The UK continues to lead the European league table of unicorns – but one nation is catching.
GP Bullhound’s latest annual Titans of Tech report revealed that five new UK-based businesses achieved the coveted billion-dollar status: cybersecurity firm Snyk, FinTechs Checkout.com and Rapyd, HealthTech Babylon and dating group MagicLab.
Its analysis of the growth of Europe’s leading tech businesses revealed that there are now 30 unicorn companies headquartered on these shores, with a combined valuation of $87bn.
Leaping into second spot is Israel, which added 11 unicorns in the last 12 months to take its total to 20.
However these 20 companies are together worth only £48bn, whereas Germany’s 16 unicorns are valued at $71bn and Sweden’s 10 are worth $70bn.
The Netherlands’ four unicorns, including eCommerce trailblazer Adyen, are worth $54bn.
The number of billion-dollar companies has almost quadrupled since 2014. With 32 new billion-dollar companies with a combined value of $50bn added since last year, reaching a total of 112 companies and $416bn in value in 2020, the cohort is now worth almost five times the valuation in 2014.
Manish Madhvani, Managing Partner at GP Bullhound, commented: “2019 and 2020 year-to-date has been a pivotal period for tech as a whole, especially for the European ecosystem.
“The COVID-19 pandemic has magnified this. Without digital entertainment, online consumption and flexible workplaces, the feeling of isolation and the challenges under enforced lockdowns would have been more acute.
“The rates of tech adoption have been accelerated by five years and will leave the landscape ripe for more record innovation. This is a very exciting time for entrepreneurs founding new businesses, and scaling existing ones even faster.”
The list of countries creating their first unicorn is expanding. The Baltics delivered year-on-year, with Lithuania now on the map thanks to Vinted, and GP Bullhound expects Turkey to join next year with Zynga’s $1.8bn acquisition of Peak Gaming.
The sector’s composition continues to shift, with the sustained growth in the number of billion-dollar enterprise software and FinTech companies. Within the former, there is a concentration of new additions in the storage and cybersecurity subsectors. For consumer internet, marketplace models continue to dominate versus eCommerce.
European tech is now seen as a key hedge against some of the US ecosystem’s challenges. Europe has a broad and diverse supply of capital and investors remain confident, deploying large sums of money to the region’s leaders.
In 2019, late-stage funding increased by more than twofold for tech leaders, and the funding environment remains robust with 2020 year-to-date transactions double that of 2018 and in line with 2019.