20
30
40
50
60
70
80
90
100
% of respondents
Similarly, founders and employees of Europe's private tech startups and scaleups report high levels of adoption of
dedicated parental leave policies, though there is a marked difference based on company size. In fact, nearly 40%
of companies that are still fewer than 10 employees have yet to put in place a parental leave policy
My company has a parental leave policy
DATASET: INDUSTRY
LEGEND
Yes
No
Note:
Company size only includes founder and startup/scale-up
employees.
43%
51%
57%
49%
Tech
Non-tech
0
10
20
30
40
50
60
70
80
90
100
% of respondents
Similarly, founders and employees of Europe's private tech startups and scaleups report high levels of adoption of
dedicated parental leave policies, though there is a marked difference based on company size. In fact, nearly 40%
of companies that are still fewer than 10 employees have yet to put in place a parental leave policy
My company has a parental leave policy
DATASET: INDUSTRY
LEGEND
Yes
No
Note:
Company size only includes founder and startup/scale-up
employees.
32%
44%
68%
56%
Tech
Non-tech
0
10
20
30
40
50
60
70
80
90
100
% of respondents
0
10
20
30
40
50
60
70
80
90
100
% of respondents
Similarly, founders and employees of Europe's private tech startups and scaleups report high levels of adoption of
dedicated parental leave policies, though there is a marked difference based on company size. In fact, nearly 40%
of companies that are still fewer than 10 employees have yet to put in place a parental leave policy
My company has a parental leave policy
DATASET: COMPANY SIZE BY # OF EMPLOYEES
LEGEND
Yes
No
36%
38%
52%
64%
62%
48%
<=10
11-100
100+
0
10
20
30
40
50
60
70
80
90
100
% of respondents
Similarly, founders and employees of Europe's private tech startups and scaleups report high levels of adoption of
dedicated parental leave policies, though there is a marked difference based on company size. In fact, nearly 40%
of companies that are still fewer than 10 employees have yet to put in place a parental leave policy
My company has a parental leave policy
DATASET: COMPANY SIZE BY # OF EMPLOYEES
LEGEND
Yes
No
26%
24%
36%
74%
76%
64%
<=10
11-100
100+
The fact that such polici s remain far from widespread in the European t ch industries ay be
compounded by the fact that few companies have appoint d dedica ed D&I repr sentatives.
Accelerating Change
03.3
DATASET: ALL RESPONDENTS
DATASET: ALL RESPONDENTS
DATASET: INDUSTRY
DATASET: INDUSTRY
DATASET: COMPANY SIZE BY # OF EMPLOYEES
DATASET: COMPANY SIZE BY # OF EMPLOYEES
Note:
Company size only includes founder and startup/scale-up
employees.
Note:
Company size only includes founder and startup/scale-up
employees.
Even more targeted initiatives, such as specific diversity & inclusion hiring policies, are still
uncommon among European t ch companies. It is clear here too that many companies appear
to delay putting in place specific D&I policies until th y scal to a large n mber of employe s.
undefinedIn Partnership with
&
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One of European tech's greatest strengths is its deep talent
pool. A growing number of tech hubs are distributed across
all corners of the region. They are connected by flows of
Europeans and non-Europeans alike. Finally, a bright, new
generation is emerging; European founders are returning
from the Valley, and students are seizing the opportunity to
found their own startups.
Europe's
Got Talent
People Power
People Flows
An Ecosystem Powered by Migratory Talent
Competing for & Compensating Talent
The Next Generation
04.1
04.2
04.3
04.4
04.5
People, Competition
and Movement
ARTICLES
44
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&
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Tom Foster-Carter
Chief Operating Officer
Curve, Oscar
Meri Williams
CTO
Moo, Marks & Spencer
Marina Theodosiou
Head of Credit Decision Science
Aire, Funding Circle
LONDON
Peder Stahle
Chief Product Officer
iZettle, Vodafone
Victoria Kopylov
General Counsel
Spotify, Mannheimer Swartling
Anna Fredrixon
VP People
Truecaller, Capgemini
STOCKHOLM
Kritarth Chhabra
Global Head of Business Dev.
OnePlus, Uber
Peter Van Kersen
VP People
Foodora, Catawiki
Bartek Kunowski
VP Product & Technology
Tuenti, Amazon
BARCELONA
Marty Ostermiller
CFO
HireVue, Oracle (RightNow)
Pascal Gauthier
President
Criteo
Odile Szabo
VP Ecommerce & Marketing
Vestiaire Collective, PriceMinister
PARIS
Phillip Chambers
CEO
Citrix, Qype
Christian Holm
CTO
Citrix
Patrick Cournoyer
COO
FlightCar
COPENHAGEN
Koen Bok
CEO
Facebook
Adeline Lee C.
Director of Growth
Clue
Tom Watson
Director of Product
Pinterest, Facebook
AMSTERDAM
Remo Gerber
CCO
Gett, Groupon
Frank Stephenson
Head of Product Design
McLaren, Ferrari
Meggy Sailer
Global Head of Recruitment
Tesla
MUNICH
Jussi Mkinen
CMO
Rovio
Klaus Melakari
CTO
Microsoft, Nokia
Tiina Nieminen
Program Director
Microsoft, Nokia
HELSINKI
Note: This is intended as a representative selection of experienced talent that is
gained experience in previous European tech companies and is now helping to
build a new generation of companies. It should not be considered complete.
The State of European Tech 2018
The next generation of European tech companies from hubs across the
region are being built by experienced tech talent from previous generations
People Power
Euro e's professional developer talent pool is distributed
across all corners of the region
Map of professional developer distribution
across Europe by country
Source:
L EGEND
upto 1,000,000
800,000 to 900,000
700,000 to 800,000
600,000 to 700,000
500,000 to 600,000
400,000 to 500,000
300,000 to 400,000
200,000 to 300,000
100,000 to 200,000
upto 100,000
Europe's professional developer talent pool is distributed
across all corners of the region
Map of professional developer distribution
across Europe by country
Source:
LEGEND
upto 850,400
680,32 to 765,360
595,280 to 680,320
510,240 to 595,280
425,200 to 510,240
340,160 to 425,200
255,120 to 340,160
170,080 to 255,120
85,040 to 170,080
upto 85,040
Europe's professional dvelper talent pool is
distributed across all corners of the r gion
The n xt generation f European tech ompanies from hubs across the region are being
built by experienced tech talent from previous generations
Note:
This is intended as a representative selection of experienced talent that is gained experience in
previous European tech companies and is now helping to build a new generation of companies. It
should not be considered complete.
45
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Germany, Europe's largest country by population, is also home to the region's largest single market for professional
developer talent, followed very closely by the UK and then France in a more distant third place
# of professional developers
by country (2018 and 2017)
TOP 10
Source:
LEGEND
2018
2017
Note:
Where data for 2017 was not available,
this is shown as blank
# of professional developers
851,000
830,500
491,800
407,100
308,900
308,500
310,000
254,500
172,000
176,000
Germany
United Kingdom
France
Russia
Italy
Spain
Netherlands
Poland
Ukraine
Sweden
0
100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000
Germany, Europe's largest country by population, is also home to the region's largest single market for profession
developer talent, followed very closely by the UK and then France in a more distant third place
# of professional developers
by country (2018 and 2017)
TOP 10
Source:
LEGEND
2018
2017
Note:
Where data for 2017 was not available,
this is shown as blank
# of professional developers
851,000
830,500
491,800
407,100
308,900
308,500
310,000
254,500
172,000
176,000
Germany
United Kingdom
France
Russia
Italy
Spain
Netherlands
Poland
Ukraine
Sweden
0
100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000
Germany, Europe's largest country by population, is also home to the region's largest
single market for professional developer talent, followed very clo ely by the UK and
then France in a more distan third place
People Power
04.1
Europe is home to at least 30 different hubs with 50,000 or more professional developers. It's three largest hubs
for developers are London, Paris and Amsterdam, which together are home to about 15% of the region's total
developers
Top 30 European cities by # of
professional developers in 2018
TOP 10
Source:
LEGEND
Professional developers
# of professional developers
357,900
268,600
216,800
165,900
160,900
120,700
111,800
110,600
99,400
99,100
London
Paris
Amsterdam
Cologne
Moscow
Frankfurt am Main
Madrid
Manchester
Berlin
Zurich
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
Europe is home to at least 30 different hubs with 50,000 or more professional developers. It's three largest hubs
for developers are London, Paris and Amsterdam, which together are home to about 15% of the region's total
developers
Top 30 European cities by # of
professional developers in 2018
TOP 10
Source:
L EGEND
Professional developers
# of professional developers
357,900
268,600
216,800
165,900
160,900
120,700
111,800
110,600
99,400
99,100
London
Paris
Amsterdam
Cologne
Moscow
Frankfurt am Main
Madrid
Manchester
Berlin
Zurich
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
Europe is home to at least 30 different hubs with 50,000 or more professional
developers. Its three largest hubs for d vloper are London, Paris and Amster am,
which together are home to ab ut 15% of the region's total developers.
professional developers in Cologne, Germany's largest
hub for engineering talent
PROFESSIONAL DEVELOPER TALENT POOL
Germany's largest hubs for professional developers
might surprise you
165,900
professional developers in Europe, which
represents growth of 200,000 compared
to 5.5 million in 2017. This also compares to
4.4 million in the US, a number that stayed
flat year on year.
PROFESSIONAL DEVELOPER TALENT POOL
Europe's professional developer workforce
continues to grow strongly
5.7m
Note:
Where data for 2017 was not available, this is
shown as blank
undefinedundefinedundefined49
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People Flows
04.2
increase year-on-year in the % of software
engineer job postings in the UK that are
hard to fill, i.e. are posted for longer than
60 days in Indeed's UK job site
COMPETITION FOR TALENT
The UK has seen a huge increase in the % of
software engineer job postings that are defined
as 'hard to fill'
42%
Raj Mukherjee
Indeed
People want to work at a company that has a mission they believe in.
No longer is talent just driven by compensation. Though we still see
that salary is a key factor candidates consider when evaluating an
offer, we also see candidates caring more about job location, work
flexibility, a good work environment, and meaningful work. As every
company becomes a software company and the need for software
engineers and other tech roles continues to grow, it will be even more
crucial for companies of all sizes look to solutions that will help them
hire quality candidates and to close the talent gap in tech."
"
As every company becomes a software company and
the need for software engineers and other tech roles
continues to grow, it will be even more crucial for
companies of all sizes look to solutions that will help them
hire quality candidates and to close the talent gap in tech.
World-class talent is moving to and returning to Europe from the
US to help build a new generation of European tech companies
Note:
This is intended as a representative selection of talent
that has moved to Europe from the US and should not be
considered complete.
50
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Europe is growing as a destination of choice for US software engineers searching for software engineer roles
overseas, and now accounts for more than 20% of all cross-border searches, up 20% compared with 2017.
European share (%) of US-originated cross-
border searches containing 'software' and
'engineer'
Source:
LEGEND
Share of US-originated cross-border searches (%)
European share (%) of US-originated searches20.8%
16.2%
2018
2017
0.0
5.0
10.0
15.0
20.0
The UK is the clear destination country of choice for US software engineers searching for potential job postings in
the European tech ecosystem.
% share by destination country of US.-
originated cross-border searches containing
'software' and 'engineer'
Source:
L E GE ND
2018
2017
Share (%) by destination country of US-originated searches
13.96%
2.74%
1.46%
0.84%
0.42%
0.35%
0.30%
0.29%
0.15%
0.10%
0.10%
0.08%
10.56%
1.73%
1.60%
0.88%
0.36%
0.24%
0.41%
0.18%
0.06%
0.09%
0.03%
0.07%
UK
Ireland
Germany
Netherlands
France
Spain
Italy
Sweden
Belgium
Denmark
Portugal
Austria
0.00
10.00
2.50
5.00
7.50
12.50
15.00
Europe is growing as a destination of choice for US software engineers searching for
software engineer roles overseas, and now accounts for more than 20% of all cross-border
searches, up 20% compared with 2017.
The UK is the clear destination country of choice for US software engineers searching for
potential job postings in the European tech ecosystem.
People Flows
04.2
The UK is the clear d
ti
ti

tr f
i
for US software engine rs searching for potential job postings in
the European tech e
.
% share by destination countr

originated cro s-border sear

'software' and 'engineer'
Source:
L EGEND
2018
2017
Share (%) by destination country of US-originated searches
13.96%
2.74%
1.46%
0.84%
0.42%
0.35%
0.30%
0.29%
0.15%
0.10%
0.10%
0.08%
10.56%
1.73%
1.60%
0.88%
0.36%
0.24%
0.41%
0.18%
0.06%
0.09%
0.03%
0.07%
UK
Ireland
Ger any
Netherlands
France
Spain
Italy
Sweden
Belgium
Denmark
Portugal
Austria
0.00
10.00
2.50
5.00
7.50
12.50
15.00
undefinedundefinedundefinedundefined55
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There is a wide variance in the level of average founder compensation at every funding round stage between
Europe and the US, both in terms of base salary and incentive pay
Founder base salary and incentives by
Funding Round stage in 50th percentile by
region
Source:
LEGEND
Base Salary
Incentive Pay
Note:
Incentive pay is cash bonus or incentive, which is not related to
equity or equity value.
USDEurope
Europe
Europe
Europe
US
US
US
US
Seed
Series A
Series B
Series C
0
100,000
200,000
300,000
400,000
While there are differences in average pay between European and US founders, the average level of founder equity
by funding round stage is closely aligned from Series A onwards
Founder equity by funding round stage in
50th percentile by region
Source:
LEGEND
Europe
US
Note:
Advanced-HR's compensation report details founder's cash
and equity pay as reported by participating private, venture-
backed companies. Equity data is displayed as a percentage of
fully diluted shares. Equity not related to salary nor incentives.
% of founder equity29%
19%
13%
13%
34%
19%
12%
10%
Seed Funding Only
Post Series A
Post Series B
Post Series C
0
10
20
30
The average level of employee ownership by funding round
stage is broadly similar in Europe compared to the US
Employee ownership by funding round stage
in 50th percentile by region
Source:
LEGEND
Executives
Staff + Other
Unissued
Note:
This details equity held by executive-level employees, staff-
level employees and remaining unissued options. It excludes
Founder's Shares and equity allocations displayed as a
percentage of fully diluted shares. Equity not related to salary
nor incentives
% of ownershipEurope
Europe
Europe
Europe
US
US
US
US
Seed
Series A
Series B
Series C
0.0
5.0
10.0
15.0
20.0
While there are differences in average pay between European and US founders, the average
level of founder equity by fundi g round stage is closely align d from Series A onwards.
European tech compani s have historic lly eith r chosen not to use or have not been
able to use stock options as an incentive tool for employees in the same way as has been
standard in the US Advanced-HR's latest data suggests that there is positive change afoot
in Europe. Based on their latest employee ownership report, the average level of employee
ownership by funding round stage in Europe is broadly in line with levels in the US.
Competing For &
Compensating Talent
There is a wide variance in the level of average founder compensation at every funding round
stage between Europe and the US, both in terms of base salary and incentive pay.
undefinedundefinedundefinedundefined60
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Selecting any that apply, what are the main
reservations you have when considering
whether to become an entrepreneur?
Source:
LEGEND
Female
Male
Note:
Student respondents only
% of respondents
51%
63%
47%
29%
9%
7%
40%
18%
13%
7%
5%
Too risky
Lack of funding
Lack of ideas
Inability to find a co-founder
Lack of support from universities
Unattractive lifestyle
Lack of support from family/friends
Lack of successful role models in Europe
Lack of support from
incubators/accelerators
0
10
20
30
40
50
60
70
The biggest reservations that hold back students when considering entrepreneurship
are the overall perceived risk, lack of funding, lack of ideas and an inability to find
a co-founder to join them on the journey. These concerns are generally felt equally
across students of both genders, except for access to funding, which is cited
significantly more frequently by female students.
The Next Generation
04.5
Jamie Macfarlane
Creator Fund
Entrepreneurship might feel riskier to students because they think
they can't find the funding. Second, students see their friends taking
a job at a large corporation or going into a law firm and therefore
by comparison it feels risky to break out and start their own thing. I
think Creator Fund is changing that by building a community where
potential founders or people interested in starting a business meet
other people like them. They realise that entrepreneurship is viable,
and that there will be people to support them."
"
Creator Fund is...building a community where potential
founders or people interested in starting a business meet
other people like them. They realise that entrepreneurship
is viable, and that there will be people to support them.
Female students cite access to funding as
their main reservation when considering
whether to become an entrepreneur,
versus just 40% of male students
BARRIERS TO ENTREPRENEURSHIP FOR STUDENTS
The structural imbalance in access to funds
for female entrepreneurs is evident in the
reservations that female students have when
considering entrepreneurship
63%
61
In Partnership with
&
www.thestateofeuropeantech.com
If Europe's tech ecosystem is to bene t from an increased number of its next generations of students entering into
entrepreneurship, it should explore ways to better educate students about tech entrepreneurship and expose
them to relevant, practical experiences from which they can learn.
Stated brie y, what could be done to better
support students to move straight into
entrepreneurship?
Source:
L E GE ND
% of respondents
Note:
Student respondents only. Based on respondents that gave
explicit responses only.
% of respondents
29%
16%
12%
12%
11%
10%
9%
Bridging the knowledge gap
Gaining practical experience in tech
Access to funding
University-linked accelerators
Access to mentors
Connecting universities to the tech
ecosystem
Other
0
5
10
15
20
25
30
If Europe's tech ecosystem is to benefit from an increased number of its next
generations of students entering into entrepreneurship, it should explore
ways to better educate students about tech entrepreneurship and expose
them to relevant, practical experiences from which they can learn.
A new generation of VCs is emerging in Europe to pioneer a model of running
a fund by students that is investing in students
The Next Generation
04.5
Alice Bentinck
Campus Capital
Oxford Seed Fund
UCL Entrepreneurs
VC Fund
First Momentum
Ventures
The Creator Fund
Wave Ventures
EF
United Kingdom
United Kingdom
United Kingdom
Germany
Pan-European
Finland
It's never been easier for students to start companies both while at
university and upon graduating. That said, we still see students focus
on small markets and small problems when this needn't be the case.
Each student should think about and use their Edge, what is their
competitive advantage against other founders? Particularly if you're
technical, this is a must."
"
Each student should think about and use their Edge,
what is their competitive advantage against other
founders? Particularly if you're technical, this is a must.
In Partnership with
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Let's look beyond London, Paris, and Berlin. European tech
is no longer driven by just a handful of cities. Upcoming
hubs span from Cardiff, in the U.K. to Novosibirsk, Russia,
5,300 kilometers away. These new communities - linked by
knowledge, talent, and capital flows - are already producing
global, category winners.
Tech Hubs
Growing Communities
Every City is a Tech City
Density, through Interconnected Tech Hubs
Building and internationalising away from home
New Hubs - Where Next?
05.1
05.2
05.3
05.4
05.5
Concentrated &
Connected Communities
ARTICLES
undefined64
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Growing Communities
05.1
There is huge geographic diversity amongst the Top 20 fastest-growing tech
hubs in Europe, as measured by the annual growth in attendees to tech-related
Meetup events in those cities. Zug in Switzerland, home to a growing crypto
community, ranked number one as the fastest-growing community overall.
There is huge geographic diversity amongst the Top 20 fastest-growing tech hubs in Europe, as measured by the
annual growth in attendees to tech-related Meetup events in those cities. Zug in Switzerland, home to a growing
crypto community, ranked number one as the fastest-growing community overall.
Top 20 fastest-growing tech hubs in Europe
by year-on-year growth of attendees to tech-
related Meetup events per city
DATASET: TOP 10 HUBS
Source:
LEGEND
YoY growth 2017-2018 (%)
Note:
2018 annualised based on RSVPs to end of September 2018.
Only hubs with at least 1,000 RSVPs in 2017 are included in the
analysis.
YoY growth (%)
177%
173%
165%
121%
101%
100%
88%
77%
75%
74%
Zug, Switzerland
Novosibirsk, Russia
Ghent, Belgium
The Hague, Netherlands
Katowice, Poland
Dortmund, Germany
Newcastle, United Kingdom
Sofia, Bulgaria
Essen, Germany
Cardiff, United Kingdom
0
25
50
75
100
125
150
175
200
The number of tech-related Meetup events in Europe continues to hit new highs, although the rate of year-on-year
growth is decelerating. In 2018, the level of activity on Meetup alone equates to around 200 events hosted every
single day through the year.
# of tech-related Meetups hosted in Europe
per annum
Source:
LEGEND
Events hosted
YoY growth (%)
Note:
2018 annualised based on data to end of September 2018
# MeetupsYoY growth (%)23,924
36,226
51,135
65,101
72,233
68
51
27
11
2014
2015
2016
2017
2018
0
20,000
40,000
60,000
80,000
0
20
40
60
The number of tech-related Meetup events in Europe continues to hit new highs, although the rate of year-on-year
growth is decelerating. In 2018, the level of activity on Meetup alone equates to around 200 events hosted every
single day through the year.
# of tech-related Meetups hosted in Europe
per annum
Source:
LEGEND
Events hosted
YoY growth (%)
Note:
2018 annualised based on data to end of September 2018
# MeetupsYoY growth (%)23,924
36,226
51,135
65,101
72,233
68
51
27
11
2014
2015
2016
2017
2018
0
20,000
40,000
60,000
80,000
0
20
40
60
The number of tech-related Meetup events in Europe continues to hit new highs,
although the rate of year-on-year growth is decelerating. In 2018, the level of activity on
Meetup alone equates to around 200 events hosted every single day through the year.
When cities succeed in building active communities around their engineering talent, as measured by the number
of tech-related Meetup events hosted per local developer, the data suggests that capital investment follows in
larger volumes.
Number of tech-related Meetups per
developer versus total capital invested (2013
to 9M 2018) per city, selected European cities
Source:
# Meetups per developer
Capital invested ($M)Berlin
London
Dublin
Hamburg
Stockholm
Paris
Amsterdam
Prague
Kiev
Cologne
0.00
0.10
0.02
0.05
0.07
0.12
0.15
0.00
10,000.00
20,000.00
-10,000.00
When cities succeed in building active communities around their engineering
talent, as measured by the number of tech-related Meetup events hosted per
local developer, the data suggests that capital investment follows in larger
volumes. The strength of tech community development is a critical leading
indicator signposting the future potential of the European tech ecosystem.
There is huge geographic diversity amongst the Top 20 fastest-growing tech hubs in Europe, as measured by the
annual growth in attendees to tech-related Meetup events in those cities. Zug in Switzerland, ho e to a growing
crypto community, ranked number one as the fastest-growing community overall.
Top 20 fastest-growing tech hubs in Europe
by year-on-year growth of attendees to tech-
related Meetup events per city
DATASET: TOP 10 HUBS
Source:
LEGEND
YoY growth 2017-2018 (%)
Note:
2018 annualised based on RSVPs to end of September 2018.
Only hubs with at least 1,000 RSVPs in 2017 are included in the
analysis.
YoY growth (%)
177%
173%
165%
121%
101%
1 0
88%
77%
75%
74
Zug, Switzerland
Novosibirsk, Russia
Ghent, Belgium
The Hague, Netherlands
Katowice, Poland
Dortmund, Germ y
Newcastle, United Kingdom
Sofia, Bulgaria
Essen, Germ ny
Cardiff, United Kingdom
0
25
50
75
100
125
150
175
200
undefined66
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Growing Communities
05.1
In Europe's largest and most mature tech communities, there are signs of a slowdown in the level of participation
around tech-related Meetup events, but outside those leading hubs there continues to be rapid growth in
engagement, including in cities such as Hamburg, Zurich, Manchester or Wroclaw.
Top 20 hubs by level of tech Meetup activity
in 2018, ranked by number of Meetup
attendees
Source:
LEGEND
London
Berlin
Paris
Amsterdam
Munich
Note:
2018 annualised based on RSVPs to end of September 2018
# Meetup attendees150,866
209,386
292,792
315,839
315,497
35,714
61,313
105,118
153,528
160,608
83,239
136,537
37,333
63,857
81,746
84,647
11,492
41,471
2014
2015
2016
2017
2018
0
100,000
200,000
300,000
In Europe's largest and most mature tech communities, there are signs of a slowdown in the level of participation
around tech-related Meetup events, but outside those leading hubs there continues to be rapid growth in
engagement, including in cities such as Hamburg, Zurich, Manchester or Wroclaw.
Top 20 hubs by level of tech Meetup activity
in 2018, ranked by number of Meetup
attendees
Source:
LEGEND
London
Berlin
Paris
Amsterdam
Munich
Note:
2018 annualised based on RSVPs to end of September 2018
# Meetup attendees150,866
209,386
292,792
315,839
315,497
35,714
61,313
105,118
153,528
160,608
83,239
136,537
37,333
63,857
81,746
84,647
11,492
41,471
2014
2015
2016
2017
2018
0
100,000
200,000
300,000
e tech communities, there are signs of a slowdown in the level of participation
, but outside those leading hubs there continues to be rapid growth in
h as Hamburg, Zurich, Manchester or Wroclaw.
Source:
LEGEND
Hamburg
Zurich
Stockholm
Oslo
Manchester
Note:
2018 annualised based on RSVPs to end of September 2018
# Meetup attendees8,094
15,922
27,539
40,962
43,959
11,249
19,705
28,523
36,749
18,805
22,217
36,068
36,224
12,580
24,424
31,746
32,064
3,174
6,774
13,875
20,575
2014
2015
2016
2017
2018
0
10,000
20,000
30,000
40,000
50,000
e tech communities, there are signs of a slowdown in the level of participation
, but outside those leading hubs there continues to be rapid growth in
h as Ha burg, Zuric , Manchester r Wroclaw.
Source:
LEGEND
Hamburg
Zurich
Stockholm
Oslo
Manchester
Note:
2018 annualised based on RSVPs to end of September 2018
# Meetup attendees8,094
15,922
27,539
40,962
43,959
11,249
19,705
28,523
36,749
18,805
22,217
36,068
36,224
12,580
24,424
31,746
32,064
3,174
6,774
13,875
20,575
2014
2015
2016
2017
2018
0
10,000
20,000
30,000
40,000
50,000
In Europe's largest and most mature tech communities, there are signs of a slowdown in the level of participation
around tech-related Meetup events, but outside those leading hubs there continues to be rapid growth in
engagement, including in cities such as Hamburg, Zurich, Manchester or Wroclaw.
Source:
LEGEND
Madrid
Warsaw
Barcelona
Istanbul
Dublin
Note:
2018 annualised based on RSVPs to end of September 2018
# Meetup attendees16,605
25,852
50,929
65,332
74,792
8,880
18,516
58,559
59,895
37,206
46,445
52,017
2,207
7,604
22,174
2014
2015
2016
2017
2018
0
20,000
40,000
60,000
80,000
In Europe's largest and most mature tech communities, there are signs of a slowdown in the level of participation
around tech-related Meetup events, but outside those leading hubs there continues to be rapid growth in
engagement, including in cities such as Hamburg, Zurich, Manchester or Wroclaw.
Source:
LEGEND
Madrid
Warsaw
Barcelona
Istanbul
Dublin
Note:
2018 annualised based on RSVPs to end of September 2018
# Meetup attendees16,605
25,852
50,929
65,332
74,792
8,880
18,516
58,559
59,895
37,206
46,445
52,017
2,207
7,604
22,174
2014
2015
2016
2017
2018
0
20,000
40,000
60,000
80,000
In Europe's largest and most mature tech communities, there are signs of a slowdown in the level of participation
around tech-related Meetup events, but outside those leading hubs there continues to be rapid growth in
engagement, including in cities such as Hamburg, Zurich, Manchester or Wroclaw.
Source:
LEGEND
Budapest
Wroclaw
Vienna
Copenhagen
Frankfurt
Note:
2018 annualised based on RSVPs to end of September 2018
# Meetup attendees19,062
23,408
33,680
38,018
28,869
4,216
9,131
11,302
18,607
23,112
16,829
22,676
1,445
3,746
7,889
14,308
2014
2015
2016
2017
2018
0
10,000
20,000
30,000
40,000
In Europe's largest and most mature tech communities, there are signs of a slowdown in the level of participation
around tech-related Meetup events, but outside those leading hubs there continues to be rapid growth in
engagement, including in cities such as Hamburg, Zurich, Manchester or Wroclaw.
Source:
LEGEND
Budapest
Wroclaw
Vienna
Copenhagen
Frankfurt
Note:
2018 annualised based on RSVPs to end of September 2018
# Meetup attendees19,062
23,408
33,680
38,018
28,869
4,216
9,131
11,302
18,607
3,112
16,829
22,676
1,445
3,746
7,889
14,308
2014
2015
2016
2017
2018
0
10,000
20,000
30,000
40,000
In Europe's largest and most mature tech communities, there are signs of a slowdown in
the level of participation around tech-related Meetup events, but outside those leading
hubs there continues to be rapid growth in engagement, including in cities uch as
Hamburg, Zurich, Manchester or Wroclaw.
DATASET: TOP 5 HUBS
DATASET: HUBS 6-10
DATASET: HUBS 11-15
HUBS 16-20
In Europe's largest and most mature tech communities, there are signs of a slowdown in the level of participation
aro nd t ch- elated Meetup events, but outside those leading hubs there continues to be rapid growth in
engagement, inclu ing in cities such as Hamburg, Zurich, Manche ter or Wroclaw.
Top 20 hubs by level of tech Meetup activity
in 2018, ranked by number of Meetup
attendees
Source:
LEGEND
London
Berlin
Par s
Am terdam
Munich
Note:
2018 annualised based on RSVPs to end of September 2018
# Meetup attendees150,866
209,386
292,792
315,839
315,497
35,714
61,313
105,118
153,528
160,608
83,239
136,537
37,333
63,857
81,746
84,647
11,492
41,471
2014
2015
2016
2017
2018
0
100,000
200,000
300,000
67
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The correlation between the strength of
tech community engagement within cities
and the rate of company formation and
funding has an r-squared of 0.914.
TECH COMMUNITIES AND COMPANY FORMATION
Talent is necessary, but talent alone is not
enough. Cities need to engage that talent in active
communities to drive greater levels of company
formation
0.914
Every City is a Tech City
05.2
Photo: Sami Heiskanen/ Juuso Hmlinen
undefined69
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It's interesting to compare the 'bang for buck' that different cities have achieved by measuring the level of capital
investment per local professional developer in those cities. In doing this, Berlin stands apart as a real outlier having
attracted a disproportionate level of investment relative to its local developer pool.
Top 10 European cities for capital invested ($)
per professional developer
Source:
LEGEND
Capital invested per developer ($)
European average ($)
Note:
Investment amounts are based on capital invested in the city in
aggregate between 2012 and September 2018 divided by the
total number of professional developers (2018) in the city.
Capital invested ($)$97,404
$66,337
$63,019
$45,000
$36,138
$31,255
$24,432
$19,106
$19,096
$12,224
$13,906
$13,906
$13,906
$13,906
$13,906
$13,906
Be
rlin
Lond
on
St
oc
kh
olm
Du
bli
n
Barc
elonaParisHamb
ur
g
Madr
id
He
lsi
nk
i
Cope
nh
ag
en
0
25,000
50,000
75,000
100,000
Every City is a Tech City
05.2
It's interesting to compare the 'bang for buck' different cities have achieved by measuring
across them the level of capital investment per local professional developer. Such
comparison shows Berlin stands apart as a real outlier, having attracted a disproportionate
level of investment relative to its local developer pool.
Ophelia Brown
Blossom Capital
The big change is that there are now plenty of examples of how
it's possible to create world-changing companies from all over
Europe. The emergence of global hits like UIPath from Bucharest,
Supercell from Helsinki, Farfetch from Lisbon -- all from far beyond
the unicorn-factories of London, Stockholm and Berlin - marks a
new era for Europe. However, so far founders from non-hub cities
have been inadequately served by investors who tend to focus on
the traditional geographies and are not equipped to offer the same
support when a startup originates from a small town in, for example,
Germany or Estonia."
"
The emergence of global hits like UIPath from Bucharest,
Supercell from Helsinki, Farfetch from Lisbon -- all from
far beyond the unicorn-factories of London, Stockholm
and Berlin - marks a new era for Europe.
of all tech-related Meetups in Europe that
now happen outside of the Top 20 hubs in
the region, up from 42% in 2014.
TECH HUBS EVERYWHERE
Europe's tech community outside its Top
20 hubs continues to flourish
53%
capital invested since 2013 per developer in Berlin,
the highest concentration of capital invested per
developer of any European city
CAPITAL BANG PER DEVELOPER BUCK
Berlin's relatively small professional developer
community has attracted a disproportionate
amount of capital investment compared to any other
European city, including London
$97,404
70
In Partnership with
&
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The European ecosystem bene ts from interconnectivity in a number of ways that help drive the ow of
knowledge, talent and capital. The ow of useful ideas and knowledge throughout the European tech ecosystem is
enabled by exchanges between counterparts, whether founders or investors.
I have exchanged useful ideas and knowledge
with my counterparts from other hubs
DATASET: OCCUPATION
Source:
LEGEND
Yes
No
Note:
In subregions, only founders' and startup/scale-up employees'
responses included. In company sizes, only founders'
responses.
67%
91%
69%
33%
9%
31%
Founder or startup/
scale-up employee
Investor
Other
0
20
40
60
80
100
% of respondents
The European ecosystem bene ts from interconnectivity in a number of ways that help drive the ow of
knowledge, talent and capital. The ow of useful ideas and knowledge throughout the European tech ecosystem is
enabled by exchanges betw en counterparts, whether fou ders or investors.
I have exchanged useful ideas and knowledge
with my counterparts from other hubs
DATASET: OCCUPATION
Source:
LEGEND
Yes
No
Note:
In subregions, only founders' and startup/scale-up employees'
responses included. In company sizes, only founders'
responses.
67%
91%
69%
33%
9%
31%
Founder or startup/
scale-up employee
Investor
Other
0
20
40
60
80
100
% of respondents
The European ecosystem bene ts from interconnectivity in a number of ways that help drive the ow of
knowl dge, talent and capital. The ow of useful ideas and knowledge throughout the European tech ecosystem is
e a led by exchanges between counterparts, whether founders or investors.
I have exchanged useful ideas and knowledge
with my counterparts from other hubs
DATASET: COMPANY SIZE BY # OF EMPLOYEES
Source:
LEGEND
Yes
No
Note:
In subregions, only founders' and startup/scale-up employees'
responses included. In company sizes, only founders'
responses.
% of respondents
74%
67%
77%
26%
33%
23%
<=10
11-100
100+
0
10
20
30
40
50
60
70
80
90
100
The European ecosystem bene ts from interconnectivity in a number of ways that help drive the ow of
knowledge, talent and capital. The ow of useful ideas and knowledge throughout the European tech ecosystem is
enabled by exchanges betw en c unterparts, whether founders or investors.
I have exchanged useful ideas and knowledge
with my counterparts from other hubs
DATASET: SUBREGION
Source:
LEGEND
Yes
No
Note:
In subregions, only founders' and startup/scale-up employees'
responses included. In company sizes, only founders'
responses.
% of respondents
78%
73%
79%
67%
64%
68%
65%
22%
27%
21%
33%
36%
32%
35%
Central Europe & Baltics
DACH
Eastern Europe
France & Benelux
Nordics
Southern Europe
UK & Ireland
0
20
40
60
80
100
Density, through
Interconnected Tech Hubs
The European ecosystem benefits from interconnectivity in a number of ways
that help drive the flow of knowledge, talent, and capital. Exchanges amongst
counterparts, whether founders or investors, enables the flow of useful ideas
and knowledge throughout the European tech ecosystem.
The European ecosystem bene ts from interconnectivity in a number of ways that help drive the ow of
knowledge, talent and capital. The ow of useful ideas and knowledge throughout the European tech ecosystem is
enabled by exchanges between counterparts, whether founders or investors.
I have exchanged useful ideas and knowledge
with my counterparts from other hubs
DATASET: OCCUPATION
Source:
LEGEND
Yes
No
Note:
In subregions, only founders' and startup/scale-up e ployees'
responses included. In co pany sizes, only founders'
responses.
67%
91%
69%
33%
9%
31%
Founder or startup/
scale-up employee
Investor
Other
0
20
40
60
80
100
% of respondents
DATASET: OCCUPATION
DATASET: COMPANY SIZE BY # OF EMPLOYEES
DATASET: SUBREGION
The European ecosystem bene ts from interconnectivity in number of ways that help drive the ow of
knowledge, talent and capital. The ow of useful ideas and knowledge throughout the European tech ecosystem is
enabled by exchanges between counterparts, whether founders or investors.
I have exchanged useful ideas and knowledge
with my counterparts from other hubs
DATASET: OCCUPATION
Source:
LEGEND
Yes
No
Note:
In subregions, only founders' and startup/scale-up employees'
re ponses i cluded. In compy sizes, only founders'
.
67%
91%
69%
33%
9%
31%
Founder or startup/
scale-up employee
Investor
Other
0
20
40
60
80
100
% of respondents
undefined72
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Density, through Interconnected Tech Hubs
05.3
In addition to opening o ces in new hubs to tap alternative talent pools, a large number of European founders
recruit high-performing talent from other hubs, though the likelihood of doing so increases signi cantly as the size
of the company increases.
I have recruited high-performing talent from
other hubs, by company size by # of
employees
Source:
LEGEND
Yes
No
Note:
Founder respondents only.
% of respondents
19%
35%
63%
81%
65%
37%
<=10
11-100
100+
0
10
20
30
40
50
60
70
80
90
100
Europe's tech ecosystem also bene ts from an interconnected ow of capital, driven by connections between
investors and founders across borders. Europe's VCs, in particular, are highly connected and have almost
unanimously built relationships and bene t from positive interactions with fellow investors from other hubs across
the region.
I have interacted positively with investors
from other hubs
DATASET: OC C U PATION
Source:
LEGEND
Yes
No
Note:
In subregions, only founders' and startup/scale-up employees'
responses included. In company sizes, only founders'
responses.
56%
95%
44%
5%
Founder or

startup/scale-up
employee
Investor
0
20
40
60
80
100
% of respondents
Europe's tech ecosystem also bene ts from an interconnected ow of capital, driven by connections between
investors and founders across borders. Europe's VCs, in particular, are highly connected and have almost
unanimously built relationships and bene t from positive interactions with fellow investors from other hubs across
the region.
I have interacted positively with investors
from other hubs
DATASET: OC C U PATION
Source:
LEGEND
Yes
No
Note:
In subregions, only founders' and startup/scale-up employees'
responses included. In company sizes, only founders'
responses.
56%
95%
44%
5%
Founder or

startup/scale-up
employee
Investor
0
20
40
60
80
100
% of respondents
Europe's tech ecosystem also bene ts from an interconnected ow of capital, driven by connections between
investors and founders across borders. Europe's VCs, in particular, are highly connected and have almost
unanimously built relationships and bene t from positive interactions with fellow investors from other hubs across
the region.
Source:
Note:
In subregions, only founders' and startup/scale-up employees'
responses included. In company sizes, only founders'
responses.
59%
72%
79%
41%
28%
21%
<=10
11-100
100+
0
10
20
30
40
50
60
70
80
90
100
% of respondents
Europe's tech ecosystem also bene ts from an interconnected ow of capital, driven by connections between
investors and founders across borders. Europe's VCs, in particular, are highly connected and have almost
unanimously built relationships and bene t from positive interactions with fellow investors from other hubs across
the region.
Source:
Note:
In subregions, only founders' and startup/scale-up employees'
responses included. In company sizes, only founders'
responses.
59%
72%
79%
41%
28%
21%
<=10
11-100
100+
0
10
20
30
40
50
60
70
80
90
100
% of respondents
In addition to opening offices in new hubs to tap alternative talent
pools, a large number of European founders recruit high-performing
talent from other hubs, though the likelihood of doing so increases
significantly as the size of the company increases.
Europe's tech ecosystem also benefits from an interconnected flow
of capital, driven by connections between investors and founders
across borders. Europe's VCs, in particular, are highly connected and
have almost unanimously built relationships and benefit from positive
interactions with fellow investors from other hubs across the region a
unique advantage given the diversity of the European market as a whole.
OCCUPATION
COMPANY SIZE BY # OF EMPLOYEES
Europe's tech ecosystem also bene ts from an interco nected ow of capital, driven by co nections betw en
investors and founders acro s borders. Europe's VCs, in particular, are highly co nected and have almost
unanimously built relationships and bene t from positive interactions with fellow investors from other hubs acro s
the region.
I have interacted pos tively with investors
from other hubs
DATASET: O C U PATION
Source:
LEGEND
Yes
No
Note:
In subregions, only founders' and startup/scale-up employees'
responses included. In company sizes, only founders'
responses.
56%
95%
44%
5%
Founder or

startup/scale-up
employee
Investor
0
20
40
60
80
100
% of respondents
Europe's tech ecosys em also bene ts from a interconnected ow of capital, driven by connections between
investors and founders across bor er . Europe's VCs, in par icular, are highly conn cted a d have almos
unanimously built r lationships an bene t from po tive in eractions w t fell w inv stors from other hubs across
the regi n.
I have interacted positively with investors
from other hubs
DATASET: OC C U PATION
Source:
LEGEND
Yes
No
Note:
In subregions, only founders' and startup/scale-up employees'
responses included. In company sizes, only founders'
responses.
56%
95%
44%
5%
Founder or

startup/scale-up
employee
Investor
0
20
40
60
80
100
% of respondents
73
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Europe's tech ecosystem also bene ts from a valuable series of international events that help to interconnect
hubs via network ow. The overwhelming majority of investors, and a clear majority of founders and startup
employees, have attended events in other hubs that have been useful to them.
I have attended useful events in other hubs
Source:
LEGEND
Yes
No
Note:
In subregions, only founders' and startup/scale-up employees'
responses included. In company sizes, only founders'.
% of respondents
67%
85%
67%
34%
15%
33%
Founder or startup/scale-up employee
Investor
Other
0
20
40
60
80
100
Europe's tech ecosystem also benefits from a valuable series of international
events that help to interconnect hubs via network flow. The overwhelming
majority of investors and a clear majority of founders and startup employees
have attended events in other hubs that they have found useful.
Density, through Interconnected Tech Hubs
05.3
Munish Varma
SoftBank Vision Fund
The continued development and growth of the numerous tech-hubs
across Europe will be a critical factor in incubating the next big tech
successes. Europe boasts some of the world's most progressive
universities and research institutions, contributing directly to the
growing and diverse pool of ideas and talent across London, Paris,
Berlin, Stockholm, as well as other European hubs. Governments and
policy makers across the region are also increasingly responsive to
the technology-led agenda through forward-thinking regulation and
investment in next-generation digital infrastructure. These factors
combine to provide the foundation for partnerships between bold
entrepreneurs and bold investors in building the businesses that
fundamentally disrupt the status quo."
"
The continued development and growth of the
numerous tech-hubs across Europe will be a critical
factor in incubating the next big tech successes.
Photo: Sami Valikangas
undefinedundefinedundefinedundefinedundefined79
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There are giant talent hubs that offer huge potential if the local pool can be mobilised
in the same way as in cities such as Berlin, Helsinki and Stockholm. Examples of these
large talent clusters that have not yet produced companies that have raised large sums of
capital investment include Cologne, Kiev and Vienna.
European tech has huge upside if it can unlock the potential of its latent talent pools. The size of the developer
pools in comparison to relative level of historical capital invested in them suggests that countries such as Italy,
Poland or Spain still have large potential to punch at a greater weight in the European tech ecosystem.
Scatter of countries based on size of
professional developer talent pool and
capital invested ($M) (2013 to 9M 2018)
Source:
Note:
Chart only includes countries with greater than 50,000
professional developers in 2018.
Capital invested ($M)
# of professional developersGermany
United Kingdom
France
Russia
Italy
Spain
Ukraine
Sweden
Romania
-5,000
0
5,000
10,000
15,000
20,000
25,000
30,000
0
250,000
500,000
750,000
1,000,000
There are giant talent hubs that offer huge potential if the local pool can be mobilised in the same way that has
been in achieved in cities such as Berlin, Helsinki and Stockholm. Examples of these large talent clusters that have
not yet produced companies that have raised large sums of capital investment include Cologne, Kiev and Vienna.
Scatter of cities based on size of
professional developer talent pool and
capital invested ($M) (2013 to 9M 2018)
Source:
Note:
Investment amounts are based on capital invested in the city in
aggregate between 2012 and September 2018.
Capital invested ($M)
# of professional developersLondon
Paris
Amsterdam
Cologne
Frankfurt am Main
Berlin
Brussels
Stockholm
Budapest
-5,000
0
5,000
10,000
15,000
20,000
25,000
0
100,000
200,000
300,000
400,000
European tech has huge upside if it can unlock the potential of its latent talent pools. The
size of the developer pools in comparison to relative levels of historical capital invested
in them suggests that countries such as Italy, Poland or Spain still have large potential to
punch at a greater weight in the European tech ecosystem.
New Hubs - Where Next?
undefinedundefinedIn Partnership with
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Europe is a research powerhouse. Its prolific research
community exceeds that of the U.S. and China, and is
flexing its muscle in deep tech. This research prowess
can be a strong differentiator for European tech as
science and tech further converge. The key to making
that happen: knowledge transfer and better links
between STEM and startups.
Research and
Development
Mobilising Europe's R&D talent pool
Deepening Europe's frontier tech credentials
06.1
06.2
A Look Around the Corner
ARTICLES
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If talent represents the foundations of the European tech ecosystem, its academic institutions are the bedrock.
Europe is home to 14 of the Top 50 computer science universities in the world, including 5 of the Top 10. Europe is,
in short, a factory for producing world-class computer science talent.
Europe's universities among global top 50 in
computer science and their global rank
University
Country
3
University of Oxford
United Kingdom
4
ETH Zurich
Switzerland
5
University of Cambridge
United Kingdom
9
Imperial College London
United Kingdom
10
EPF
Switzerland
14
University of Edinburgh
United Kingdom
16
Technical University of Munich
Germany
18
UCL
United Kingdom
36
Karlsruhe Institute of Technology
Germany
37
RWTH Aachen University
Germany
=42
Delft University of Technology
Netherlands
=42
Technical Univers ity of Berlin
Germany
47
LMU Munich
Germany
50
KU Leuven
Belgium
Source: Times Higher Education World University Rankings
2018
Note:
Compiled by the Times Higher Education Supplement and
gathered by CERN.
4 of the world's top 10 and 31 of the world's top 100
universities in engineering and technology are located in
Europe
Europe's universities among global top 100 in
engineering and technology and their global
rank
University
Country
3
University of Oxford
United Kingdom
5
University of Cambridge
United Kingdom
9
ETH Zurich
Switzerland
10
Imperial College London
United Kingdom
14
cole Polytechnique Fdrale de Lausanne
Switzerland
18
Delft University of Technology
Netherlands
21
Technical University of Munich
Germany
24
RWTH Aachen University
Germany
36
UCL
United Kingdom
37
KU Leuven
Belgium
38
KTH Royal Institute of Technology
Sweden
43
Tec hnical University of Berlin
Germany
45
University of Edinburgh
United Kingdom
46
University of Manchester
United Kingdom
51
Eindhoven University of Technology
Netherlands
55
Karlsruhe Institute of Technology
Germany
58
Technical University of Denmark
Denmark
75
University of Bristol
United Kingdom
77
University of Stuttgart
Germany
79
Chalmers University of Technology
Sweden
82
cole Polytechnique
France
84
University of She eld
United Kingdom
85
Aalborg University
Denmark
86
Norwegian University of Science and Technolog y
Norway
87
University of Southampton
United Kingdom
88
University of Freiburg
Germany
90
Polytechnic University of Milan
Italy
94
TU Dresden
Germany
95
University of Erlangen-Nuremberg
Germany
96
Lund University
Sweden
99
Aalto University
Finland
Source: Times Higher Education World University Rankings
2018
Note:
'Rank' refers to position in global list of top 100 institutions for
engineering and technology quali cations. Compiled by the
Times Higher Education Supplement and gathered by CERN.
Looking beyond just computer science, Europe
is home to 31 of the world's top 100 universities in
engineering and technology. These 31 universities
are distributed across 11 different countries and 29
different cities and reflect the fact that European
STEM talent is inherently spread across the region
driven by the strong academic institutions that
exist in all corners of the region. There are, in short,
clusters of world-class talent potential in every
corner of Europe.
Times Higher Education
World University Rankings 2018
Europe's universities among global top 50 in
computer science and their global rank
Europe's universities among global top 100 in
engineering and technology and their global rank
If talent represents the foundations of the European
tech ecosystem, its academic institutions are
the bedrock. Europe is home to 14 of the Top 50
computer science universities in th world, including
5 of the Top 10. Europe is, in short, a factory for
producing world-class computer science talent.
Mobilising Europe's R&D talent
pool
undefinedundefinedundefinedundefined88
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France, Germany and the UK are the largest destinations for capital investments into European tech companies,
but there are meaningful sums being invested into deep tech companies across the region, including into
countries such as Sweden and Switzerland.
Capital invested ($M) in European deep tech
companies by country
Source:
LEGEND
2013-2017
2018
Note:
2018 based on 9 months to September 2018 and projection for
Q4 2018 based on Q3 2018.
Capital invested ($M)
4,182
1,958
1,372
604
918
611
338
313
294
288
1,752
912
351
618
145
93
United Kingdom
France
Germany
Switzerland
Sweden
Netherlands
Spain
Finland
Belgium
Austria
0
1,000
2,000
3,000
4,000
5,000
6,000
France, Germany and the UK are the largest destinations for capital investments into European tech companies,
but there are meaningful sums being invested into deep tech companies across the region, including into
countries such as Sweden and Switzerland.
Capital invested ($M) in European deep tech
companies by country
DATASE T : C OU N T RI E S 1 1- 2 0 A ND RE ST OF
E U ROP E
Source:
L E GE ND
2013-2017
2018
Note:
2018 based on 9 months to September 2018 and projection for
Q4 2018 based on Q3 2018.
Capital invested ($M)
236
192
170
56
114
71
57
62
60
50
149
39
83
40
151
44
87
41
0
0
0
4
Ireland
Italy
Norway
Cyprus
Russia
Denmark
Portugal
Poland
Romania
Estonia
Rest of Europe
0
50
100
150
200
250
300
r
,
r
y
t

r t
l r
st
sti
ti
s f r
it l i v st
ts i t
r
t

i s,
t t
r r
i
f l s
s
i
i v st
i t
t

i s
r ss t
r
i
, i
l
i
i t
tri s s
s


itz rl
.
Capital invested ($ ) in European deep tech
co panies by country
DATASE T : C OU N T RI E S 1 1- 2 0 A ND RE ST OF
E U ROP E
Source:
L E GE ND
2013-2017
2018
Note:
2018 based on 9 months to September 2018 and projection for
Q4 2018 based on Q3 2018.
Capital invested ($M)
236
192
170
56
14
71
57
62
60
50
149
39
83
40
151
44
87
41
0
0
0
4
Ireland
Italy
Norway
Cyprus
Ru sia
Denmark
Portugal
Poland
Romania
Estonia
Rest of Europe
0
50
100
150
200
250
300
The level of capital invested into European deep tech companies exceeded $5B again in 2018 across more than 800
deals. This investment encompasses both companies that are working on solving core technology problems, as
well as those companies that are applying deep technology to seek to transform a range of target industries.
Capital invested ($B) in and # of deals closed
by European deep tech companies
Source:
L EGE ND
Capital invested ($B)
# of deals
Note:
2018 based on 9M to September 2018 and projection for Q4 2018
based on Q3 2018.
Capital invested ($B)# of deals0.7
1.6
2.4
3.2
4.3
4.6
615.0
857.0
1,075.0
784.0
2013
2014
2015
2016
2017
2018
0.0
1.0
2.0
3.0
4.0
5.0
200.0
400.0
600.0
800.0
1,000.0
DATASET: TOP 10 COUNTIRES
DATASET: COUNTRIES 11-20
Deepening Europe's frontier
tech credentials
Europe has experienced rapid growth in
investments into deep tech.
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The tech and policy worlds are moving closer together
as they seek to bridge any differences and avoid talking
past each other. Founder opinions are balanced on GDPR
and the general direction of tech policy in the region.
Data privacy and content copyright continue to dominate
policy discussion, and regulators are overlooking new key
technology fields.
Regulation
Embracing Regulation
Evolving Tech Policy in Europe
What Founders Want
07.1
07.2
07.3
Bridging Tech & Policy
ARTICLES
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There is, however, clear evidence of a strong desire from within Europe to build bridges between the tech and
policy spheres. A majority of founders, investors and policymakers agree that there should be stronger ties
between European tech startups/scapeups and governments
European tech startups and scale-ups need
stronger ties with governments
Source:
LEGEND
Agree
Neither agree nor disagree
Disagree
% of respondents
Founder or startup/scale-up employee
Venture capitalist
Policymaker or employee in the public
sector
0
20
40
60
80
100
There is clear evidence of a strong desire from within Europe to build bridges between the
tech and policy spheres. A majority of founders, investors and policymakers agree that
there should be stronger ties between European tech startups/scaleups and governments.
Embracing Regulation
Photo: Sami Heiskanen
92
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Only 24% of total respondents believe that regulation has had a negative impact on the
European tech industry in the past 12 months. This varies, however, by occupation and
region. Respondents from France are most positive on the impact of regulation, while
founders skew slightly more negative than positive, but only by a fraction.
Only 24% of total respondents believe that regulation has had a negative impact on the European tech industry in
the past 12 months. This varies, however, by occupation and region. Respondents from France are most positive
on the impact of regulation, while Founders skew slightly more negative than positive, but only by a fraction.
What impact has regulation in Europe had on
the European tech industry in the last 12
months?
Source:
LEGEND
Positive
Neutral
Negative
All respondents
0
10
20
30
40
50
60
70
80
90
100
% of respondents
Only 24% of total respondents believe that regulation has had a negative impact on the European tech industry in
the past 12 months. This varies, however, by occupation and region. Respondents from France are most positive
on the impact of regulation, while Founders skew slightly more negative than positive, but only by a fraction.
Source:
Note:
Company size: Founder respondents only.
Founder or
startup/scale-up

employee
Investor
Policymaker or
public sector employee
Other
0
20
40
60
80
100
% of respondents
Only 24% of total respondents believe that regulation has had a negative impact
the European tech industry in
the past 12 months. This varies, however, by occupation and region. Respondents from France are most positive
on the impact of regulation, while Founders skew slightly more negative than positive, but only by a fraction.
What impact has regulation in Europe had on
the European tech industry in the last 12
months?
DATASET: SUB REGIONS
Source:
LEGEND
Positive
Neutral
Negative
Note:
Company size: Founder respondents only.
Central Europe & Baltics
DACH
Eastern Europe
France & Benelux
Nordics
Southern Europe
UK & Ireland
0
20
40
60
80
100
% of respondents
Only 24% of total respondents believe that regulation has had a negative impact on the European tech industry in
the p st 12 months. This varies, however, by occupation and region. Respondents from France are most positive
on the impact of regulation, while Founders skew slightly more negative than positive, but only by a fraction.
What impact has regulation in Europe had on
the European tech industry in the last 12
months?
DATAS ET : COMPANY S I ZE BY # OF EMP LOYEES
Source:
LEG END
Positive
Neutral
<=10
11-100
100+
0
10
20
30
40
50
60
70
80
90
100
% of respondents
DATASET: ALL RESPONDENTS
DATASET: SUBREGION
DATASET: OCCUPATION
DATASET: COMPANY SIZE BY # OF EMPLOYEES
Only 24% of total respondents believe that regulation has had a negative impact on the European tech industry in
the past 12 mon hs. This varies, how
r, by occ pation and regio . Respondents from France are most positive
on the impact f regulation, while Found rs skew slightly more negative than positive, but only by fraction.
What impact has regulation in Europe had on
the European tech industry in the last 12
months?
Source:
LEGEND
Positive
Neutral
Negative
All respondents
0
10
20
30
40
50
60
70
80
90
100
% of respondents
Embracing Regulation
07.1
Only 24% of total respondents believe that regulation has had a negative impact on the European tech industry in
the past 12 months. This varies, however, by occupation and region. Respondents from France are most positive
on the impact of regulation, while Founders skew slightly more negative than positive, but only by a fraction.
Source:
Note:
Company size: Founder respondents only.
Founder or
startup/scale-up

employee
Inv stor
Policymaker or
public sector employee
Other
0
20
40
60
80
100
% of respondents
Only 24% of total respondents believe that regulation has had a negative impact o the European tech industry in
the past 12 months. This varies, however, by occupation and region. Respondents from France are most positive
on the impact of regulation, while Founders skew slightly more negative than positive, but only by a fraction.
Source:
Note:
Company size: Founder respondents only.
Founder or
startup/scale-up

employee
Investor
Policymaker or
public sector employee
Other
0
20
40
60
80
100
% of respondents
Only 24% of total respondents believe that regulation has had a negative impact on the European tech industry in
the past 12 months. This varies, however, by occupation and region. Respondents from France are most positive
on the impact of regulation, while Founders skew slightly more negative than positive, but only by a fraction.
Source:
Note:
Company size: Founder respondents only.
Founder or
startup/scale-up

employee
Investor
Policymaker or
public sector employee
Other
0
20
40
60
80
100
% of respondents
Only 24% of total respondents believe that regulation has had a negative impact on the European tech industry in
the past 12 months. This varies, however, by occupation and region. Respondents from France are most positive
on the impact of regulation, while Founders skew slightly more negative than positive, but only by a fraction.
Source:
Note:
Company size: Founder respondents only.
Founder or
startup/scale-up

employee
Investor
Policymaker or
public sector employee
Other
0
20
40
60
80
100
% of respondents
93
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Embracing Regulation
07.1
Six months after the implementation of GDPR, Founders across Europe view data
protection and privacy as the most challenging area of regulation for their business.
Six months after the implementation of GDPR, Founders across Europe view data protection and privacy as the
most challenging area of regulation for their business.
Which one area of regulation do you view as
most challenging for your company in 2018?
Source:
LEGEND
upto 35
25 to 30
20 to 25
15 to 20
10 to 15
5 to 10
upto 5
Note:
Founder respondents only
16
14
9
14
15
6
7
4
2
6
7
27
11
8
9
14
5
3
3
5
5
12
25
7
12
13
16
7
4
3
3
1
7
21
16
14
9
7
3
3
3
4
6
13
22
16
10
11
8
5
4
4
3
2
15
25
17
15
11
9
2
3
8
2
3
6
35
13
10
5
6
4
3
2
3
1
17
Data protec
tio
n and
privacy
Em
plo
ym
entCo
mpetitionTax
Ce
rtific
ationCo
py
rightPate
nts
Co
ns
um
er protec
tio
nLic
ensingData lo
calis
ationNo
ne
of
th
es
e a
re
as
Central Europe & Baltics
DACH
Eastern Europe
France & Benelux
Nordics
Southern Europe
UK & Ireland
There's a clear split in opinion within the industry on the question of whether
European regulators act with the interests of tech startups in mind. Founders,
most notably, are inclined to be sceptical of the motivations of European
regulators, especially those from the DACH region.
There's a clear split in opinion within the industry on the question of whether European regulators act with the
interests of tech startups in mind. Founders, most notably, are inclined to be sceptical of the motivations of
European regulators, especially those from the DACH region
Where relevant, do you believe that European
regulators act with the interests of tech
startups in mind?
DATASE T: S U BR E G ION
Source:
LE G E ND
Yes
No
% of respondents
47%
35%
54%
53%
47%
45%
43%
53%
65%
46%
47%
53%
55%
57%
Central Europe & Baltics
DACH
Eastern Europe
France & Benelux
Nordics
Southern Europe
UK & Ireland
0
20
40
60
80
100
There's a clear split in opinion within the industry on the question of whether European regulators act with the
interests of tech startups in mind. Founders, most notably, are inclined to be sceptical of the motivations of
European regulators, especially those from the DACH region
Where relevant, do you believe that European
regulators act with the interests of tech
startups in mind?
DATASE T: O CCU PATI O N
Source:
LE GE ND
Yes
No
% of respondents
55%
47%
46%
47%
55%
44%
59%
36%
57%
48%
73%
60%
45%
45%
53%
54%
53%
45%
56%
41%
64%
43%
52%
27%
40%
55%
Academic/researcher
Angel investor
Employee at a private company that is
not a tech startup/scale-up
Employee at a private tech startup or
scale-up
Employee at a publicly listed non-tech
company
Employee at a publicly listed tech
company
Employee in the public sector
Founder
Media/Journalist
Other investor
Policymaker/regulator
Student
Venture capitalist
0
20
40
60
80
100
DATASET: OCCUPATION
DATASET: SUBREGION
There's a clear split in opinion within the industry on the questio of whether Europe n regulat rs ct with the
inte ests of tech startups in mind. Founders, most notably, are inclined to be sceptical of the motivations of
European regulators, especially those from the DACH region
Where relevant, do you believe that European
regulators act with the interests of tech
startups in mind?
DATAS ET: S UB REG ION
Source:
LEG END
Yes
No
% of respondents
47%
35%
54%
53%
47%
45%
43%
53%
65%
46%
47%
53%
55%
57%
Central Europe & Baltics
DACH
Eastern Europe
France & Benelux
Nordics
Southern Europe
UK & Ireland
0
20
40
60
80
100
There's a clear split in opinion within the industry on the question of whether European regulators act with the
int
ts of tech s artu s in mind. Founders, most otably, are i clined to be sceptic l of the motivations of
European regulators, especially those from the DACH r gion
Where relevant, do you believe that European
regulators act with the interests of tech
startups in mind?
DATASE T: S U BR E G ION
Source:
LE G E ND
Yes
No
% of respondents
47%
35%
54%
53%
47%
45%
43%
53%
65%
46%
47%
53%
55%
57%
Central Europe & Baltics
DACH
Eastern Europe
France & Benelux
Nordics
Southern Europe
UK & Ireland
0
20
40
60
80
100
Six months after the implementation of GDPR, Founders across Europe view data protection and privacy as the
most challenging area
regulation for their busines .
Which one area of regulation do you view as
most challenging for your company in 2018?
Source:
LEGEND
upto 35
25 to 30
20 to 25
15 to 20
10 to 15
5 to 10
upto 5
Note:
Founder respondents only
16
14
9
14
15
6
7
4
2
6
7
27
11
8
9
14
5
3
3
5
5
12
25
7
12
13
16
7
4
3
3
1
7
21
16
14
9
7
3
3
3
4
6
13
22
16
10
11
8
5
4
4
3
2
15
25
17
15
11
9
2
3
8
2
3
6
35
13
10
5
6
4
3
2
3
1
17
Data protec
tio
n and
privacy
Em
plo
ym
entCo
mpetitionTax
Ce
rtific
ationCo
py
rightPate
nts
Co
ns
um
er protec
tio
nLic
ensingData lo
calis
ationNo
ne
of
th
es
e a
re
as
Central Europe & Baltics
DACH
Eastern Europe
France & Benelux
Nordics
Southern Europe
UK & Ireland
94
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Embracing Regulation
07.1
This willingness to build bridges is important since key stakeholders in the European
tech ecosystem take a majority view that European regulation makes it harder to
start and scale a technology business in the region.
Opinions on whether startups/scaleups or large established tech companies feels
the regulatory burden more keenly are split. Both founders of startups/scaleups and
those who work in public tech companies both tend to think that they shoulder most
of the regulatory burden.
This willingness to build bridges is important since key stakeholders in the European tech ecosystem take a
majority view that European regulation makes it harder to start and scale a technology business in the region
European regulation makes it harder to start
and scale a technology business
Source:
LEGEND
Agree
Neither agree nor disagree
Disagree
% of respondents
Founder or startup/scale-up employee
Venture capitalist
Policymaker or employee in the public
sector
0
20
40
60
80
100
Unsurprisingly then, Founders also believe they feel more of the regulatory burden in Europe than established tech
companies. Of course, if you ask those that work at public tech companies, they are more likely to say the
opposite.
Do you think the regulatory burden in Europe
is more felt by tech startups or established
tech companies?
DATASET : SUBR EGIONS
Source:
LEGEND
Established tech companies
No difference
Tech startups
% of respondents
Central Europe & Baltics
DACH
Eastern Europe
France & Benelux
Nordics
Southern Europe
UK & Ireland
0
20
40
60
80
100
DATASET: OCCUPATION
DATASET: SUBREGIONS
Unsurprisingly then, Founders also believe they feel more of the regulatory burden in Europe than established tech
companies. Of course, if you ask those that work at public tech companies, they are more likely to say the
opposite.
Do you think the regulatory burden in Europe
is more felt by tech startups or established
tech companies?
DATASET : OCCUPAT ION
Source:
LEGEND
Established tech companies
No difference
Tech startups
% of respondents
Academic/researcher
Angel investor
Employee at a private company that is
not a tech startup/scale-up
Employee at a private tech startup or
scale-up
Employee at a publicly listed non-tech
company
Employee at a publicly listed tech
company
Employee in the public sector
Founder
Media/Journalist
Other investor
Policymaker/regulator
Student
Venture capitalist
0
20
40
60
80
100
Unsurprisingly then, Founders also believe they feel more of the regulatory burden in Europe than established tech
companies. Of course, if you ask those that work at public tech companies, they are more likely to say the
opposite.
Do you think the regulatory burden in Europe
is more felt by tech startups or established
tech companies?
DATASET : OCCUPAT ION
Source:
LEGEND
Established tech companies
No difference
Tech startups
% of respondents
Academic/researcher
Angel investor
Employee at a private company that is
not a tech startup/scale-up
Employee at a private tech startup or
scale-up
Employee at a publicly listed non-tech
co pany
Employee at a publicly listed tech
company
Employee in the public sector
Founder
Media/Journalist
Other investor
Policymaker/reg lator
Student
Venture capitalist
0
20
40
60
80
100
Unsurprisingly then, Founders also believe they feel more of the regulatory burden in Europe than established tech
companies. Of course, if you ask those that work at public tec comp nies, they are more likely to say the
opposite.
Do you think the regulatory burden in Europe
is m re felt by tech st rtups o established
tech companies?
ATASET : OCCUPAT ION
Source:
LEGEND
Established tech companies
No difference
Tech startups
% of respondents
Academic/researcher
Angel investor
Employee at a private company that is
not a tech startup/scale-up
Employee at a private tech startup or
scale-up
Employee at a publicly listed non-tech
company
Employee at a publicly listed tech
company
Employee in the public sector
Founder
Media/Journalist
Other investor
Policymaker/regulator
Student
Venture capitalist
0
20
40
60
80
100
95
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Embracing Regulation
07.1
The European tech industry's sentiment around the impact of GDPR is more balanced
than might be expected. Founders are more likely to agree it's had a negative impact on
their company than disagree, but not by a large margin. Counter-intuitively, perhaps,
founders of larger companies (100+ employees) are more likely to agree it's had a
negative impact than founders of smaller tech companies.
The European tech industry's sentiment around the impact of GDPR is more balanced than might be expected.
Founders are more likely to agree it's had a negative impact on their company than disagree, but not by a large
margin. Counter-intuitively, perhaps, fou d rs of larger companies (100+ employees) are more likely to agree it's
had a negative impact than founders of smaller tech companies
GDPR has had a negative impact on my
company
DATAS ET: AL L RES P O NDENTS
Source:
L EGEND
Agree
Neither agree nor disagree
Disagree
Note:
In company sizes only founders' responses included
All respondents
0
10
20
30
40
50
60
70
80
90
100
% of respondents
The Europ an tech industry's sentiment around the impact of GDPR is more balanced than might be expected.
Founders are more likely to agree it's had a negative impact on their company than disagree, but not by a large
margin. Counter-intuitively, perhaps, founders of larger companies (100+ employees) are more likely to agree it's
had a negative impact than founders of smaller tech companies
GDPR has had a negative impact on my
company
DATAS ET: OC C UPATION
Source:
LEG END
Agree
Neither agree nor disagree
Disagree
Note:
In company sizes only founders' responses included
% of respondents
Academic/researcher
Angel investor
Employee at a private company that is
not a tech startup/scale-up
Employee at a private tech startup or
scale-up
Employee at a publicly listed non-tech
company
Employee at a publicly listed tech
company
Employee in the public sector
Founder
Media/Journalist
Other investor
Policymaker/regulator
Student
Venture capitalist
0
20
40
60
80
100
The European tech industry's sentiment around the impact of GDPR is more balanced than might be expected.
Founders are more likely to agree it's had a negative impact on their company than disagree, but not by a large
margin. Counter-intuitively, perhaps, founders of larger companies (100+ employees) are more likely to agree it's
had a negative impact than founders of smaller tech companies
GDPR has had a negative impact on my
company
DATASET: COMPANY SIZE BY # OF EMPLOYEES
Source:
LEGEND
Agree
Neither agree nor disagree
Disagree
Note:
In company sizes only founders' responses included
% of respondents
<=10
11-100
100+
0
10
20
30
40
50
60
70
80
90
100
of all respondents agree that GDPR
has been a good thing for European
consumers, including 54% of European
founders that are in agreement.
GDPR
A clear majority of the European tech
ecosystem believes GDPR has been good
for European consumers
60%
DATASET: ALL RESPONDENTS
DATASET: OCCUPATION
DATASET: COMPANY SIZE BY # OF EMPLOYEES
The European tech industry's sentiment around the impact of GDPR is more balanced than might be expected.
Founders are more likely to agree it's had a negative impact on their company than disagree, but not by a large
margin. Counter-intuitively, perhaps, founders of larger companies (100+ employees) are more likely to agree it's
had a negative impact than founders of smaller tech companies
GDPR has had a negative impact on my
company
DATASET: ALL RESPONDENTS
Source:
LEGEND
Agree
Neither agree nor disagree
Disagree
Note:
In company sizes only founders' responses included
All respondents
0
10
20
30
40
50
60
70
80
90
100
% of respondents
Th Eur pean tech industry's sentiment around the imp ct of GDPR is more balanced than might be expected.
Founders are more likely to gr e it's had a negative impact on their company than disagree, but not by a large
margin. Counter-intuitively, perhaps, founders of larger companies (100+ employees) are more likely to agree it's
had a negative impact than founders of smaller tech companies
GDPR has had a negative impact on my
company
DATASET: ALL RESPONDENTS
Source:
LEGEND
Agree
Neither agree nor disagree
Disagree
Note:
In company sizes only founders' responses included
All respondents
0
10
20
30
40
50
60
70
80
90
100
% of respondents
undefined97
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The policy agenda in Europe around technology has been dominated by data
privacy and content copyright for the past two years.
The sentiment on the general direction of travel of European regulation around technology is also balanced
amongst founders and investors. Though 23% of European founders and 22% of European VCs believe that the
direction regulation has taken in the past year has been negative, this is countered by the 35% and 37%,
respectively, of each group that take the opposite view.
The direction of travel of European
regulation around technology is positive for
the European tech ecosystem
Source:
LEGEND
Agree
Neither agree nor disagree
Disagree
% of respondents
Founder or startup/scale-up employee
Venture capitalist
Policymaker or employee in the public
sector
0
20
40
60
80
100
The policy agenda in Europe around technology has been
dominated by data privacy and content copyright for the past
two years.
Number of mentions of key tech-related
issues in European Parliament legislative
documents by topic per year
Source:
LEGEND
FY 2017
2018*
Note:
This data looks at the number of citations of keywords related
to a number of selected technology-related issues in European
Parliament legislation, where legislation equals documentation
related to the ongoing process of law making, actual bills, etc
Number of legislative documents containing issue keywords
121
29
15
17
15
8
1
2
1
86
37
24
11
11
7
6
3
Data privacy/ GDPR
Content & copyright
Artificial Intelligence
Brexit
Fintech
Digital health
Blockchain/cryptocurrencies
Autonomous vehicles
Drones
CRISPR, Genetic editing
Digital tax
Quantum computing
0
50
100
150
200
Europe hasn't made up its
ind about whether European regulation is going in the
right direction. Founders and VCs are more likely to think it isn't, whilst those in the
public sector or in policymaking roles are more favourable.
Evolving Tech Policy in Europe
The policy agenda in Europe around technology has been
dominated by data privacy and content copyright for the past
two years.
Number of mentions of key tech-related
issues in European Parliament legislative
documents by topic per year
Source:
LEGEND
FY 2017
2018*
Note:
This data looks at the number of citations of keywords related
to a number of selected technology-related issues in European
Parliament legislation, where legislation equals documentation
related to the ongoing process of law making, actual bills, etc
Number of legislative documents containing issue keywords
121
29
15
17
15
8
1
2
1
86
37
24
11
11
7
6
3
Data privacy/ GDPR
Content & copyright
Artificial Intelligence
Brexit
Fintech
Digital health
Blockchain/cryptocurrencies
Autonomous vehicles
Drones
CRISPR, Genetic editing
Digital tax
Quantum computing
0
50
100
150
200
98
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In the UK, in particular, it's revealing to look at the relative level of discussion of key tech issues in UK government
legislative documents, activities and press releases. Brexit, unsurprisingly, has swamped everything else.
# of mentions of key tech-related issues in
UK government legislative documents by
topic per year
Source:
LEGEND
Activities
Press Releases
Legislation
Note:
This data looks at the number of citations of keywords related
to a number of selected technology-related issues in UK
government legislation, activities and press releases.
Number of legislative documents containing issue keywords
Brexit
Data privacy/GDPR
Artificial Intelligence
Blockchain/cryptocurrencies
Drones
Fintech
Autonomous vehicles
Content & copyright
Digital health
Quantum computing
CRISPR, Genetic editing
Digital tax
0
250
500
750
1,000
1,250
1,500
1,750
In the UK, in particular, it's revealing to look at the relative level of discussion of key
tech issues in UK government legislative documents, activities and press releases.
Brexit, unsurprisingly, has swamped everything else.
Evolving Tech Policy in Europe
07.2
Photo: Esa Pekka Mattila
undefinedundefinedundefinedIn Partnership with
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2018 set a new record for total capital invested in the
European tech ecosystem, as European VC's returns are
now highly competitive against private equity in the U.S.
The region's investor base has also evolved as high net-
worth individuals and family offices participate, even as
pension funds have not stepped up their commitments and
are failing to democratise European tech's returns.
Investors &
Investment
European Capital Flows
Capital Flows by Geography and Industry
Expanding European Investor Base
Bridging the Funding Gap
Diversifying the Institutional Investor Base
08.1
08.2
08.3
08.4
08.5
Following the Money
ARTICLES
103
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The European tech ecosystem will once again see a record level of capital investment in 2018. Total investment is
projected to hit $23B, comfortably exceeding the $19.6B invested in 2017 and now 4.4x up compared to the levels of
investment from 2013.
Capital invested ($B) and # of deals per year
LEGEND
Capital invested ($B)
# of deals
Note:
All Dealroom.co data excludes the following: biotech,
secondary transactions, debt, lending capital, grants. Please
also note the data excludes Israel. 2018 based on 9M to
September 2018 and projection for Q4 2018 based on Q3 2018
Capital invested ($B)# of deals5.2
8.6
14.0
14.6
19.6
23.0
2,728.0
3,350.0
3,220.0
2,609.0
2013
2014
2015
2016
2017
2018
0.0
5.0
10.0
15.0
20.0
25.0
1,500.0
2,000.0
2,500.0
3,000.0
3,500.0
For additional context on annual capital investment into the European tech ecosystem, it is important to
understand there is a material trend in effect that means that many rounds are only captured with a signi cant
delay (see note). This 'reporting lag' means that the nal totals are not known until a signi cant time period has
elapsed after the end of the year in question. As such, we have indicatively adjusted the annual totals to account
for this reporting lag to enable a like-for-like comparison of overall investment trends at the European level.
Capital invested ($B), annual, 2013-2018,
adjusted for reporting lag effect
LEGEND
Capital invested ($)
Adjusted for reporting lag
Note:
The reporting lag is the difference between the date of a
round's disclosure and the reported date of a round's
occurrence, resulting in a material % of rounds only being
added with a long delay. This is estimated at 97% for 2017 and
90% for 2018.
Capital invested per year ($B)$5B
$9B
$14B
$15B
$20B
$23B
$B
$B
$B
$B
$1B
$3B
2013
2014
2015
2016
2017
2018
0
5
10
15
20
25
30
For additional context on annual capital investment into the European tech
ecosystem, it is important to understand there is a material trend in effect
that means many rounds are only captured with a significant delay (see note).
This 'reporting lag' means that the final totals are not known until a significant
time period has elapsed after the end of the year in question. As such, we have
indicatively adjusted the annual totals to account for this reporting lag to enable a
like-for-like comparison of overall investment tr nds at the Eu opean l vel.
The European tech ecosystem will once again see a record level of capital investment in
2018. Total investment is projected to hit $23 billion, comfortably exceeding the $19.6 billion
invested in 2017 and now 4.4x up compared to the levels of investment from 2013.
European Capital Flows
104
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For additional context on the annual number of deals in the European tech ecosystem, it is
important to understand that there is a material trend in effect that means that many rounds
are only captured with a significant delay (see note). This 'reporting lag' means that the final
totals are not known until a significant time period has elapsed after the end of the year in
question. As such, we have indicatively adjusted the annual totals to account for this reporting
lag to enable a like-for-like comparison of overall investment trends at the European level.
Of course, the exact quarterly investment amounts per quarter are subject to ups and
downs so it is helpful to look at trailing 12-month totals to get a sense for the 'smoothed'
long-term investment trends in the region. On this basis, the overall trajectory of the
European tech ecosystem since late 2013 is very clear.
In 2013, $1 billion of capital invested per quarter in Europe was the norm, but as the
ecosystem has evolved that bar has consistently been raised higher. Europe has
now seen more than $3 billion invested per quarter for 15 consecutive quarters and
even $5 billion per quarter for the past 6 straight quarters.
European Capital Flows
08.1
For additional co text on the annual number of deals in the Europea tech ecosystem, it is important to
understand there is a material trend in effect that means many rounds are only captured with a signi cant delay
(see note). This 'reporting lag' means that the nal totals are not known until a signi cant time period has elapsed
after the end of the year in question. As such, we have indicatively adjusted the annual totals to account for this
reporting lag to enable a like-for-like comparison of overall investment trends at the European level.
Number of rounds, annual, 2013-2018,
adjusted for reporting lag effect
LEGEND
# of deals
Adjusted for reporting lag
Note:
The reporting lag is the difference between the date of a
round's disclosure and the reported date of a round's
occurrence, resulting in a material % of rounds only being
added with a long delay. This is estimated at 90% for 2017 and
70% for 2018.
1,712
2,174
2,728
3,350
3,220
2,609
358
1,343
2013
2014
2015
2016
2017
2018
Of course, the exact quarterly investment amounts per quarter are subject to ups and downs so it is helpful to look
at trailing 12-month totals to get a sense for the 'smoothed' long-term investment trends in the region. On this
basis, the overall trajectory of the European tech ecosystem since late 2013 is very clear.
Trailing 12-month capital invested ($B) and #
of deals by quarter
LEGEND
Capital invested ($B)
# of deals
Capital invested ($B)# of deals5.2
5.8
7.1
8.3 8.6
10.2
11.9
13.1
14.0
14.7 14.3 14.1 14.6 14.7
15.9
18.0
19.6
20.7
22.0 22.2
3,925.0
4,224.0
4,576.0
4,445.0
3,930.0
3,496.0
20
13 Q420
14 Q1
20
14 Q2
20
14 Q320
14 Q420
15 Q1
20
15 Q2
20
15 Q320
15 Q420
16 Q1
20
16 Q2
20
16 Q320
16 Q420
17
Q1
20
17
Q2
20
17
Q320
17
Q420
18 Q1
20
18 Q2
20
18 Q30.0
5.0
10.0
15.0
20.0
25.0
2,000.0
2,500.0
3,000.0
3,500.0
4,000.0
4,500.0
In 2013, $1B of capital invested per quarter in Europe was the norm, but as the ecosystem has evolved that bar has
consistently been raised higher. Europe has now seen more than $3B invested per quarter for 15 consecutive
quarters and even $5B per quarter for the past 6 straight quarters.
Capital invested ($B) and # of deals per
quarter
LEGEND
Capital invested ($B)
# of deals
Capital invested ($B)# of deals1.2 1.2 1.1
1.6 1.7
2.5
2.2
2.0
3.3
4.2
3.4
2.9
4.0 3.8
3.2
3.4
4.0
5.1 5.3 5.0 5.1
6.4
5.4
646.0
759.0
1,063.0
1,159.0
1,073.0
1,215.0
900.0
638.0
20
13
Q1
20
13
Q2
20
13
Q3
20
13
Q4
20
14
Q1
20
14
Q2
20
14
Q3
20
14
Q4
20
15
Q1
20
15
Q2
20
15
Q3
20
15
Q4
20
16
Q1
20
16
Q2
20
16
Q3
20
16
Q4
20
17
Q1
20
17
Q2
20
17
Q3
20
17
Q4
20
18
Q1
20
18
Q2
20
18
Q3
0.0
2.0
4.0
6.0
400.0
600.0
800.0
1,000.0
1,200.0
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Sentiment within the European tech ecosystem around the capital raising environment
is broadly positive. 72% of European founders and 84% of European investors believe
that it has either stayed the same or has become easier to raise VC in Europe in the past
12 months. This is very similar to responses from 2017's survey, where the equivalent
responses were 73% of founders and 83% of VCs.
European Capital Flows
08.1
Sentiment within the European tech ecosystem around the capital raising environment is broadly positive. 72% of
European founders and 84% of European investors believe that it has either stayed the same or has become easier
to raise VC in Europe in the past 12 months. This is very similar to responses from 2017's survey, where the
equivalent responses were 73% of founders and 83% of VCs.
In your opinion, is it easier or harder to raise
venture capital in Europe than it was 12
months ago?
LEGEND
Easier to raise capital
The capital environment remains unchanged
Harder to raise capital
Note:
Founder respondents only.
0
10
20
30
40
50
60
70
80
90
100
% of respondents
Founders
There are interesting perception gaps between founders and investors at the sub-regional
level. The generally high levels of optimism among investors about the changing state of
the capital raising environment in Europe over the past 12 months stand in contrast to a
more mixed view from founders in the UK, DACH and Eastern Europe.
of European founders believe the capital
environment has remain unchanged over
the past 12 months, or become easier
Projected total capital investment in
European tech in 2018, up 4.3x since 2013
RAISING CAPITAL IN EUROPE
CAPITAL INVESTMENT IN EUROPE
Founders remain upbeat about the environment for
raising capital in Europe
2018 has again set a new record for total capital
invested in the European tech ecosystem
71%
$23B
DACH region shows the largest gap between founders and
investors in how they perceive the fundraising environment
In your opinion, is it easier or harder to raise
venture capital in Europe than it was 12
months ago?
LEGEND
Founders, Easier to raise capital
Investors, Easier to raise capital
Founders, The capital environment remains
unchanged
Investors, The capital environment remains
unchanged
Founders, Harder to raise capital
Investors, Harder to raise capital
Founders
Founders
Founders
Founders
Founders
Founders
Founders
Investors
Investors
Investors
Investors
Central Europe
& Baltics
DACH
Eastern Europe
France &
Benelux
Nordics
Southern
Europe
UK & Ireland
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Europe has seen a 7x increase in the number of large rounds of $50M+, growing to 70
rounds in 2018 from just 10 in 2013.
European Capital Flows
08.1
www.thestateofeurop antech.com
Only the smallest rounds have seen a slight decrease in both capital invested and number of deals, which indicates
that round sizes are increasing
Capital invested ($M) and # of deals by round
size
LEGEND
Round size $0-2M
Round size $2-5M
Round size $5-10M
Round size $10-20M
Round size $20-50M
Round size $50M+
Capital invested ($M) / # of deals660
834
1,151
1,491
1,430
1,144
2,054
2,292
1,803
2,103
2,930
3,781
1,898
2,930
3,193
4,606
2,579
5,544
4,154
7,549
8,868
2013
2014
2015
2016
2017
2018
0
2,500
5,000
7,500
10,000
Only the smallest rounds have seen a slight decrease in both capital invested and number of deals, which indicates
that round sizes are increasing
Capital invested ($M) and # of deals by round
size
DATASET: # OF DEALS
LEGEND
Round size $0-2M
Round size $2-5M
Round size $5-10M
Round size $10-20M
Round size $20-50M
Round size $50M+
Note:
2018 annualised based on data to September 2018.
Capital invested ($M) / # of deals1,267
1,540
1,890
2,208
1,922
1,430
232
300
389
602
599
632
186
251
320
301
74
73
113
143
42
31
2013
2014
2015
2016
2017
2018
0
500
1,000
1,500
2,000
2,500
DATASET: CAPITAL INVESTED
DATASET: # OF DEALS
Note:
2018 based on 9M to September 2018 and projection for Q4
2018 based on Q3 2018
Photo: Sami Heiskanen
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On a cumulative basis since 2013, the UK has attracted $26B in total capital investments, just under 2x as much as
Germany that ranks second with $13.6B. Those two countries, together with France, account for almost 60% of
total capital invested in Europe since the start of 2013.
Capital invested ($M) by country, cumulative
(2013 - 9M 2018)
LEGEND
Cumulative capital invested ($M) 2013 - 9M 2018
Capital invested ($M)
$25,976M
$13,588M
$11,302M
$5,683M
$3,818M
$2,952M
$2,463M
$2,263M
$1,741M
$1,534M
United Kingdom
Germany
France
Sweden
Spain
Netherlands
Switzerland
Russia
Ireland
Finland
0
5,000
10,000
15,000
20,000
25,000
On a cumulative basis since 2013, the UK has attracted $26B in total capital investments, just under 2x as much as
Germany that ranks second with $13.6B. Those two countries, together with France, account for almost 60% of
total capital invested in Europe since the start of 2013.
Capital invested ($M) by country, cumulative
(2013 - 9M 2018)
DATASET: COUNTRIES 1 1-20
LEGEND
Cumulative capital invested ($M) 2013 - 9M 2018
$1,158M
$857M
$772M
$748M
$734M
$711M
$585M
$472M
$417M
$358M
Denmark
Belgium
Italy
Austria
Luxembourg
Norway
Portugal
Poland
Iceland
Estonia
0
200
400
600
800
1,000
1,200
Capital invested ($M)
On a cumulative basis since 2013, the UK has attracted $26B in total capital investments, just under 2x as much as
Germany that ranks second with $13.6B. Those two countries, together with France, account for almost 60% of
total capital invested in Europe since the start of 2013.
Capital invested ($M) by country, cumulative
(2013 - 9M 2018)
DATASET: THE REST
LEGEND
Cumulative capital invested ($M) 2013 - 9M 2018
$300M
$276M
$248M
$160M
$125M
$98M
$94M
$83M
$56M
$44M
$27M
$12M
$5M
$3M
Turkey
Cyprus
Greece
Malta
Lithuania
Romania
Czech Republic
Bulgaria
Ukraine
Latvia
Slovenia
Slovakia
Serbia
Albania
0
50
100
150
200
250
300
Capital invested ($M)
DATASET: TOP 10 COUNTRIES
DATASET: COUNTRY 11-20
DATASET: THE REST
On a cumulative basis since 2013, the UK has attracted $26 billion in total capital
investments, just under 2x as much as Germany, whic ranks s cond with $13.6 billion.
Those two countries, toget er with France, account for almost 60% of
tal capital
invested in Europe since the start of 2013.
Capital Flows by Geography
and Industry
undefined109
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Capital flows by geography and industry
08.2
This trend is also reflected in data showing deal volume by city, where the rise
in investment activities in new generation tech hubs like Milan and Oslo has
been significant in 2018.
This trend is also re ected in data showing deal volume by city, where the rise in investment activities in new
generation tech hubs like Milan and Oslo has been signi cant in 2018.
# of deals in Top 20 European hubs (ranked
by capital invested in 2018)
Source:
Note:
2018 annualised based on data to September 2018.
4
4
14
23
7
12
23
34
38
47
35
64
9
10
14
50
45
72
71
77
123
115
97
84
13
19
17
20
8
12
40
43
47
49
47
48
27
38
47
39
56
44
45
38
28
65
71
67
34
48
57
67
67
51
14
29
31
35
42
52
9
18
20
24
19
27
3
8
11
10
11
24
38
36
41
95
49
47
65
53
69
60
56
49
12
16
30
39
20
19
46
102
157
305
312
209
47
66
91
93
105
71
184
238
261
271
210
149
126
174
223
352
332
288
414
581
641
608
598
489
2013
2014
2015
2016
2017
2018
Lausanne
Milan
Oslo
Amsterdam
Tallinn
Munich
Copenhagen
Moscow
Helsinki
Zurich
Cambridge
Oxford
Dublin
Madrid
Hamburg
Stockholm
Barcelona
Berlin
Paris
London
The diversification of European tech is reflected at the city level too, as exemplified
by increased capital invested into a new generation of cities that are not typically
considered among Europe's most active tech hubs, such as Hamburg, Milan and Oslo.
The diversi cation of European tech is re ected at the city level too, as exempli ed by increased capital invested
into a new generation of cities that are not typically considered among Europe's most active tech hubs, such as
Hamburg, Milan and Oslo.
Top 20 European hubs by capital invested
($M)
Source:
Note:
2018 annualised based on data to September 2018.
17
4
31
102
28
138
11
36
44
131
63
148
8
12
57
119
121
207
218
556
277
144
354
240
24
18
53
16
6
249
111
109
167
170
253
251
22
72
135
91
64
262
130
295
72
127
608
286
184
79
83
127
108
290
70
55
53
55
110
321
20
49
94
74
116
352
9
32
135
201
53
372
98
128
99
332
309
420
67
109
116
263
307
441
18
82
134
247
191
761
374
522
916
1,044
1,016
793
70
262
334
258
568
1,044
592
1,165
2,270
948
1,824
2,221
333
600
1,065
1,332
1,686
2,607
892
1,622
3,011
3,065
5,654
4,426
2013
2014
2015
2016
2017
2018
Lausanne
Milan
Oslo
Amsterdam
Tallinn
Munich
Copenhagen
Moscow
Helsinki
Zurich
Cambridge
Oxford
Dublin
Madrid
Hamburg
Stockholm
Barcelona
Berlin
Paris
London
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Capital flows by geography and industry
08.2
projected total capital investment into
European fintech companies in 2018
CAPITAL INVESTMENT BY INDUSTRY
Fintech remained the single largest vertical for
capital investment in Europe in 2018
$5B
On average, approximately one-third of all investments into European tech companies by
European VCs involve a cross-border transaction, where an investor from one country
invests into a company from another European company. The larger the investment round,
the greater the share of total investment activity that happens in this way.
On average, approximately one-third of all investments into European tech companies by European VCs involve a
cross-border transaction, where an investor from one country invests into a company from another European
company. The larger the investment round, the greater the share of total investment activity that happens in this
way.
Share of investments made by European VCs
into international (non-domestic) companies
by round size
Source:
LEGEND
2013 - 2015
2016 - 9M 2018
% of international (non-domestic) investments made byEuropean VCs19%
21%
27%
31%
37%
33%
13%
17%
20%
21%
31%
42%
<$2M
$2M-$5M
$5M-$10M
$10M-$20M
$20M-$50M
$50M+
0
10
20
30
40
Photo: Jussi Hellsten
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Note:
2018 based on 9M to September 2018 and projection for
Q4 2018 based on Q3 2018.
Capital flows by geography and industry
08.2
There is a high level of industry diversity in terms of where capital is being invested in the
European tech ecosystem at scale. The dominant industries in 2018 are fintech, software
for enterprise applications, digital health and transportation, all of which are on track to be
in excess of $2.5 billion in total capital invested in 2018. Beyond those four industries, there
are a further four industries that will all surpass $1billion in capital invested this year.
There is a high level of industry diversity in terms of where capital is being invested in the European tech
ecosystem at scale. The dominant industries in 2018 are ntech, software for enterprise applications, digital health
and transportation, all of which are on track for in excess of $2.5B in total capital invested in 2018. Beyond those
four industries, there are a further ve industries that will all surpass $1B in capital invested this year.
Capital invested ($M) by industry
LEGEND
Fintech
Enterprise software
Health
Transportation
Capital invested ($M)$552M
$1,414M
$2,054M
$2,424M
$4,222M
$4,839M
$936M
$3,571M
$3,235M
$465M
$1,520M
$1,363M
$1,612M
$2,622M
$172M
$822M
$1,011M
2013
2014
2015
2016
2017
2018
0
1,000
2,000
3,000
4,000
5,000
There is a high level of industry diversity in terms of where capital is being invested in the European tech
ecosystem at scale. The dominant industries in 2018 are ntech, software for enterprise applications, digital health
and transportation, all of which are on track for in excess of $2.5B in total capital invested in 2018. Beyond those
four industries, there are a further ve industries that will all surpass $1B in capital invested this year.
LEGEND
Home
Media
Energy
Marketing
Fashion
Capital invested ($M)$204M
$431M
$801M
$701M
$989M
$1,514M
$571M
$266M
$1,192M
$1,062M
$346M
$1,297M
$345M
$883M
$955M
$1,093M
$1,120M
$554M
$867M
$1,015M
2013
2014
2015
2016
2017
2018
0
250
500
750
1,000
1,250
1,500
There is a high level of industry diversity in terms of where capital is being invested in the European tech
ecosystem at scale. The dominant industries in 2018 are ntech, software for enterprise applications, digital health
and transportation, all of which are on track for in excess of $2.5B in total capital invested in 2018. Beyond those
four industries, there are a further ve industries that will all surpass $1B in capital invested this year.
LEGEND
Music
Robotics
HR & Recruitment
Construction
Semiconductors
Security
Telecom
Capital invested ($M)$292M
$124M
$638M
$943M
$365M
$432M
$11M
$100M
$189M
$250M
$387M
$312M
$493M
$22M
$34M
$84M
$64M
$197M
$178M
$352M
$389M
$484M
$633M
$272M
$275M
$687M
2013
2014
2015
2016
2017
2018
0
250
500
750
1,000
There is a high level of industry diversity in terms of where capital is being invested in the European tech
ecosystem at scale. The dominant industries in 2018 are ntech, software for enterprise applications, digital health
and transportation, all of which are on track for in excess of $2.5B in total capital invested in 2018. Beyond those
four industries, there are a further ve industries that will all surpass $1B in capital invested this year.
LEGEND
Travel
Food
Internet of Things
Education
Gaming
Real estate
Capital invested ($M)$181M
$437M
$691M
$728M
$755M
$975M
$873M
$1,570M
$1,390M
$795M
$195M
$516M
$1,027M
$251M
$409M
$347M
$662M
$300M
$516M
$17M
$397M
$262M
2013
2014
2015
2016
2017
2018
0
500
1,000
1,500
DATASET: CAPITAL INVESTED $2B+ IN 2018
DATASET: CAPITAL INVESTED $1B-$2B IN 2018
DATASET: CAPITAL INVESTED $250M-$500M IN 2018
DATASET: CAPITAL INVESTED $500M-$1B IN 2018
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One of the most critical ways in which the European tech ecosystem has evolved has been the build out of the
investor base supporting it, which has grown in depth and, importantly, sophistication. One way to demonstrate
the remarkable expansion of the investor base is to look at the number of unique institutional investors that have
made at least one investment in European tech per year. In 2018, this reached more than 2,500 unique institutions,
up 2.8x since 2013
# of unique institutions that have
participated in at least 1 and 5 investment
rounds in Europe per year
LEGEND
Unique investors
# of unique investors117
151
235
285
291
267
2013
2014
2015
2016
2017
2018
0
100
200
300
One of the most critical ways in which the European tech ecosystem has evolved has been the build out of the
investor base supporting it, which has grown in depth and, importantly, sophistication. One way to demonstrate
the remarkable expansion of the investor base is to look at the number of unique institutional investors that have
made at least one investment in European tech per year. In 2018, this reached more than 2,500 unique institutions,
up 2.8x since 2013
# of unique institutions that have
participated in at least 1 and 5 investment
rounds in Europe per year
DATASET: AT LEAST 1 R OUND
Source:
LEGEND
Unique investors
Note:
Number of unique investors (incl. investment funds, corporate
investors & accelerators, but excl. angel investors) that have
participated in at least 1 investment round per year. 2018
annualised based on data to September 2018.
905
1,195
1,554
2,068
2,468
2,513
2013
2014
2015
2016
2017
2018
0
500
1,000
1,500
2,000
2,500
# of unique investorsIt's important to note, however, that more capital and more investors alone are not enough. In
order to maximise the chances of success for early-stage European startups, it's important
that capital is allocated to sophisticated investors best able to support young companies
as they navigate the scaling journey. This is proven in data. Startups raising Seed from top
investors are significantly more likely to raise a Series A.
It's important to note, however, that more capital and more investors alone are not enough. In order to maximise
the chances of success for early-stage European startups, it's important that capital is allocated to sophisticated
investors best abl to support young comp nies as they navigate the scaling journey. This is proven in data.
Startups raising Seed fr m top investors are signi cantly more likely to raise a Series A.
Median conversion rates to Series A within 36
months of Seed round, by investor quartiles
Source:
LEGEND
Conversion to Series A (%)
Median conversion rate to Series A (%)
Note:
Based on disclosed Seed and Series A rounds, conversion
rates calculated for VC funds that made at least 8 Seed rounds
since 2012, and at least 75% of rst investments at Seed/Pre-
Seed. See: https://blog.dealroom.co/the-journey-to-series-a-
in-europe/
Conversion rate from Seed to Series A (%)40%
24%
13%
7%
19%
19%
19%
19%
Top quartile
Second quartile
Third quartile
Bottom quartile
0
10
20
30
40
DATASET:AT LEAST 5 ROUNDS
DATASET:AT LEAST 1 ROUND
Note:
Number of unique investors (incl. investment funds,
corporate investors & accelerators, but excl. angel
investors) that have participated in at least 1 investment
round per year. 2018 annualised based on data to
September 2018.
Expanding European Investor
Base
One of the most critical ways in which the European tech ecosystem has evolved has been
the buildout of the investor base supporting it, which has grown in depth and, importantly,
sophistication. One way to demonstrate the remarkable expansion of the investor base
is to look at the number of unique institutional investors that have made at least one
investment in European tech per year. In 2018, this r
ched mor than 2,500 uniqu
institutions, up 2.8x since 2013
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European banks are clearly leading the charge as the most active and
frequent corporate investors in the European tech ecosystem with many
having built substantial tech company portfolios in Europe
Expanding European investor base
08.3
unique corporate investors have invested
in at least one investment round in Europe
in 2018, up more than 3x from 220 in 2013
CORPORATE INVESTMENT ACTIVITY
Corporate investors are very active in the European
tech ecosystem
681
European bank are clearly eading the ch rge as the m st active and frequent corporate investors in the
European tech ecosystem with many having built substantial tech company portfolios in Europe
Top 10 most active corporate investors in
European tech
Country
CIty
# of rounds in the last 12M
Portfolio size in Europe
Portfolio % in Europe
BNP Paribas
France
Paris
28
85
81
ZKB - Zrcher Kantonalbank
Switzerland
Zurich
20
42
98
Next47 (Siemens)
Germany
Munich
13
13
14
Barclays
United Kingdom
London
10
35
65
Allianz X
Germany
Munich
9
6
43
Robert Bosch Venture Capital
Germany
Stuttgart
9
21
52
Sabadell Venture Capital
Spain
Barcelona
8
20
100
Deutsche Telekom Capital Partners
Germany
Hamburg
8
36
44
AXA Venture Partners
France
Paris
8
18
44
Axel Springer
Germany
Berlin
7
71
76
Source:
The growth in the investor base has been supported by a diverse set of
new entrants that are deploying capital in European tech for the first
time. As in other regions, corporate investors have become active in
Europe in significantly greater numbers.
The growth i the investor base has been supp rted by a diverse set of new entrants that are deploying capital in
European tech for the rst time. As in other regions, corporate investors have become active in Europe in
signi cantly greater numbers. In 2018, more than 680 unique corporates participated in at least one investment in
Europe, up 3.1x from 220 in 2013.
# of unique corporate investors per year and
number of rounds involving at least one
corporate investor
Source:
LEGEND
# of unique corporate investors
# of deals
Note:
Unique corporate investor count is based on number of
corporate (i.e. non investment fund) investors that have
participated in at least 1 round per year. 2018 annualised based
on data to September 2018.
# of unique corporate investors / deals220
265
387
510
648
681
441
586
688
2013
2014
2015
2016
2017
2018
0
200
400
600
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US investors continue to invest actively in European tech companies,
although the number of unique institutions that have participated in at least
one investment round in 2018 is down slightly on 2017.
The influence of Asian investors in the European tech ecosystem has
grown significantly in recent years and hit a new record in 2018 in terms of
capital invested in rounds involving Asian investors, approaching close to a
projected $4billion, up from less than $200 million in 2013.
The top US investors continue to invest actively in Europe, though they
remain opportunistic and selective
Expanding European investor base
08.3
US investors continue to invest actively in European tech companies, although the number of unique institutions
that have participated in at least one investment round in 2018 is down slightly on 2017.
# of unique US institutions that have
participated in at least 1 investment round in
Europe per year
Source:
LEGEND
# of unique US investors
Note:
Number of unique investors (incl. investment funds, corporate
investors & accelerators, but excl. angel investors) that have
participated in at least 1 investment round per year. 2018
annualised based on data to September 2018.
# of unique investors153
212
235
276
311
279
2013
2014
2015
2016
2017
2018
0
100
200
300
The in uence of Asian investors in the European tech ecosystem has grown signi cantly in recent years and hit a
new record in 2018 in terms of capital invested, approaching close to a projected $4B, up from less than $200M in
2013.
Capital invested ($M) by # of deals involving
Asian investors
Source:
LEGEND
Capital invested ($M)
# of deals
Note:
2018 annualised based on data to September 2018
Capital invested ($M)# of deals165
816
1,117
1,536
3,323
3,815
27
55
83
89
152
127
2013
2014
2015
2016
2017
2018
0
1,000
2,000
3,000
4,000
0
25
50
75
100
125
150
The top US investors continue to invest actively in Europe,
though they remain opportunistic and selective.
# of deals made by Tier 1 US investors
Source:
LEGEND
# of deals
Note:
Based on investment rounds in Europe led by a selection of 22
leading US VC funds. 2018 annualised based on data to
September 2018.
49
49
58
62
81
63
2013
2014
2015
2016
2017
2018
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Note:
Number of unique investors (incl. investment funds,
corporate investors & accelerators, but excl. angel
investors) that have participated in at least 1 investment
round per year. 2018 annualised based on data to
September 2018.
European VCs are on track for a third consecutive year of raising more than $8 billion and have raised more than
$40 billion since 2013. Larger funds (>100 million) account for a growing share of total funds raised in the region.
VC funds raised ($B) and # of VC funds
closed per year by fund size (M)
LEGEND
<25M
25-50M
50-100M
100-250M
250M+
Funds raised ($B) / # of funds closed2013
2014
2015
2016
2017
H1 2018*
0
3
5
8
10
European VCs are on track for a third consecutive year of raising more than $8 billion and have raised more than
$40 billion since 2013. Larger funds (>100 million) account for a growing share of total funds raised in the region.
VC funds raised ($B) and # of VC funds
closed per year by fund size (M)
DATASET: FUNDS CLOSED
Source:
LEGEND
<25M
25-50M
50-100M
100-250M
250M+
Note:
Total funds raised are displayed in USD, but the grouping of
funds by fund size is based on EUR. Taken from the European
Data Collective, developed by Invest Europe. EDC data
converted at EUR:USD of 1.1605, the rate on 30 Sep 2018. H1
2018 preliminary.
Funds raised ($B) / # of funds closed2013
2014
2015
2016
2017
H1 2018*
0
50
100
150
200
DATASET: FUNDS CLOSED
DATASET: FUNDS RAISED
Bridging the Funding Gap
European VCs are on track for a third consecutive year of raising more than $8 billion and
have raised more than $40 billion since 2013. Larger funds (>100 million) account for a
growing share of total funds rais d in the region.
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Note:
Taken from the European Data Collective, developed by
Invest Europe. EDC data converted at EUR:USD of 1.1605,
the rate on 30 Sep 2018. H1 2018 data preliminary and
subject to change.
Bridging the Funding Gap
08.4
First-time VC funds have raised $10 billion across more than 250 funds since 2013, but follow-on funds,
unsurprisingly, account for the overwhelming majority (>75%) of total funds raised by VCs in Europe. The data for
the rst half of 2018 shows a decline in total funds raised by First-Time VC funds compared to the comparative
totals for 2017 and 2016.
Funds raised ($B) and number of funds
closed per year by fund type
LEGEND
First-Time VC Fund
First-Time VC Fund of Established Firm
Follow-on VC Fund
2013
2014
2015
2016
2017
H1 2018*
0.0
2.5
5.0
7.5
10.0
Funds raised ($B) / # of funds closedFirst-time VC funds have raised $10 billion across more than 250 funds since 2013, but follow-on funds,
unsurprisingly, account for the overwhelming majority (>75%) of total funds raised by VCs in Europe. The data for
the rst half of 2018 shows a decline in total funds raised by First-Time VC funds compared to the comparative
totals for 2017 and 2016.
Funds raised ($B) and number of funds
closed per year by fund type
DATASET: FUNDS CLOSED
Source:
LEGEND
First-Time VC Fund
First-Time VC Fund of Established Firm
Follow-on VC Fund
Note:
Taken from the European Data Collective, developed by Invest
Europe. EDC data converted at EUR:USD of 1.1605, the rate on
30 Sep 2018. H1 2018 data preliminary and subject to change.
2013
2014
2015
2016
2017
H1 2018*
0.0
50.0
100.0
150.0
Funds raised ($B) / # of funds closedFirst-time VC funds have raised $10 billion across more than 250 funds since 2013, but
follow-on funds, unsurprisingly, account for the overwhelming majority (>75%) of total
funds raised by VCs in Europe. The data for the first half of 2018 shows a decline in total
funds raised by First-Time VC funds compared to the comparative totals for 2017 and 2016.
The European investor base continues to be bolstered by the launch of new rst-time funds, often founded b
investors with strong existing track records, such as Stride.VC and Five Seasons Ventures
Selecte
rst-time fund launches in Europe
since Q4 2017
Fund size ($M)
Country
Announced/Launched
Corviglia Capital Fund
250
Luxembourg
4Q 2018
Trust Esport
11
France
4Q 2018
Norselab
10
Norway
4Q 2018
Imec.xpand
131
Belgium
3Q 2018
Raise Ventures
67
France
3Q 2018
Slingshot Ventures
64
Netherlands
3Q 2018
Indaco Venture Partners
146
Italy
2Q 2018
Stride.VC
64
UK
2Q 2018
Ring Capital
170
France
1Q 2018
Maki.vc
78
Helsinki
1Q 2018
Five Seasons Ventures
67
France
1Q 2018
Luminar Ventures
56
Sweden
1Q 2018
Brighteye Ventures
56
France
4Q 2017
Market One Capital
40
Poland
4Q 2017
Source:
The European investor base continues to be bolstered by the launch of new first-time
funds, often founded by investors with trong existing track records, such as Stride.VC and
Five Seasons Ventures.
The European investor base continues to be bolstered by the launch of new rst-time funds, often founded by
investors with strong existing track records, such as Stride.VC and Five Seasons Ventures
Selecte
rst-time fund launches in Europe
since Q4 2017
Fund size ($M)
Country
Announced/Launched
Corviglia Capital Fund
250
Luxembourg
4Q 2018
Trust Esport
11
France
4Q 2018
Norselab
10
Norway
4Q 2018
Imec.xpand
131
Belgium
3Q 2018
Raise Ventures
67
France
3Q 2018
Slingshot Ventures
64
Netherlands
3Q 2018
Indaco Venture Partners
146
Italy
2Q 2018
Stride.VC
64
UK
2Q 2018
Ring Capital
170
France
1Q 2018
Maki.vc
78
Helsinki
1Q 2018
Five Seasons Ventures
67
France
1Q 2018
Luminar Ventures
56
Sweden
1Q 2018
Brighteye Ventures
56
France
4Q 2017
Market One Capital
40
Poland
4Q 2017
Source:
DATASET: FUNDS RAISED
DATASET: FUNDS CLOSED
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Bridging the Funding Gap
08.4
The small size of European VC funds has generally been viewed as a hurdle for the
European ecosystem due to the perceived inability of European VCs to support
companies by writing meaningful growth cheques. This challenge of sub-scale funds
has started to change in the region's largest countries, but it's clear fund sizes remain
small in many sub-regions across Europe
The scale of European VC fundraising is put into perspective when compared
against the volume of capital that flows to the region's Buyout funds. Even taking
into account the record levels of funds raised by European VCs since 2016, those
sums are dwarfed by the amounts committed to European Buyout funds.
The small size of European VC funds has generally been viewed as a hurdle for the European ecosystem due to the
perceived inability of European VCs to support companies by writing meaningful growth cheques. This challenge
of sub-scale funds has started to change in the region's largest countries, but it's clear fund sizes remain small in
many sub-regions across Europe.
Median and mean fund size at nal closing by
year by sub-region
Source:
LEGEND
Median
Mean
Note:
Taken from the European Data Collective, developed by Invest
Europe. EDC data converted at EUR:USD of 1.1605, the rate on
30 September 2018.
Fund size at nal closing ($M)
$102M
$85M
$34M
$32M
$20M
$20M
$45M
$161M
$130M
$63M
$49M
$73M
$31M
$89M
UK & Ireland
DACH
France & Benelux
Southern Europe
Nordics
Central & Eastern Europe
Europe
0
25
50
75
100
125
150
175
Of course, one reason for the difference in LP commitments is as simple as the scale of the different asset
classes. European Buyout funds typically raise 7-8x as much per year as European VC funds with much larger
average fund sizes. As such, LP types that have minimum allocation requirements can commit without the
concern of being too concentrated as an anchor source of funds for an individual fund manager.
Funds raised by fund type per year
Source:
LEGEND
Buyout Funds
VC Funds
Note:
Taken from the European Data Collective, developed by Invest
Europe. EDC data converted at EUR:USD of 1.1605, the rate on
30 Sep 2018. H1 2018 data is preliminary and subject to change.
$51.1B
$42.3B
$38.3B
$71.8B
$75.5B
$37.5B
$4.4B
$5.7B
$6.9B
$9.5B
$8.9B
$4.7B
2013
2014
2015
2016
2017
H1 2018
0.0
20.0
40.0
60.0
80.0
Fund raised ($B)As the European VC ecosystem has matured, there has been a clear trend of increasing
fund sizes to better capitalise European fund managers and enable them to write larger
initial cheques, to follow on more meaningfully and also to build more diversified portfolios.
This trend continued in 2018 and has seen the median VC fund size increase to $100 million,
doubling from $51 million in 2017 and up more than 3x from $29 million in 2013.
As the European VC ecosystem has matured, there has been a clear trend of increasing fund sizes to better
capitalise European fund managers and enable them to write larger initial cheques, to follow on more meaningfully
and also to build more diversi ed portfolios. This trend continued in 2018 and has seen the median VC fund size
increase to $100 million, doubling from $51 million in 2017 and up more than 3x from $29 million in 2013.
Median and mean fund size ($M) at nal
closing by year
DATASET: ALL VC F UND S
Source:
LEGEND
All VC Funds - Mean
All VC Funds - Median
Note:
Taken from the European Data Collective, developed by Invest
Europe. EDC data converted at EUR:USD of 1.1605, the rate on
30 Sep 2018. H1 2018 data is preliminary and subject to change.
$63M
$63M
$100M
$82M
$114M
$129M
$29M
$39M
$52M
$37M
$51M
$100M
2013
2014
2015
2016
2017
H1 2018*
0
25
50
75
100
125
Fund size ($M)
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Nenad Marovac
Invest Europe
Venture capital fund managers now span the European continent.
This means investors can access best-in-class funds from the
Nordics to Central and Eastern Europe, and back dynamic businesses
which are becoming the next wave of European and world leaders."
"
Venture capital fund
managers now span the
European continent.
Michael Collins
Invest Europe
Invest Europe has worked long and hard to tackle the issue of scale
in European venture capital. The pan-European fund of funds
programme, seeded with 410 million of EU money, will give larger
investors a new way into VC. But we should not expect the response to
be immediate - steady growth in fundraising will be more sustainable
for investors and fund managers alike."
"
Steady growth in
fundraising will be more
sustainable for investors
and fund managers alike.
Bridging the Funding Gap
08.4
Photo: Samuli Pentti / Sami Valikangas
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Bridging the Funding Gap
08.4
Beyond government agencies, corporate investors and private individuals/family offices
are the largest investors in European VC funds. Pension funds, meanwhile, have only
invested $1.7B into European VCs in the five years since 2013.
Beyond government agencies, corporate investors and private individuals/family o ces are the largest investors
in European VC funds. Pension funds, meanwhile, have only invested $2.4 billion into European VCs in the ve
yea s since 2013.
Share of funds committed to VC funds by LP
type (2013-2017)
LEGEND
% of total funds raised
Note:
Taken from the European Data Collective, developed by Invest
Europe. EDC data converted at EUR:USD of 1.1605, the rate on
30 September 2018.
25.2%
15.2%
13.6%
8.6%
7.4%
6.7%
6.2%
5.1%
4.6%
3.7%
2.0%
1.1%
0.7%
Government agencies
Corporate investors
Private individuals
Fund of funds
Other asset managers (including PE
houses other than fund of funds)
Pension funds
Family offices
Banks
Endowments and foundations
Insurance companies
Capital markets
Sovereign wealth funds
Academic institutions
0.0
5.0
10.0
15.0
20.0
25.0
Share of total funds committed (%)
Private individuals & family offices have contributed $5B to European VC since 2013.
European tech growth and success has not gone unnoticed by family o ces and high net-worth individuals
(HNWs). Over the last ve years, they have collectively invested over $5 billion in European venture capital funds.
Only government agencies have invested more in European VC in that same period.
Top 3 LP types in European VC by % of total
funds committed (2013-2017)
LEGEND
VC funds ($B)
Note:
Taken from the European Data Collective, developed by Invest
Europe. EDC data converted at EUR:USD of 1.1605, the rate on
30 September 2018.
25%
20%
15%
Government agencies
Private individuals & Family offices
Corporate investors
0
5
10
15
20
25
% of total funds committed 2013-2017
Pierre Stadler
Pictet Alternative Advisors
We are seeing an increased appetite for investment in European
technology companies coming from HNW families and family
offices. Private investors, and especially multi-generational families
with millennial family members, are increasingly looking to make
impactful investments in tomorrow's new enterprises and in ideas
that could re-shape the future. The potential for very high financial
returns isn't always the major criteria driving allocations. The
attractiveness of taking part in the fascinating world of today's tech
entrepreneurs and contributing to resolve global challenges plays a
crucial role in investment decisions."
"
Private investors,
and especially multi-
generational families
with millennial family
members, are increasingly
looking to make impactful
investments in tomorrow's
new enterprises and in
ideas that could re-shape
the future.
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The European Investment Fund is, to nobody's surprise, the single most frequent supporter
of European venture capital funds, but there is a growing list of LPs that are consistently
backing European fund managers.
The poor historical performance of European VC relative to US VC and also to European Private Equity is no secret.
But European VC has been transformed in the past decade and is, as a result, not only now performing well, but is
also highly competitive on a forward-looking comparison against both European Private Equity and US VC
Horizon Pooled Return (Net) by Fund Index,
June 2018
Source: Cambridge
Associates
LEGEND
Europe Developed Venture Capital Index
Europe Developed Private Equity Index
Cambridge Associates US Venture Capital Index
MSCI Europe Index
Note:
As of June 30, 2018.
Horizon Pooled Net Return (%)6.8%
8.2%
8.4%
7.5%
15.3%
12.5%
25.0%
16.0%
15.0%
15.6%
17.2%
20.3%
29.8%
21.7%
10.3%
10.2%
16.0%
7.4%
17.2%
4.0%
2.4%
6.2%
4.2%
5.3%
25-Year
20-Year
15-Year
10-Year
5-Year
3-Year
1-Year
0.0
10.0
20.0
30.0
Top 15 most active LPs in tech-focused VC
funds in Europe
Investor name
# of known fund commitments
1
European Investment Fund
179
2
Finnish Industry Investment
28
3
CDC Entreprises
26
4
British Business Bank
20
5
AP-Fonden 6
18
6
Access Capital Partners
16
7
LGT Capital Partners
15
8
CDC Group
12
9
Pantheon
12
10
European Regional Development Fund
11
11
Bpifrance
10
12
Enterprise Ireland
10
13
European Bank for Reconstruction and Development
10
14
Industry Pension Insurance
10
15
ARKimedes Managem ent
9
Top 15 most active LPs in tech-focused VC
funds in Europe
Investor name
# of known fund commitments
1
European Investment Fund
179
2
Finnish Industry Investment
28
3
CDC Entreprises
26
4
British Business Bank
20
5
AP-Fonden 6
18
6
Access Capital Partners
16
7
LGT Capital Partners
15
8
CDC Group
12
9
Pantheon
12
10
European Regional Development Fund
11
11
Bpifrance
10
12
Enterprise Ireland
10
13
European Bank for Reconstruction and Development
10
14
Industry Pension Insurance
10
15
ARKimedes Managem ent
9
Christina Brinck
Sixth Swedish National Pension Fund
Pension funds now more interested in European venture because
pension funds look for good returns, and European venture has
shown an uplift in returns over last years. However, there are
some things holding others back from allocating to European VC.
Those include the fact that VC investments tend to have long and
deep J-curves, which requires long-term capital that can handle
illiquidity. Furthermore, a secondary market in European VC is under
development but is still immature."
"
Venture capital fund
managers now span the
European continent.
Diversifying the Institutional
Investor Base
European VC has been transformed in the past decade and is, as a result, not only now
performing well, but is also highly competitive on a forward-looking comparison against
both European Private Equity and US VC
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Diversifying the institutional investor base
08.5
www.thestateofeuropeantech.com
A material share of Europe's VCs have experienced an increase in appetite amongst
LPs for investing in European venture. Corporate LPs, family offices and private
individuals are leading the way, while pension funds and endowments, foundations
and academic institutions appear to lag
A material share of Europe's VCs have experienced an increase in appetite amongst LPs for investing in European
venture. Corporate LPs, family o ces and private individuals are leading the way, while pension funds and
endowments, foundations and academic institutions appear to lag
VC views on change in appetite of LPs for
European venture investment by LP type
(past 12m)
Source:
LEGEND
Increased appetite
Stayed the same
Decreased appetite
Note:
Venture capitalist respondents only. Respondents who
answered 'Not able to comment' ltered out.
% of respondents
Corporate investors
Family Offices & Private HNW Individuals
Government agencies (e.g. EIF)
Insurance companies
Fund of Funds
Sovereign Wealth Funds
Pension Funds
Endowments, Foundations & Academic
Institutions
0
20
40
60
80
100
Of course, one reason for the difference in LP commitments is as simple as the scale
of the different asset classes. European Buyout funds typically raise 7-8x as much per
year as European VC funds with much larger average fund sizes. As such, LP types that
have minimum allocation requirements can commit without the concern of being too
concentrated as an anchor source of funds for an individual fund manager.
Of course, one reason for the difference in LP commitments is as simple as the scale of the different asset
classes. European Buyout funds typically raise 7-8x as much per year as European VC funds with much larger
average fund sizes. As such, LP types that have minimum allocation requirements can commit without the
concern of being too concentrated as an anchor source of funds for an individual fund manager.
Funds raised by fund type per year
Source:
LEGEND
Buyout Funds
VC Funds
Note:
Taken from the European Data Collective, developed by Invest
Europe. EDC data converted at EUR:USD of 1.1605, the rate on
30 Sep 2018. H1 2018 data is preliminary and subject to change.
Fund raised ($B)$51.1B
$42.3B
$38.3B
$71.8B
$75.5B
$37.5B
$4.4B
$5.7B
$6.9B
$9.5B
$8.9B
$4.7B
2013
2014
2015
2016
2017
H1 2018
0.0
20.0
40.0
60.0
80.0
Lisa Edgar
Top Tier Capital Partners
At Top Tier we've been investing in European venture capital funds
since our inception, but most were transatlantic. Currently, we see
a real opportunity with Europe-focused funds as returns improve,
valuations remain reasonable and the ecosystem develops. The
venture business is global, and we see a proliferation of highly
qualified and experienced European entrepreneurs and fund
managers investing behind innovative technology and life science
trends to build global businesses - just like what we see in the US. As a
result, we expect to be more active in Europe through investments in
venture capital funds, secondaries and co-investments."
"
We expect to be more
active in Europe through
investments in venture
capital funds, secondaries
and co-investments.
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Diversifying the institutional investor base
08.5
Pension funds have committed 45x more capital to European Buyout funds than VC funds, equivalent to around
$75B. In fact, European VCs account for just 2% of the total capital committed to European Buyout/VC funds by
pension funds since 2013.
Funds committed to VC and Buyout Funds by
LP type (2013-2017)
VC Funds
($B)
Buyout Funds
($B)
VC as % of Total Commitments to European VC and Buyout
Funds
Multiple
(Buyout/VC)
Sovereign wealth funds
0.3
24.5
1%
90.1
Pension funds
1.7
75.6
2%
45.2
Insurance companies
0.9
19.1
5%
20.7
Fund of funds
2.2
28.6
7%
13.3
Endowments and foundations
1.1
8.4
12%
7.4
Family o ces
1.6
9.9
14%
6.4
Banks
1.3
7.8
14%
6.2
Other asset managers
1.8
11.4
14%
6.2
Private individuals
3.4
8.3
29%
2.5
Capital markets
0.5
1.1
29%
2.4
Academic institutions
0.2
0.2
42%
1.4
Corporate investors
3.8
2.8
58%
0.7
Government agencies
6.3
4.6
58%
0.7
Total of the LP types
24.9
202.3
11%
8.1
Note:
Other asset managers include PE houses other than fund of
funds. Data taken from the European Data Collective,
developed by Invest Europe. EDC data converted at EUR:USD
of 1.1605, the rate on 30 September 2018.
Pension funds have committed 45x more capital to European Buyout funds than VC funds,
equivalent to around $75B. In fact, European VCs account for just 2% of the total capital
committed to European Buyout/VC funds by pension funds since 2013.
Pension funds have committed 45x more capital to European Buyout funds than VC funds, equivalent to around
$75B. In fact, European VCs account for just 2% of the total capital committed to European Buyout/VC funds by
pension funds since 2013.
Funds committed to VC and Buyout Funds by
LP type (2013-2017)
VC Funds
($B)
Buyout Funds
($B)
VC as % of Total Commitments to European VC and Buyout
Funds
Multiple
(Buyout/VC)
Sovereign wealth funds
0.3
24.5
1%
90.1
Pension funds
1.
75.6
2%
45.2
Insurance companies
19.1
5%
20.7
Fund of funds
.
28.6
7%
13.3
Endowments and foundations
1.1
8.4
12%
7.4
Family o ces
1.6
9.9
14%
6.4
Banks
1.3
7.8
14%
6.2
Other asset managers
1.8
11.4
14%
6.2
Private individuals
3.4
8.3
29%
2.5
Capital markets
0.5
1.1
29%
2.4
Academic institutions
0.2
0.2
42%
1.4
Corporate investors
3.8
2.8
58%
0.7
Government agencies
6.3
4.6
58%
0.7
Total of the LP types
24.9
202.3
11%
8.1
Note:
Other asset managers include PE houses other than fund of
funds. Data taken from the European Data Collective,
developed by Invest Europe. EDC data converted at EUR:USD
of 1.1605, the rate on 30 September 2018.
European Buyout funds raise from a diverse LP geographic footprint, but European VCs are
overwhelmingly backed from Europe.
European Buyout funds raise from a diverse LP geographic
footprint, but European VCs are overwhelmingly backed from
Europe.
Funds raised by fund type and LP region
(2013-2017)
LEGEND
Europe
North America
Asia & Australia
Rest of the world
Note:
Taken from the European Data Collective, developed by Invest
Europe. Total may not sum to 100% due to rounding.
VC Funds
Buyout Funds
0
20
40
60
80
100
% of funds raised by LP region
Simon Cook
Draper Esprit
We believe that investors need to see different structures rather
than just the constrictive 5+5 year limited partnership. This is driven
by many issues such as liquidity, access, flexibility in the market as
well as the need for longer term capital to build bigger companies
in Europe. LPs can now see that huge success can be found in
Europe but the challenge of staying locked up in a 5+5 year fund
cycle remains unattractive. We have to remember investors don't
just compare VCs to other VCs, they have the option of investing into
any asset class. More liquidity is also attractive to entrepreneurs,
who want to be able to reward employees for hard work in the face of
huge competition for talent."
"
LPs can now see that huge success can be found in Europe
but the challenge of staying locked up in a 5+5 year fund
cycle remains unattractive. We have to remember investors
don't just compare VCs to other VCs, they have the option of
investing into any asset class.
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2018 has been a truly remarkable and record-breaking
year for outsized outcomes in the European tech
industry. Another 17 European companies hit billion-
dollar valuations, and three of the ten biggest venture-
backed public listings came from Europe, including that
of blockbuster Spotify. Doubts about the region's tech
prowess have definitively been put to rest.
Great European
Companies
Billion-Dollar Companies
Blockbuster European Tech IPOs
Spotify: Celebrating a European Milestone
The European Exit Environment
09.1
09.2
09.3
09.4
Success of a global stage
ARTICLES
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European founders have built huge businesses in a wide range of categories
The 2010s have already produced 15x more $1B+ companies by Year 8 (2018) of the
decade compared to the equivalent point (2008) of the 2000s. The cohort from that
earlier decade grew from 2 in 2008 to 31 today. Based on a similar expansion of the
cohort from the 2010s, it's not far from unrealistic to imagine 30 companies today
from this decade growing to more than 100.
European founders have built huge businesses in a wide
range of categories
# of $1B+ European tech companies founded
since 2003
Source:
LEGEND
# of $1B+ companies
Note:
$B+ European tech companies founded since 2003
14
11
9
8
6
5
3
3
1
1
Software for Enterprise Apps
Financial Services
Retail
Interactive Entertainment
Travel & Transportation
Social & Consumer Apps
Food and Drink
Real Estate
Adtech
Healthcare
The 2010s have already produced 15x more $B+ companies by Year 8 (2018) of the decade compared to the
equivalent point (2008) of the 2000s. The cohort from that earlier decade grew from 2 in 2008 to 31 today. Based
on a similar expansion of the cohort from the 2010s, it's not far from unrealistic to imagine 30 companies today
from this decade growing to more than 100.
# of European tech companies by founding
year decade that had reached a $1B+
milestone by Year 8 and Year 18 of the decade
(Year 18 for 2010s cohort illustrative only)
Source:
LEGEND
2000s
2010s
Note:
$1B+ European tech companies split by the decade of the
founding year. The 100 number shown for Year 18 of the 2010s is
illustrative only.
# of $1B+ European tech companies2
31
30
100
Year 8
Year 18
0
25
50
75
100
Sonali de Rycker
Accel
The gripe used to be that Europe had yet to prove it could be home to
multiple $1 billion+ businesses. We have decisively put that question
to rest. Momentum has accelerated, and now we are able to regularly
build businesses that surpass the $5 billion+ threshold and have
produced two in the $15 billion+ range. However, what we are missing
still is an iconic and enduring category leading business, based in
Europe that has scaled globally and is valued over $50 billion. I do
believe this too is just a matter of time."
"
The gripe used to be that Europe had yet to prove
it could be home to multiple $1 billion+ businesses.
We have decisively put that question to rest.
Billion-Dollar Companies
09.1
undefined130
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Top 10 largest VC-backed IPOs by market cap
at exit in 2018
Country
City
Amount raised ($M)
Value at IPO ($M)
Spotify
Sweden
Stockholm
9,200
26,500
Adyen
Netherlands
Amsterdam
1,045
7,810
Farfetch
United Kingdom
London
885
5,800
Avast Software
Czech Republic
Prague
195
3,168
Elastic
Netherlands
Amsterdam
252
2,500
Funding Circle
United Kingdom
London
396
1,980
Home24
Germany
Berlin
165
660
Westwing
Germany
Munich
145
605
Navya
France
Villeurbanne
38
190
Marley Spoon
Germany
Berlin
51
145
Source:
Number of European tech IPOs
with an enterprise value of more
than $5B in 2018, versus just one
from the US
EUROPEAN TECH IPOS
Europe has delivered more large tech IPOs in 2018
than the US
4X $5B
As we have demonstrated in previous iterations of the State of European Tech,
there are more tech IPOs per year from Europe than the US. There are many
reasons that underpin this long-standing trend, but it is best summarised by the
fact that there are completely different characteristics that shape the environment
around access to the public markets for tech companies.
The number of tech IPOs from European companies has
steadily increased, far surpassing the US
# of tech IPOs by region
Source:
LEGEND
Europe
US
# of tech IPOs by region29
43
41
49
63
69
34
28
20
30
28
2013
2014
2015
2016
2017
2018 9M
10
20
30
40
50
60
70
Top 10 largest VC-backed IPOs by arket cap
at exit in 2018
Country
City
Amount raised ($M)
Value at IPO ($M)
Spotify
Sweden
Stockholm
9,200
26,500
Adyen
Netherlands
Amsterdam
1,045
7,810
Farfetch
United Kingdom
London
885
5,800
Avast Software
Czech Republic
Prague
195
3,168
Elastic
Netherlands
Amsterdam
252
2,500
Funding Circle
United Kingdom
London
396
1,980
Home24
Germany
Berlin
165
660
Westwing
Germany
Munich
145
605
Navya
France
Villeurbanne
38
190
Marley Spoon
Germany
Berlin
51
145
Source:
Blockbuster European Tech IPOs
2018 has been a truly remarkable and a record-breaking year for outsized outcomes in the
European tech industry, capped by Spotify's giant $25B direct listing.
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In the US, for example, most tech IPOs tend to be sponsor-backed. This means there are
financial investors, whether VCs or PE funds, that play a 'sponsoring' role in bringing these
companies to the public market. While the numbers of sponsor-backed tech IPOs per
region are similar in Europe and the US, because Europe sees far more IPO, the percentage
share of European tech IPOs that are 'sponsored' are typically lower, which is a reflection of
a greater diversity in types of companies that have access to public markets.
The number of sponsor-backed tech IPOs is stable both in
Europe and the US
# of sponsor-backed tech IPOs by region
Source:
LEGEND
Europe
US
# of sponsor-backed tech IPOs3
11
10
3
8
6
10
10
14
7
8
9
2013
2014
2015
2016
2017
2018 9M
0
5
10
15
James Clark
London Stock Exchange
Since 2014, European tech companies have IPO'd at rates far
exceeding that of US tech companies European markets, like
London's AIM, are structured to support tech listings of all sizes,
and Europe's public market investors back them. But as Europe has
stretched its lead with smaller caps, 2018 also heralded the arrival of
a series of long awaited, high profile listings, all well in excess of $1bn
in market cap, and a surge of Fintech companies on public markets.
European tech has arrived, and whether they're valued in tens of
millions or tens of billions, they bust the myths about European tech
with each new listing."
"
European tech has
arrived, and whether
they're valued in tens of
millions or tens of billions,
they bust the myths about
European tech with each
new listing.
European tech IPOs far exceed those in the US by volume due to the fact that European
capital markets are supportive of enabling companies of all sizes by enterprise value,
whether $1B+ or sub-$100M, to come to market.
Many more European tech SMEs choose to go public
indicating Europe's supportive listing environment for earlier
stage companies
# of tech IPOs with less than $1B market cap
at IPO by year and region
Source:
LEGEND
Europe
US
# of tech IPOs with less than $1B market cap at IPO29
28
36
46
56
62
23
16
15
15
11
2013
2014
2015
2016
2017
2018 9M
0
10
20
30
40
50
60
Blockbuster European Tech IPOs
09.2
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Blockbuster European Tech IPOs
09.2
Europe's notably strong performance in terms of delivering its largest ever crop
of large-cap venture-backed European tech IPOs has also been followed with
strong weighted aftermarket performance.
Smaller cap European tech companies make up the majority of European tech
companies, a reflection of the fact that founders of European tech companies
take advantage of the fact that there are many different paths to raising the
capital required to support and grow their companies.
European tech IPO vintages have been able to compete with
Americans in aftermarket performance
Weighted aftermarket performance of Tech
IPOs by vintage year (%)
Source:
LEGEND
Europe
US
Weighted aftermarket performance64%
100%
100%
39%
100%
222%
149%
165%
42%
2013
2014
2015
2016
2017
2018 9M
0
50
100
150
200
The US still have two times more $1B+ exits than Europe
# of tech IPOs with $1B+ market cap at IPO by
year and region
Source:
LEGEND
Europe
US
# of tech IPOs with $1B+ market cap at IPO0
15
5
3
7
7
11
10
12
5
15
17
2013
2014
2015
2016
2017
2018 9M
0
5
10
15
Natalie Massenet
Imaginary Ventures
The advantage of European startups is that they have an aptitude
for complexity in their DNA. This comes from looking at various
markets, making sure their intellectual property is protected
internationally, and approaching customers with a multicultural
focus. The nimbleness of European startups - which comes from
not having as much capital chasing them as U.S. startups - has also
taught them well what the essentials of their business are and how
to be customer facing."
"
The advantage of
European startups is that
they have an aptitude for
complexity in their DNA.
undefined134
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Pr-Jrgen Prson
Northzone
Spotify is truly a game changer for the entrepreneurial ecosystem
across all of Europe. With a relentless focus on doing things better
and differently, they successfully outcompeted even giants such as
Apple, Google and Amazon. The direct listing was another example
of Spotify's famous out of the box thinking. Having concluded that
the traditional and outdated way to IPO wasn't optimal neither for the
company nor its shareholders and prospective shareholders, they
embarked on a course few other companies would have dared - and
succeeded.

The founders Daniel Ek and Martin Lorentzon had decided already at
the get go on April 1, 2006 to go big or go home. They were successful
entrepreneurs already then and managed to attract the best talent
around when they set out to disrupt a notoriously difficult industry
that had already claimed a number of startup casualties. They
respected the rights-holders and managed to convince an industry to
change its business model over a period of five years.

Today, the music business is as healthy as ever, and Spotify enabled
that change.

I am so grateful and humbled to have played a role as first institutional
investor and board member over 9 years in a seminal company."
"
Spotify is truly a game changer for the
entrepreneurial ecosystem across all
of Europe. With a relentless focus on
doing things better and differently, they
successfully outcompeted even giants
such as Apple, Google and Amazon.
Note:
This is just a small selection of
former Spotifiers that are now
helping to build or invest in a
new generation of companies.
Due to constraints, it is not
intended to be complete.
Founder
Investor
Builder
Spotify: Celebrating a
European Milestone
Spotifiers are founding, building and investing in a
new generation of European tech companies
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2018 has been a truly remarkable and a record-breaking year for outsized outcomes in the European tech industry,
capped by Spotify's giant $25B direct listing. In total, the Top 10 exits of 2018 had a combined of more than $50B.
Top 10 largest VC-backed exits by value at
exit in 2018, IPO & M&A
Exit type
Country
City
Value at IPO / EV in M&A ($M)
Spotify
IPO
Sweden
Stockholm
26,500
Adyen
IPO
Netherlands
Amsterdam
7,810
Farfetch
IPO
United Kingdom
London
5,800
Avast Software
IPO
Czech Republic
Prague
3,168
Zoopla
M&A
United Kingdom
London
2,904
Elastic
IPO
Netherlands
Amsterdam
2,500
iZettle
M&A
Sweden
Stockholm
2,200
Funding Circle
IPO
United Kingdom
London
1,980
Mendix
M&A
Netherlands
Amsterdam
730
Trendyol
M&A
Turkey
Istanbul
728
Source:
Top 10 largest VC-backed M&A exits by value
at exit in 2018
Country
City
EV ($M)
Zoopla
United Kingdom
London
2,904
iZettle
Sweden
Stockholm
2,200
Mendix
Netherlands
Amsterdam
730
Trendyol
Turkey
Istanbul
728
CCP Games
Iceland
Reykjavik
425
Shazam
United Kingdom
London
400
NewVoiceMedia
United Kingdom
Basingstoke
350
Relayr
Germany
Berlin
300
Gram Games
Turkey
Istanbul
250
MetaPack
United Kingdom
London
230
Source:
2018 has been a truly remarkable and a record-breaking year for outsized outcomes in the European tech industry,
capped by Spotify's giant $25B direct li ti
. In total, the Top 10 exits of 2018 had a combined of more than $50B.
Top 10 largest VC-backed exits by value at
exit in 2018, IPO & M&A
Exit type
Country
City
Value at IPO / EV in M&A ($M)
Spotify
IPO
Sweden
Stockholm
26,500
Adyen
IPO
Netherlands
Amsterdam
7,810
Farfetch
IPO
United Kingdom
London
5,800
Avast Software
IPO
Czech Republic
Prague
3,168
Zoopla
M&A
United Kingdom
London
2,904
Elastic
IPO
Netherlands
Amsterdam
2,500
iZettle
M&A
Sweden
Stockholm
2,200
Fu
ing Circle
IPO
Unite Kingdom
London
1,980
Mendix
M&A
Netherlands
Amsterdam
730
Trendyol
M&A
Turkey
Istanbul
728
Source:
Top 10 largest VC-backed M&A exits by value
at exit in 2018
Country
City
EV ($M)
Zoopla
United Kingdom
London
2,904
iZettle
Sweden
Stockholm
2,200
Mendix
Netherlands
Amsterdam
730
Trendyol
Turkey
Istanbul
728
CCP Games
Iceland
Reykjavik
425
Shazam
United Kingdom
London
400
NewVoiceMedia
United Kingdom
Basingstoke
350
Relayr
G rmany
Berlin
300
Gram Games
Turkey
Istanbul
250
MetaPack
United Kingdom
London
230
Source:
2018 has been a truly remarkable and a record-breaking year for outsized outcomes in the
European tech industry, capped by Spotify's giant $25B direct listing
The European Exit
Environment
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Building on top of several large European tech IPOs, Europe has also seen
significant exit value via M&A in 2018. Multibillion-dollar acquisitions, such as
iZettle's $2B+ sale to PayPal, have helped to drive the total value of M&A of VC-
backed European tech companies to $31B in the first nine months of 2018.
Building on top of several large European tech IPOs, Europe has also seen signi cant exit value via M&A in 2018.
Multi-billion acquisitions, such as iZettle's $2B+ sale to PayPal, have helped to drive the total value of M&A of VC-
backed European tech companies to $31B in the rst nine months of 2018.
European M&A exit value ($B) and count by
company type (VC-backed or not)
LEGEND
VC-backed exit value
Non-VC-backed exit value
12
19
52
25
31
35
120
61
45
2013
2014
2015
2016
2017
2018 9M
32
Building on top of several large European tech IPOs, Europe has also seen signi cant exit value via M&A in 2018.
Multi-billion acquisitions, such as iZettle's $2B+ sale to PayPal, have helped to drive the total value of M&A of VC-
backed European tech companies to $31B in the rst nine months of 2018.
European M&A exit value ($B) and count by
company type (VC-backed or not)
DATASET: EXIT COUNT
LEGEND
VC-backed exit count
Non-VC-backed exit count
Note:
M&A exit value based on total enterprise value of all tracked
transactions
94
135
243
268
303
159
142
256
543
552
584
259
2013
2014
2015
2016
2017
2018 9M
The European Exit Environment
09.4
Note:
M&A exit value based on total enterprise value of all
tracked transactions
DATASET: EXIT COUNT
DATASET: EXIT VALUE
Strong activity in M&A of VC-backed European tech companies has been
underpinned by a record number of acquisitions with an enterprise value of more
than $500 million at exit, as well as record numbers of acquisitions of European VC-
backed companies acquired for between $250 million and $500 million.
A strong for M&A of VC-backed European tech companies has been underpinned by a record number of
acquisitions with an enterprise value of more than $500M at exit, as well as record numbers of acquisitions of
European VC-backed companies acquired for between $250M and $500M.
VC-backed M&A exit count by deal size
LEGEND
$0-$100M
$100-$250M
$250-$500M
$500M+
19
24
41
42
45
25
5
11
13
17
9
9
6
1
5
4
7
11
14
2013
2014
2015
2016
2017
2018 9M
0
10
20
30
40
50
# of dealsA strong for M&A of VC-backed European tech companies has been underpinned by a record number of
acquisitions with an enterprise value of more than $500M at exit, as well as record numbers of acquisitions of
European VC-backed companies acquired for between $250M and $500M.
LEGEND
Undisclosed
12
20
23
36
65
103
2013
2014
2015
2016
2017
2018 9M
0
25
50
75
100
# of dealsDATASET: DISCLOSED EXIT VALUE
DATASET: UNDISCLOSED EXIT VALUE
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The European Exit Environment
09.4
Contrary to the popular but false narrative that European tech companies exit
primarily to US-based buyers, the share of M&A transactions of European tech
companies that involved European acquirers exceeded more than 50% of all M&A
transactions in 2018, as it has done in each of the past four years.
Contrary to the popular, but false narrative that European tech companies exit primarily to US-based buyers, the
share of M&A transactions of European tech companies that involved European acquirers exceeded more than
50% of all M&A transactions in 2018, as it has done in each of the past four years.
Share of M&A exits by buyer region by year
Source:
LEGEND
Europe
USA and Canada
Asia
Other (incl. unknown buyer counry)
Note:
Only VC-backed deals included. 2018 numbers estimated by
Dealroom.co.
# of deals stacked to 100%2013
2014
2015
2016
2017
2018 9M
0
25
50
75
100
Europe's traditional companies continue to look at M&A as a strategy to accelerate
their response to the digitization of their core industries and in several cases took
material bets of more than $500M. The largest single acquisition in 2018 involved
Richemont's completion of the 100% acquisition of digital commerce company,
Yoox Net-a-Porter, for an implied enterprise value of more than $5B.
Europe's traditional companies continue to look at M&A as a strategy to accelerate their response to the
digitization of their core industries and in several cases took material bets of more than $500M. The largest single
acquisition in 2018 involved Richemont's completion of the 100% acquisition of digital commerce company, Yoox
Net-a-Porter, for an implied enterprise value of $6B.
Largest acquisitions of European tech
companies by European non-tech companies
in 2018, by EV
Acquiror
Date
EV ($M)
Yoox Net-a-Porter
Richemont
May 2018
5,500
Mendix
Siemens
Aug 2018
730
Payvision
ING Group
Mar 2018
528
relayr
Munich Re
Sep 2018
300
Tails
Nestl
Apr 2018
192
Chargemaster
BP Global
Jun 2018
166
FreeAgent
RBS
Mar 2018
75
Source:
Europe's traditional companies continue to look at M&A as a strategy to accelerate their response to the
digitization of their core industries a d in several cases took material b ts of more than $500M. The large
acquisition i 2018 involved Richem nt's completion of the 100% acquisition of digital commerce compan
Net-a-Porter, for an implied enterprise valu of $6B.
Largest acquisitions of European tech
companies by European non-tech companies
in 2018, by EV
Acquiror
Date
EV ($M)
Yoox Net-a-Porter
Richemont
May 2018
5,500
Mendix
Siemens
Aug 2018
730
Payvision
ING Group
Mar 2018
528
relayr
Munich Re
Sep 2018
300
Tails
Nestl
Apr 2018
192
Chargemaster
BP Global
Jun 2018
166
FreeAgent
RBS
Mar 2018
75
Source:
Photo: Samuli Pentti
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Despite the region's blockbuster year, European tech
faces challenges. The journey for founders is still
convoluted, diversity lags, and institutional capital must
be more accessible. Finally, Europe needs to unlock
research potential, and tech and policymakers must
align more effectively.
Challenges
There's Lots to Overcome
10.1
Priorities for
European Tech
ARTICLES
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This year's report is another strong indication of the upward trend
in European tech. There is much to celebrate, but the report also
highlights some obvious challenges we need to address if we are to
continue the progress of the past decade.
Prioritise diversity and
inclusion
Mobilise hidden talent pools
Build density through
interconnectivity
10x pension fund
commitments to European
VC
Lose the inferiority complex
Europe's diversity and inclusion
challenges are stark. Just 4% of VC
funds go to female or mixed gender
teams in Europe. The level of funding to
other underrepresented groups is even
lower. Those numbers have not budged
in any meaningful way in recent years.
The result: Europe has lost untold
talent and value due to these issues.
This is not somebody else's problem. It
is our problem. Why are we not taking
more positive action?
There are at least 15 cities across
Europe that have more than 50,000
professional developers but have seen
less than $1B in total capital investment
since 2013 and less than $500M in
most cases. By contrast, Stockholm,
which has around 80,000 professional
developers, has attracted almost $5B
over that period. How can we get all of
those cities to punch at that level?
Europe's ecosystem is unique in its
geographic diversity. In response to
this, the region's interconnected hubs
are achieving density in a uniquely
European way. More than a third of all
investments by European VC already
flows across borders and 28% of
Europe's founders and employees have
also moved across hubs. How can we
strengthen this interconnectivity even
further?
Pension funds have committed just
$2.4B to European VCs in aggregate
since 2013, equating to less than $500M
per year. This equates to just 0.01% of
total European pension fund assets
under management of around $4
trillion. All of that despite the fact that
European VC is now competitive with
US VC and European private equity.
How can we educate and create the
right incentives and allocation models
to entice more pension funds to
support a European VC ecosystem?
There is no better proof that European
tech companies can compete on the
global stage than Spotify. It is hard to
think of a company anywhere that has
had to fight fiercer competition from
the world's largest tech companies and
never deviated from its long-term vision
despite untold distractions. And they
still ended up as the global category
leader and a trusted consumer brand
the world over. What can we learn from
Daniel and his team?
There's Lots to Overcome
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There's lots to overcome
10.1
Build an investor base to
target underrepresented
communities
Stop living in the past and
drop the cliches
Bridge the tech and policy
divide to harness tech for
good
Compensate talent and
bring it to Europe
Prioritise diversity and
inclusion
The transformation of the European
investor base into a deep and
increasingly sophisticated network
of interconnected sources of funding
has elevated European tech to
another level. But the job is not close
to being finished. Europe's challenge
is to identify and support emerging
fund managers and angels that can
target the communities that do not
have access to the same capital and
advice as those in London, Paris or
Berlin. This means a new generation
of sophisticated investors in new
geographies and explicitly seeking to
invest in diverse groups of founders.
What can we do to help incentivise
and support this next generation of
investors?
People still talk about Europe like it
can't do tech. And for sure, Europe
has historically not created as much
enterprise value from tech as the US
and China. That isn't surprising. The US
tech ecosystem has a 30-year headstart
on the European ecosystem. China is a
closed market with heavy government
support which cannot be replicated in a
region of multiple democratic countries
and languages. We need to throw away
disparaging clichs about European
tech. Europe's tech ecosystem is
flourishing and rapidly gaining 'market
share' on the global stage. If we can't
stop talking about the past, how can we
focus on the future?
European tech leaders and
policymakers want to work more closely
together, but they are still speaking
across each other today. If aligned
more closely we could create better
products and services for consumers
and help strengthen the European tech
ecosystem. How can we build a bridge
to create a European tech ecosystem
that is working in concert with its
policymakers to unlock the potential of
using tech for good?
Europe's biggest challenge, arguably,
remains a shallow pool of executive
level talent with experience scaling tech
companies to thousands of employees,
millions of users and billions of revenue.
The ecosystem is, therefore, reliant
on attracting global talent to Europe
or to luring home European talent
back from overseas. Europe now
offers compelling opportunities to
join amazing companies, but needs to
align compensation to compete with
benchmarks elsewhere. What can
Europe do to help incentivise talent
more effectively?
This challenge is so great, it should be
Europe's first and most urgent priority.
If Europe fails to make meaningful
progress on this, it will still be unable
to reach its full potential in terms of
creating value for consumers, business
and stakeholders even if it solves all the
other challenges. Some people have
started to make a difference. Diversity
VC has created a toolkit for founders
to address diversity and inclusion. So,
what are you doing?
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#fakenews about European tech? We put those
myths to rest.
Mythbusting
Myths Aplenty Around European Tech
2018 Mythbusting
11.1
11.2
Don't Bring Anecdotes
to a Data Fight
ARTICLES
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Those working within the European tech ecosystem regularly
encounter a large number of myths about what is happening
in the region
Biggest myth by SOET region
Source:
LEGEND
Lack of Ecosystem
Capital Availability
Global Competitiveness
Market Fragmentation
Slow Moving
Not Innovative
Talent Availability
Overly Regulated
Diversity
Startup Unfriendly
Note:
Based on respondents that gave explicit responses only
% of respondents
Baltics
DACH
France & Benelux
Nordics
Rest of Europe
Southern Europe
UK & Ireland
0
10
20
30
40
50
60
70
80
90
100
Founders and investors are aligned that the biggest myths are the lack of an ecosystem, the level of capital
availability and its global competitiveness
What, in your opinion, is the biggest myth you
regularly encounter about the state of the
European tech ecosystem?
Source:
LEGEND
Founder or startup/scale-up employee
Investor
Note:
Founder and investor respondents only. Based on respondents
that gave explicit responses only
% of respondents
15%
14%
14%
12%
11%
9%
9%
8%
5%
4%
18%
12%
17%
8%
4%
13%
Lack of Ecosystem
Global Competitiveness
Capital Availability
Market Fragmentation
Slow Moving
Talent Availability
Overly Regulated
Not Innovative
Diversity
Startup Unfriendly
0
3
5
8
10
13
15
18
20
Those working within the Europ an t
h ecosystem
regularly encount r a large num er of myths about
what is happening in the region
Founders and investors are aligned that the biggest
myths are the lack of an ecosystem, the level of
capital availability and its global competitiveness
Those working within the European tech ecosystem regularly
encounter a large number of myths about what is happening
in the region
Biggest myth by SOET region
Source:
LEGEND
Lack of Ecosystem
Capital Availability
Global Competitiveness
Market Fragmentation
Slow Moving
Not Innovative
Talent Availability
Overly Regulated
Diversity
St rtup Unfriendly
Note:
Based on respondents that gave explicit responses only
% of respondents
Baltics
DACH
France & Benelux
Nordics
Rest of Europe
Southern Europe
UK & Ireland
0
10
20
30
40
50
60
70
80
90
100
Founders and investors are aligned that the biggest myths are the lack of an ecosystem, the level of capital
availability and its global competitiveness
What, in your opinion, is the biggest myth you
regularly encounter about the state of the
European tech ecosystem?
Source:
LEGEND
Founder or startup/scale-up employee
Investor
Note:
Founder and investor respondents only. Based on respondents
that gave explicit responses only
% of respondents
15%
14%
14%
12%
11%
9%
9%
8%
5%
4%
18%
12%
17%
8%
4%
13%
Lack of Ecosystem
Global Competitiveness
Capital Availability
Market Fragmentation
Slow Moving
Talent Availability
Overly Regulated
Not Innovative
Dive sity
Startup Unfriendly
0
3
5
8
10
13
15
18
20
Myths Aplenty Around
European Tech
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Europe is irrelevant as its share of public tech
market cap versus the US and China is small
Busted: If you choose to look at all the data, then yes, the market cap of public
European tech companies make up just 8% compared to the market caps of US and
Chinese tech companies. However, given that most the US companies' market cap is
taken up by just five companies (Alphabet, Amazon, Apple, Facebook and Microsoft)
and most of them are over 20 years old, it is much better to look at the market caps
of those public tech companies founded after 2006 if you want to understand the
direction of future travel. Once you do that, then Europe begins to punch a lot harder.
Busted: If you choose to look at all the data, then yes, the market cap of public European tech companies make up
just 8% compared to the market caps of US and Chinese tech companies. However, given that most the US
companies' market cap is taken up by just ve companies (Alphabet, Amazon, Apple, Facebook and Microsoft) and
most of them are over 20 years old, it is much better to look at the market caps of those public tech companies
founded after 2006 if you want to understand the direction of future travel. Once you do that, then Europe begins
to punch a lot harder.
Share of total market cap of public Internet &
Software companies by region
LEGEND
All public tech companies
All public tech companies founded since 2006
Note:
Share of total public Internet & software market cap by region
and cohort. % distribution based on share of total value of US,
China and Europe. Total may not sum to 100% due to rounding.
23%
8%
68%
33%
21%
47%
China
Europe
US
0
20
40
60
% of total market capAll the best European founders want to
move to Silicon Valley
It's often said that European founders 'all want to move to the Valley'. This is not what the data shows. Only 6% of
European founders would choose to found and build their company in Silicon Valley if given the chance to start
over again.
If you were to start over, where would you
choose to found and build your company?
LEGEND
% of founders
Note:
Founder respondents only
% of respondents
63.9%
19.3%
6.2%
3.7%
3.6%
3.0%
I would stay where we are now
A different European city
Silicon Valley/Bay Area
Somewhere else (e.g. Asia)
Other (please specify)
A different US city (not Silicon Valley/Bay
Area)
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
The overwhelming majority of European founders do
not feel the allure of moving to Silicon Valley
S&P Global Market Intelligence
2018 Mythbusting
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European tech founders don't understand
how to use stock options
Busted: European tech companies have historically lagged behind those from the US in
their use of stock options as an effective tool to attract, incentivise and retain talent.
However, looking at Advanced-HR's latest employee ownership survey, there are signs that
the latest generation of companies from Europe are now properly rewarding their most
talented executives and employees. While there is likely sample bias because most founders
who participate in the survey are likely to a) understand the issue more and b) be better at
remunerating their employees, it is a positive sign. There is still work to do but thanks to
leading European VCs, such as Index Ventures and Balderton, more founders are starting to
take this issue seriously and the rest will hopefully follow suit. European governments need
to pay attention too and ensure the implementation of progressive policies around use of
stock options do not lag behind this evolved attitude among European founders. If you support
enabling more effective use of stock options to incentivize talent in Europe, we recommend
checking out the Not Optional initiative at www.notoptional.eu.
The average level of employee ownership by funding round
stage is broadly similar in Europe compared to the US
Employee ownership by funding round stage
in 50th percentile by region
LEGEND
Executives (Europe)
Executives (US)
Staff + Other (Europe)
Staff + Other (US)
Unissued (Europe)
Unissued (US)
Note:
This details equity held by executive-level employees, staff-
level employees and remaining unissued options. It excludes
Founder's Shares and equity allocations displayed as a
percentage of fully diluted shares. Equity not related to salary
nor incentives
% of ownershipEurope
Europe
Europe
Europe
US
US
US
US
Seed
Series A
Series B
Series C
0.0
5.0
10.0
15.0
20.0
GDPR has been a disaster for all concerned
Importantly, however, there is a very strong majority agreement across the board from all stakeholder types that
GDPR has been a good thing for European consumers. One might say, therefore, that any perceived negative
impact for companies is a justi able cost of scaling more ethically
GDPR has been a good thing for European
consumers
DATASET: ALL RESPONDENTS
LEGEND
Agree
Neither agree nor disagree
Disagree
All respondents
0
10
20
30
40
50
60
70
80
90
100
% of respondents
The European tech community actually takes a surprisingly positive view on
the impact of GDPR, especially in terms of whether it has been a good thing for
European consumers. There is a more nuanced perspective on whether it has had
a negative impact on their own companies, but if it is generally seen as positive for
consumers then it's possible to argue it is a necessary cost to scal thically.
Mythbusting
11.2
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We explore how some of last year's predictions played
out, and give our forecasts for European tech in 2019.
Predictions
What We Got Right and Wrong Last Year
Predictions for 2019
12.1
12.2
What's Coming Next
ARTICLES
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In last year's report, we made some predictions about
what 2018 would hold for European tech
Founders will come to see regulation as a source of
potential competitive advantage
2017 Prediction
We totally got this right!
Mark: 1/1
The 'move fast and break things'
mentality has never sat well with heavily
regulated markets. As founders realise
they can gain an advantage through
regulatory compliance, it will go from
being seen as a perceived handcuff
to being seen as a potential source of
competitive advantage. Think of Natural
Cycles, Kry or Babylon in the healthcare
market. They are all early examples
of companies that have embarked
upon - and come out on the other
side of - lengthy regulatory approval
processes to gain an advantage on their
competitors.
This trend came through hard and fast
in 2018 across numerous industries.
Financial services has long since
been an industry where venture-
backed companies, such as N26 and
Monzo, actively leveraged their fully
licensed banking status to strengthen
their market positions. In the digital
health space, messaging-centric
applications such as Forward Health
and Siilo have overcome barriers to
become powerful new services in their
local health systems in the UK and
Netherlands respectively. Perhaps the
strongest example of the change in
founder attitudes towards regulation,
however, has come in the emerging
micro-mobility market. European
micro-mobility startups such as VOI and
Tier have explicitly pointed to their pro-
regulation approach as a key source of
competitive advantage as they seek
to capture the hearts and minds of
European consumers and policymakers
and to steal a march on US players
entering the European markets.
It would be a bit cheeky of us not to look
back at them and see how we did...
So, er, how did we do?
What We Got Right and Wrong
Last Year
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What We Got Right and Wrong Last Year
12.1
A venture-backed European tech startup will exit for a $B+
to a traditional non-tech European giant
European founders will increase efforts to tap engineering
talent pools outside of traditional hubs
We...sort-of got this maybe half-right
Yeah, we nailed this one too
Mark: 0.5/1
Mark: 1/1
Non-tech European corporates have
already made billion-dollar tech
acquisitions (Anglo-Dutch Unilever
picked up Dollar Shave Club), but
acquisitions within Europe have
typically been in the hundreds of
millions (for example, BNP Paribas and
Compte Nickel). This will change in 2018
as European non-tech corporates put
some of their combined $1.5 trillion
cash holdings to work.
The battle for talent in Europe is
intensifying. Not only are there more
venture-backed startups that are better
funded and hungrier for engineering
talent than ever, but global tech giants
are also expanding aggressively in the
region with inflated salaries on offer for
the most talented. At the same time,
European corporates are fighting back,
ensuring talent flows are not a one-
way street into tech. In order to stay
competitive in this context, European
founders will look for creative ways to
best exploit the untapped engineering
talent pools in less obvious places.
For example, we expect to see more
satellite offices opening up across the
region in upcoming hubs.
In the purest sense, this did not come
to pass. There was no single acquisition
of a European VC-backed company
for more than $1 billion to a traditional
non-tech European giant. But that's
not to say that there was not plenty of
relevant M&A activity that validated
this trend. In fact, the year started in
January with Richemont's acquisition of
full control of the European, formerly-
VC-backed, but now public company
Yoox Net-a-Porter for an implied total
enterprise value of around $6 billion.
Siemens, the German industrial giant,
acquired Mendix, a Netherlands-
born, -funded and -raised enterprise
software company, for $730 million.
In other smaller, but still meaningful
transactions, ING Group acquired
Payvision for a fee that valued the
business at more than $500 million,
while Munich Re acquired Berlin's Relayr
for $300 million. All this taken together,
we think this deserves a half mark.
This trend has certainly taken hold in
Europe in 2018, driven by increasing
levels of competition for talent in core
European tech hubs and a growing
awareness of the depth of talent in
emerging hubs. According to the more
than 1,000 founders that responded
to this year's State of European Tech
Survey, more than 50% of companies
with more than 100 employees have
already opened satellite offices to
tap new talent pools and 80% of
those founders expressed increased
interested in opening additional
offices. As one example, N26 has
opened its first major office outside of
Berlin, choosing Barcelona to build an
office that will quickly expand to 100
employees.
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What We Got Right and Wrong Last Year
12.1
A top tier, established European VC will participate in
a token offering/ICO
Yeah...no, this didn't happen
Mark: 0/1
In 2017, top tier US funds (including
Andreessen Horowitz and Union Square
Ventures) actively invested directly
in tokens via Initial Coin Offerings.
They were joined by some of Europe's
newest funds, such as Blueyard. But the
region's most established funds have
yet to participate. This will change in
2018.
This did not happen, at least not
publicly. In 2018, making any sort of
prediction around the state of the
crypto market proved particularly
dangerous given the extreme level of
volatility in the market and an enduring
bear market. The price of crypto assets
has inevitably dominated the headlines
through the year, but under the surface
European teams have continued to
make progress and raise funds from
top tier European investors, often via
traditional equity. Argent, for example,
raised capital from Index Ventures and
Creandum.
So how did we do overall?
We think 2.5/4 isn't bad going...now
onto our predictions for next year...
Photo: Riku Kyla / Juuso Hmlinen
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First-time funds targeting underrepresented European
communities emerge
Founders choose to stay where they are and
build from home
The figures are damning. Only 7%
of all capital invested in European
tech companies in 2018 went to
female or mixed gender founding
teams. We cannot measure the
imbalance in funding allocated to
other underrepresented communities,
but those figures would only be
harder to read. It is even harder to
consider just how much talent and
value has evaporated away from our
industry because they are not being
funded today. We cannot shy away
from how difficult it will be to turn
this tide. Established VC firms have
a responsibility to look harder, and
face down their unconscious biases.
Dedicated funds targeting investment
into these communities are also part
of the answer. These numbers have to
change if we are to fulfil our potential.
2019 is the year that new funds will start
to make this happen.
According to the European Centre for
Policy Studies, tech talent in Europe
is 10x more likely to move than the
average citizen in Europe. This is
extraordinary and owes much to the
historic geographic opportunities
of European tech. Europe is set to
enter a third phase in the evolution of
entrepreneurial tech talent mobility.
If the first phase was defined by the
frequent flow of talented European
entrepreneurs moving to the US to build
their companies, and the second was
defined by entrepreneurs staying to
build from Europe but choosing one of
the region's major hubs (London, Berlin,
etc.); then we're entering a third phase
where founders choose to stay where
they are, emboldened by the quality of
the local ecosystems they see arising
around them all across Europe. The
more that founders and talent choose
to build from home, the more that 10x
difference will contract.
Investing in
Underrepresented Founders
Build
From Home
Predictions for 2019
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$500 million+ rounds become a thing
Softbank Vision Fund has mostly
set its eyes on the US, but it has also
been active in Europe, leading giant
$500 million+ rounds into Improbable
and Auto1. As Europe produces more
multibillion-dollar companies to go with
the 12 $5 billion+ companies that have
been founded in the past 15 years and
as more growth stage capital lines up to
capture the European tech opportunity,
we should expect $500 million+ rounds
to become more common.
European SaaS companies take the public stage
European founders and investors are
the first to admit that Europe started
behind the curve in SaaS. But Europe's
leading SaaS companies are making
up for lost time and scaling quickly.
We're looking at you, UIPath. We are not
going to predict who makes it out first,
but we do think 2019 will see the next
set of European SaaS IPOs to follow
in the footsteps of pioneers such as
Mimecast. It's about time too.
Semicorns?
EuroSaaS
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About
Our Data Partners
Our Contributors
Acknowledgements
About Atomico
About Slush
About Orrick
About Studio Lovelock
13.1
13.2
13.3
13.4
13.5
13.6
13.7
Who, How, What, Why
ARTICLES
152
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Advanced HR
Indeed
Politico Pro
Intelligence
CBRE
Invest Europe
Preqin
European Organization
for Nuclear Research
(CERN)
LinkedIn
Quid
Dealroom
London Stock
Exchange
Stack Overflow
European
Investment Fund
Meetup
Startup Heatmap
Europe
Our Data Partners
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Thanks to all of the following people for their
assistance and insight in developing this year's
State of European Tech Report
Giovanni Anelli
Sonali de Rycker
James Clark
Taavet Hinrikus
Christina Brinck
Ophelia Brown
Linda Griffin
Rosie Dallas
Alice Bentinck
Lisa Edgar
Michael Collins
Nenad Marovac
Tugce Bulut
Irina Haivas
Jacob de Geer
Elsa Bernadotte
Rasmus Ekholm
Simon Cook
CERN
Accel
London Stock
Exchange
TransferWise
Sixth Swedish National
Pension Fund
Blossom Capital
King
Fat Llama
EF
Top Tier Capital
Partners
Invest Europe
Invest Europe
Streetbees
Atomico
iZettle
Karma
Slush
Draper Esprit
Baroness Martha
Lane Fox
Doteveryone
Our Contributors
Pip Jamieson
The Dots
154
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Raj Mukherjee
Pierre Stadler
Check Warner
Naren Shaam
Caroline Walerud
Niklas Zennstrm
Jamie McFarlane
Pr-Jrgen Prson
Juan Urdiales
Sara Wimmercranz
/ Susanne Najafi
Sebastian
Siemiatkowski
Teddie Wardi
Dave Norwood
Sharmadean Reid
Steve O'Hear
Munish Varma
Chris Yiu
Natalie Massenet
Indeed
Pictet Alternative
Advisors
Diversity VC
GoEuro
Voumental
Atomico
Creator Fund
Northzone
Jobandtalent
Backingminds
Klarna
Insight Venture
Partners
Oxford Sciences
Innovation
Beautystack
TechCrunch
SoftBank Vision
Fund
Tony Blair Institute
for Global Change
Imaginary
Ventures
Our Contributors
13.2
Mate Rimac
Rimac Automobili
155
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We wouldn't have been able to put together the State
of European Tech without a lot of help - thanks to all
of the following in particular:
Mike Allanson
Studio Lovelock
Bryce Keane
Atomico
Declan McNamara,
Phd
LinkedIn
Jon Brewer
Orrick
Conrad Lee
Advanced HR
Rugiyya Gahramanli
London Stock
Exchange
Janne Korpela
Slush
Matt Collins
Studio Lovelock
Gligor Micajkov
Dealroom
Liz Chang
Meetup
Ilya Levtov
Craft
Thomas Koesters
European Startup
Initiative
Ciarn Boylan
Indeed
Jani Kurki
Slush
Sergei Filimonov
Craft
James Clark
London Stock
Exchange
Ben Jakob
Studio Lovelock
Ant Jumratsilpa
Studio Lovelock
Joe Lovelock
Studio Lovelock
Acknowledgements
Julie Kim
Quid
156
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Matt Muir
Karthik Suresh
Craft
Maeve Ryan
LinkedIn
Yoram Wijngaarde
Dealroom
Mohamed
Mohamed
Atomico
Eleanor Warnock
Atomico
Julia Silge
Stack Overflow
Chief Squirrel
Atomico
Cornelius Mueller
Invest Europe
Julien Puls
Dealroom
Tom Wehmeier
Atomico
Acknowledgements
13.4
Raj Mukherjee
Indeed
Marcus Nordberg
CERN
Anais Rassat
CERN
Joanna Nye
Preqin
Photo: Kai Kuusisto
Milltown Partners
157
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We're Atomico. You probably knew that already.
We're not a traditional venture capital
firm.
We are built by founders for founders.
Every single aspect of Atomico,
every part of our culture, and every
decision we take, is designed with the
sole ambition of helping our partners
succeed.
We exist for more than returns. We
believe entrepreneurs are the ultimate
agents of positive, transformational
change across every aspect of our
society and economy.
Our mission is to spur this progress
forward.
It's why we partner with the world's
most ambitious founders. The rule-
breakers who want to build the next
leader in their category. The world-
shapers creating companies that
fundamentally shift the way we live
today. The gamechangers using
technology to rewire the world in favour
of something better, for as many people
as possible.
When we find these people, we invest
much more than money. We work hand-
in-glove with them, drawing on hard-
won experience scaling some of the
most successful technology companies
in the world.
Want to work on this report with us
next year? We're looking for a Research
Associate. Drop Tom a line at tom@
atomico.com.
But who are we really?
About Atomico
Once again we've partnered with Slush to
produce the State of European Tech report
Slush is a global movement, supporting
the next generation of founders. It's
a not-for-profit event organized by a
community of entrepreneurs, investors,
students, and festival organizers.
In 2018, Slush gathered more than
45,000 people in 75 events all around
the world, from South Africa to Tokyo.
The Slush year culminates in Helsinki
in December, when 20,000 founders,
investors, media and executives from
130+ countries gather in Helsinki.
Held during the darkest time of the year,
Slush has always been characterized
by a unique energy and enthusiasm.
The very core of Slush is to facilitate
founder-investor meetings and to
build a worldwide startup community.
In 2018, more than 1800 investors and
3000 startup companies came to
Helsinki for the event.
Slush is run by a community of students
who want to radically change how
entrepreneurship is perceived in
Northern Europe and beyond. Several
successful entrepreneurs, from the
founders of Supercell and Spotify
among others, have already become a
part of the not-for-profit initiative that
has already become a movement of
global magnitude.
But what is Slush?
About Slush
158
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Studio who?
About Studio Lovelock
But who is Orrick?
Orrick counsels more than 1,800 tech
companies, as well as the most active
funds, corporate venture investors and
public tech companies worldwide. We
help you disrupt. We help you build. We
protect you. We help you win.
We are the No. 1 most active law firm
in European venture capital, No. 3
globally (PitchBook), top 10 for global
M&A (Bloomberg) and advisors to
seven of the top 15 global private equity
funds. We offer destination practices
in the areas that are important to tech
companies' success: privacy and
cybersecurity, intellectual property,
payments, and beyond.
And we innovate not only in our legal
advice but also in the way we deliver our
services. That's why Financial Times
named us the most innovative law firm
in North America in 2016 and 2017.
Creators. Visionaries.
Underdogs. The Daring.
About Orrick
Studio Lovelock is a branding and
communications design agency based
in London.
We are a collection of open-minded,
smart and creatively restless folk,
driven to help the businesses we
believe in achieve great things.
We are founded on the belief that
creativity and clear design thinking are
critical components in the long term
success of any business.
We pride ourselves on our willingness to
push beyond our comfort zone and the
quality of the relationships we've built
with our clients.
Being friendly, helpful and reliable
doesn't hurt either.
www.studiolovelock.com
Smart, open-minded
and creatively restless
In Partnership with
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Appendix
Survey Respondents
More About Our Data Partners
14.1
14.2
Notes, Etc.
ARTICLES
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Geographic origin of survey respondents
Source:
LE GE ND
% of respondents
Note:
Numbers may not add to 100 due to rounding.
% of respondents
35.0%
19.4%
12.3%
9.4%
9.1%
5.3%
4.3%
3.1%
2.1%
Nordics
UK & Ireland
DACH
Southern Europe
France & Benelux
Central Europe & Baltics
Eastern Europe
Rest of world
United States
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
Occupation of survey respondents
Source:
LE GE ND
% of respondents
Note:
Numbers may not add to 100 due to rounding.
% of respondents
27.9%
16.2%
16.2%
15.2%
6.9%
5.9%
4.8%
4.4%
2.0%
Founder
Investor
Company employee (non-tech)
Startup/scale-up employee
Company employee (public tech co)
Other
Student
Public sector / policymaker
Academic/researcher
0.0
5.0
10.0
15.0
20.0
25.0
30.0
Gender of respondents
Source:
LE GE ND
% of respondents
% of respondents
70.81%
27.37%
1.74%
0.08%
Male
Female
Prefer not to say
Other (specify)
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
Survey Respondents
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Advanced-HR
CBRE
CERN
Craft
Dealroom
Advanced-HR is the leading provider
of pre-IPO compensation data. We
partner with top-tier investors and
portfolio companies to produce
the world's largest compensation
database specific to private, venture-
backed companies. Advanced-HR's
VC Executive Compensation Survey
(VCECS) is for corporate use by
investors, management professionals,
and service providers. The VCECS
results are leveraged in the Option
Impact compensation database, an
ongoing survey where companies
maintain current information in the
system in exchange for full database
access at no cost. Advanced-HR is a
Solium company (Solium Capital Inc.)
(TSX: SUM). To learn more, please visit
www.advanced-hr.com.
CBRE Group, Inc. (NYSE:CBG), a
Fortune 500 and S&P 500 company
headquartered in Los Angeles, is
the world's largest commercial real
estate services and investment firm
(based on 2017 revenue). The company
has more than 80,000 employees
(excluding affiliates), and serves
real estate investors and occupiers
through approximately 450 offices
(excluding affiliates) worldwide. CBRE
offers a broad range of integrated
services, including facilities,
transaction and project management;
property management; investment
management; appraisal and valuation;
property leasing; strategic consulting;
property sales; mortgage services and
development services. Please visit our
website at www.cbre.com.
The European Organisation for Nuclear
Research (CERN) - is a world-renowned
centre for scientific research,
celebrated for its recent discovery of
the Higgs boson. CERN's technology
provides concrete business solutions
in many fields: from medtech to
aerospace, and industry 4.0, and are
already present in start-ups hosted in
CERN's network of Business Incubation
Centres. CERN is also part of the
ATTRACT initiative, a European call for
breakthrough ideas that will fund 170
innovative projects from 2019.
Craft is a machine-learning powered
data and analytics platform building
the "Source of Truth" on companies
and mapping the global economy. The
Company organizes financial, operating
and human capital data from thousands
of sources to provide comprehensive,
up-to-date sector and company
profiles, ranging from early-stage to
the largest companies in the world, with
analytics and tools such as signal alerts,
trends and benchmarking.
Dealroom is a global company
information database & research firm.
Its software, database and bespoke
research enable its clients to stay at
the forefront of innovation, discover
promising companies and identify
strategic opportunities. Among its
clients are world-leading strategy
consulting firms, investment banks,
multinationals, technology firms,
venture capital & buyout firms and
governments. For more information,
please visit: https://dealroom.co
More About Our Data Partners
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14.1
EIF
LinkedIn
European Startup Initiative
Indeed
Invest Europe
The European Investment Fund (EIF) is
part of the European Investment Bank
group. Its central mission is to support
Europe's micro, small and medium-
sized businesses (SMEs) by helping
them to access finance. EIF designs
and develops venture and growth
capital, guarantees and microfinance
instruments, which specifically target
this market segment. In this role, EIF
fosters EU objectives in support of
innovation, research and development,
entrepreneurship, growth, and
employment.
Founded in 2003, LinkedIn connects
the world's professionals to make
them more productive and successful.
With more than 590+ million members
worldwide, including executives from
every Fortune 500 company, LinkedIn
is the world's largest professional
network on the Internet. The company
has a diversified business model with
revenue coming from Talent Solutions,
Marketing Solutions, and Premium
Subscriptions products. Headquartered
in Silicon Valley, LinkedIn has offices
across the globe.
The European Startup initiative
behind the Heatmap is a non-profit
organization enabling founders and
tech talent to navigate European
startup hubs and support community
builders to connect their ecosystems.
http://www.startupheatmap.com
The Startup Heatmap Europe is
an annual survey among founders
and the greater tech community on
mobility and the attractiveness of
startup hubs. The 2018 survey was
collected between April and August
2018 and had 1,500 participants. After
cleaning and sampling the data, 984
complete datasets remained that
were weighted to adjust for regional
representativeness on country level.
Founders were 57.52% of respondents.
For long-term trends in founder
mobility, we used a combined dataset
of 3 years with 1,661 distinct founder
dataset
More people find jobs on Indeed than
anywhere else. Indeed is the #1 job
site in the world and allows jobseekers
to search millions of jobs on the web
or mobile in over 60 countries and
28 languages. More than 200 million
people each month search for jobs,
post CVs, and research companies on
Indeed, and Indeed is the #1 source
of external hires for thousands of
companies (sources: SilkRoad & iCIMS).
For more information, visit indeed.com.
Invest Europe is the association
representing Europe's private equity,
venture capital and infrastructure
sectors, as well as their investors.
Our members take a long-term
approach to investing in privately
held companies, from start-ups to
established firms. They inject not only
capital but dynamism, innovation and
expertise. This commitment helps
deliver strong and sustainable growth,
resulting in healthy returns for Europe's
leading pension funds and insurers, to
the benefit of the millions of European
citizens who depend on them.
Invest Europe aims to make a
constructive contribution to policy
affecting private capital investment
in Europe. We provide information
to the public on our members' role in
the economy. Our research provides
the most authoritative source of data
on trends and developments in our
industry.
Invest Europe is the guardian of the
industry's professional standards,
demanding accountability, good
governance and transparency from our
members.
Invest Europe is a non-profit
organisation with 21 employees in
Brussels, Belgium.
For more information visit www.
investeurope.
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14.1
Meetup
Politico
London Stock Exchange
Meetup is a global community platform
that connects people in real life. It
was founded with one simple idea:
use technology to get people off
technology. Our vision is to harness
technology to remove the barriers to
human connection and deliver real life
community. Meetup supports over 40
million members+, 320,000+ Meetup
groups and 12,000 Meetups per day
around the world. Meetup was acquired
by WeWork in 2017. The two companies
share a vision of the power of bringing
people together, and together
using technology to create new and
innovative ways of building community.
Follow us @Meetup on Twitter, @
Meetup on Instagram and Facebook, or
visit meetup.com to learn more.
POLITICO Europe, launched in April
2015, is a joint venture between
POLITICO LLC, a global nonpartisan
politics and policy news organization,
and Axel Springer, the leading digital
publisher in Europe.
With operations based in Brussels and
additional offices in London, Berlin,
Paris, Warsaw, and Frankfurt, POLITICO
Europe connects the dots between
European power centers. In June 2018,
an annual ComRes/Burson-Marsteller
survey ranked POLITICO Europe as
the #1 most influential publication on
European affairs, for the second year
running.
POLITICO's premium policy intelligence
service, POLITICO Pro, empowers
thousands of policy experts and
decision-makers from over 730
organizations in 28 countries, on key
industries from Technology, Financial
Services and Trade to Competition,
Data & Digitization, Mobility and more.
Subscribers include EU and national
government, corporations, trade
associations, consultancies, law firms,
and NGOs.
POLITICO Pro's newest offering, Pro
Intelligence, is an innovative platform
which fuses the power of technology
with the power of journalism, providing
professionals with an overview of
bills, legislation, voting behaviour and
attendance, tweets, activities, press
releases, transcripts and more, at the
touch of a button. Users can track
information on the EU Institutions and
national legislatures in the UK, France
and Germany. Pro Intelligence was used
by Atomico to research data on EU Tech
legislation for this report.
London Stock Exchange Group
(LSE.L) is a diversified international
exchange Group that sits at the heart
of the world's financial community.
The Group can trace its history back
to 1801. The Group operates a broad
range of international equity, bond
and derivatives markets, including
London Stock Exchange; Borsa Italiana;
MTS, Europe's leading fixed income
market; and the pan-European equities
platform, Turquoise. Through its
markets, the Group offers international
business, and investors, unrivalled
access to Europe's capital markets.
Post trade and risk management
services are a significant and growing
part of the Group's business operations.
LSEG operates CC&G, the Rome
headquartered CCP and Monte Titoli,
the significant European settlement
business, selected as a first wave T2S
participant. The Group is also a majority
owner of leading multi-asset global
CCP, LCH.
The Group offers its customers an
extensive range of real-time and
reference data products, including
Sedol, UnaVista and RNS. FTSE
calculates thousands of unique
indices that measure and benchmark
markets and asset classes in more
than 80 countries around the world.
London Stock Exchange Group is also a
leading developer of high performance
trading platforms and capital markets
software. In addition to the Group's own
markets, over 40 other organisations
and exchanges around the world use
the Group's MillenniumIT trading,
surveillance and post trade technology.
Headquartered in London, United
Kingdom with significant operations
in Italy, France, North America
and Sri Lanka, the Group employs
approximately 4,700 peopl
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14.1
www.thestateofeurop antech.com
Preqin
Quid
Stack Overflow
Preqin is the home of alternative
assets, providing indispensable data,
solutions and insights to support
alternative asset professionals at
every stage of the investment cycle.
Since 2003, we have been the most
trusted source of information on
alternative assets, spanning private
equity, venture capital, hedge funds,
real estate, infrastructure, private debt,
natural resources and secondaries.
Our products and services are relied
upon by more than 60,000 industry
participants in over 90 countries,
for a range of activities including
fundraising, investor relations, asset
allocation, fund manager selection
and business development. Preqin is
an independent business with over
400 staff based in New York, London,
Singapore, San Francisco, Hong Kong,
Guangzhou and Manila.
Quid is software that reads millions
of documents and offers immediate
insight by organizing that content
visually. We power human intuition
with machine intelligence, enabling
organizations to make decisions
that matter. The tool uses big-data
analytics, natural language processing
and network science to help surface
key insights, enabling our Fortune 1000
clients to quickly complete analyses
like competitive tracking, market
landscapes, brand narrative maps, and
intelligence briefings.
Founded in 2008, Stack Overflow is the
largest, most trusted online community
for developers to learn, share their
knowledge, and build their careers.
More than 50 million professional and
aspiring programmers visit Stack
Overflow each month to help solve
coding problems, develop new skills,
and find job opportunities. Stack
Overflow partners with businesses to
help them understand, hire, engage,
and enable the world's developers. Our
products and services are focused
on developer marketing, technical
recruiting, market research, and
knowledge sharing within organizations.
Photo: Jussi Helsten
Thanks for taking the time to read this
year's State of European Tech Report
This report wouldn't be possible without the many valuable
contributions from our data partners and the tireless work
by our survey distribution partners who help us reach tech
communities across the continent each year.
If you are interested in becoming a data or community partner
for next year's report please drop us an email on media@
atomico.com with the subject line 'SoET 2019' and we will get
back to you in due course.
We look forward to sharing the results with you next year of
what has become the most comprehensive data-driven study
of the European technology ecosystem available today.
Tom Wehmeier and the Atomico Team
In Partnership with
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