Beruflich Dokumente
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The State of
European Tech 2018
Contents
00 2018 Key Findings 3
05 Tech Hubs 62
07 Regulation 90
10 Challenges 138
11 Mythbusting 141
12 Predictions 145
13 About 151
14 Appendix 159
KEY FINDINGS
04 The gains from Europe’s tech boom are not yet being
democratised
$ 23B
Record sums invested in Europe’s technology
ecosystem- $23bn in 2018 up from just $5bn in 2013.
4X $5B
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.
93%
93% of all funds raised by European VC-backed
companies went to all-male founding teams in 2018.
GENDER DISCRIMINATION
46%
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.
5X
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.
Eurostat
4%
The European tech workforce grew 4% in 2018 (source:
LinkedIn), a significant difference to overall EU employment
growth of 1.1%.
European Commission
45X
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.
HNW INVESTMENT
$ B5
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.
5.7M
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.
15
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.
61
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.
SUCCESS GROWTH
15X
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?
the renegade...er...
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,
data analysers! 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.
ARTICLES
It’s been another incredible year We write this report to shine a light that this report is a lot longer than in
for European tech - but there are on the issues that matter in the previous years. This was a deliberate
some significant challenges too European ecosystem. We aim to enrich decision. Our data is open, and our
conversations, highlight challenges, hope is as many people as possible will
and support more informed decision use it to help tell the stories that matter
making by closing the knowledge gap to them in Europe.
between perception and reality.
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.
Another record breaking This year we’re at risk of sounding like a $23 billion - up from $5 billion just five
broken record about breaking records years ago. European founders created
year for European tech - but we can’t dispute the data. In 17 billion-dollar companies. And in
another extraordinary year, investment 2018, Europe produced three of the ten
in European tech reached a record biggest venture backed public listings.
Technology has become At a macro-level, Europe’s technology faster than the rest of the European
sector is booming as the wider economy. This year’s report suggests
a motor for growth in the economy is stuck in the doldrums. that for a number of reasons, this
European economy As of Q3 2018, European growth was motor will only become more powerful.
flatlining at 0.2%, the lowest rate for The importance of the tech to the
four years. Europe’s software industry overall economy will only increase.
is now growing at least five times
European tech Last year we found that Europe was This all contributes to ‘density’ -
experiencing a ‘Battle Royale’ for talent. which historically has been a crucial
achieving density This year was the year Europe figured precondition for explosive growth.
out how to effectively mobilise its Europe is certainly achieving density,
deep pools of talent. The tech sector is but it’s doing it its own way. What is
attracting more participants - whether interesting is that the developer pool is
measured by the healthy increase in growing fastest outside those countries
professional developers or the uptick that have historically attracted the most
in talented executives moving into tech investment: Turkey, Spain and Russia’s
from other sectors. The report shows pool of developers have been deepening
dense areas of talent coalescing around the most rapidly. All this will lead to a
universities, anchor tech companies, massive potential upside for the wider
and innovation hubs, leading in turn European economy as capital eventually
to increases in investment, and flows into these new communities.
growth in anchor tech companies.
Europe is a research This year’s report also shows science and tech converge further,
that we are only scratching the there is huge scope to strengthen
powerhouse surface of the potential of Europe’s the link between European STEM
research community, and not fully and startups. Europe has a research
harnessing our own cutting-edge community larger than U.S. and China
science. An analysis by CERN, one - we need to make sure this becomes
of this community’s most influential the hugely powerful differentiator it
members, demonstrates that as should be.
Let Europe be Europe A word to the naysayers: irrespective horizon periods. We believe this is a
of the huge strides European tech has bellwether for a changing landscape.
taken in the last few years, our tech Let’s not forget that 95% of the value
sector will continue to be compared to creation of today’s US tech sector
the performance of Silicon Valley. is from companies founded 15 years
ago or more, and that the early tech
And as the ecosystem accelerates, successes of ARM, Amadeus and Ocado
we are increasingly cool with that! For were not venture-backed. Given that
a long time, US VC has outperformed 21 European companies have been
European VC in terms of portfolio founded and scaled to billion-dollar-
returns, but that is increasingly untrue. plus valuations with the support of
The latest historical performance data venture capital since 2010 alone, we are
shows that European venture has been confident that Europe has caught up on
outperforming US venture in recent North America’s head start.
A big diversity and This year’s report also unearths several way behind where it needs to be. This
figures which are extraordinary for stark reminder of our shortcomings is
inclusion problem all the wrong reasons. The State of timely, and it’s important that we draw
European Tech has always highlighted the right conclusions.
the challenges Europe faces, but this
year, we’ve identified a particularly Reporting this data is a first step in the
serious problem: 46% of women told us right direction. Only by measuring the
they have experienced discrimination problem can you start to solve it. To
in the European tech industry. As our take on this challenge, we’ve worked
chapter on diversity and inclusion with Diversity VC to launch an industry-
shows, this statistic is the tip of the first resource: a practical and hands-on
iceberg. While most investment figures guide for technology entrepreneurs
in this report spell good news, the fact that will help them build companies
that all-male founding teams received that have diversity and inclusion at
around 93% of the capital and 85% of their core. It’s not a complete solution,
the deals speaks for itself. Women and but we hope it’s a contribution that
minorities are underrepresented at founders will find useful nonetheless.
every level of the ecosystem. Corporate You can find the toolkit at
policy on diversity and inclusion is still www.inclusionintech.com
But we can still learn from As Europe catches up, it is vital that we Niklas Zennström founded a streaming
make the most of our second mover company called Kazaa. Kazaa was a
the successes and failures advantage - both in the companies we failure, but a group of Swedes led by
of others build, and in our approach to building Daniel Ek were paying close attention,
them. European tech has escaped most and learned important lessons.
of the backlash which has engulfed Learning from the mistakes of the
big US technology companies and previous generation led to the creation
characterised media coverage this of Spotify. Spotify has unequivocally
last year. For this to continue, we’ll proven that today, European founders
need to learn from past failures, and can raise the right capital, hire the best
act ethically from day one. European talent, go the full distance, stave off
technologists have already shown we ferocious competition and win on a
can learn from the lessons of the past global stage. Spotify will now become
in terms of business strategy. Before the spur and inspiration for other
he founded Skype, Atomico’s CEO European breakout successes.
Another broken record: This report has consistently highlighted offices and high net worth individuals
the need to close the institutional have spent the last five years investing
Bridge the funding gap, investor funding gap. Over the last five $5 billion in venture capital. If pension
democratise European years, pension funds have invested just funds can rebalance their allocations
tech’s success $1.7 billion in European VC, but have away from legacy industries towards
invested 45x more in European buyout gamechanging technology instead, they
funds, equivalent to more than $75B can democratise access to the spoils of
over that period. Meanwhile, family European tech.
An ecosystem irreversibly The European ecosystem has levelled the seeds of success this year were
up. Today, as Spotify has shown us, planted a decade ago. That is why we
changed European founders have access to should expect even greater success
sophisticated investors, can hire the in the years to come. As long as we all
best talent, go the full distance, stave continue to learn from both success
off ferocious competition, go public and failure, will European tech reach
and win on the global stage. Europe is the heights we know it to be absolutely
now reaping the early rewards from the capable of.
transformation of its tech ecosystem-
Thank you to all our partners I’d like to dedicate my final words to them this report would not have been
thank all of our data partners and most possible.
importantly, Slush and Orrick. Without
Tom Wehmeier
Partner, Atomico
Andreas Saari
CEO, Slush
Christopher Grew
Partner,
Technology
Companies Group
Orrick
ARTICLES
LEGEND 1.3%
EU employment YoY growth
1.1%
0.5
0.0
2016 2017 2018
Note:
Source: European Commission.
European Commission
4 %
powers the European tech industry. Europe’s tech worker population grew
4% in 2018.
LEGEND
YoY tech worker population growth (%) in 2018
Germany 4.0%
Note:
Based on an analysis of sample pool of LinkedIn members and
the difference between those in 2018 working in the Tech Source:
Sector in each country from this sample pool.
Finland 3.9%
YoY growth in the worker population of the
Top 20 largest tech workforces by country in Italy 3.5%
2018
Sweden 3.4%
DATASET : 1 1- 20
United Kingdom 3.3%
LEGEND
Denmark 3.3%
2018
Romania 3.1%
Netherlands 3.0%
Bulgaria 2.8%
Hungary 1.1%
Note:
Based on an analysis of sample pool of LinkedIn members and
the difference between those in 2018 working in the Tech Source:
Sector in each country from this sample pool and those in 2017.
Photo:Jussi Ratilainen
Tech: The Motor for GDP Growth
There is an ever-widening gap in the indexed growth rates of the tech (software) and non-
The implication of this sustained difference in growth rates is starkly visible when looking at indexed growth of the
tech parts of the European economy.
tech (software) Over the
and non-tech past
parts 15European
of the years, tech (software)
economy. Over thehas grown
past to tech (software) has grown to
15 years,
hit 194% of its relative value
hit 194% in 2002.
of its relative value in
Non-tech 146
150 141 141
136 136
133 133
130 128 129
124 125 126
121 123
125 118
112
107
100 100
100
75
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Note:
2016 is the most recent year for which full NACE breakdowns of Source: Eurostat
European GVA are available. Tech refers to the European
software industry, or NACE J62-63. Non-tech is everything Eurostat
else.
5x
Latest figures show Europe’s
software industry Gross Value Added
is growing 5x faster than the rest of
the European economy
Eurostat
While the long-term historical trend in relative growth rates has been impressive, more
While the long-term historical trend in relative growth rates has been impressive, more recently the speed of
recently the speedgrowth
of growth between
between tech
tech and and non-tech
non-tech has divergedhas diverged
even even further.
further. Today, Today,
the European tech (software) industry is now
the European techgrowing
(software) industry is now growing 5x
5x faster than the rest of the economy faster than the rest of the economy
LEGEND
YoY growth (%)
1.0
0.6%
0.0
Tech* Non-tech
Note:
*Tech refers to the European software industry, or NACE J62- Source: Eurostat
63 Eurostat
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
Over the last 10 years, many of these traditional industries upon which the European economy is so dependent
rate of growth in European
have eitherGross Value
stagnated or Added
declined, undermining the overall rate of growth in European Gross Value Added
146
Chain linked volumes of tech and selected 142
traditional industries GVA (indexed 2007-
140
2016)
123
L EG END 117 118 118
120
Tech 112 111
110 109 110
107
Real estate activities 103 103 103 103 103
102
100 100
Wholesale and retail trade, transport, accommodation 98
100 94 95 94 95
and food service activities
89 90 89 90
88 87
Industry 85 85
83
Financial and insurance activities
80
Construction
Telecommunications
60
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Note:
2016 is the most recent year for which full NACE breakdowns of Source: Eurostat
European GVA are available. Tech refers to the European Eurostat
software industry, or NACE J62-63.
21%
Share of total gross value added in Europe Industry (except construction)
19%
Wholesale and retail trade, transport,
19%
L E G E ND accomodation and food service
activities
% of total GVA (2002)
Public administration, defence, educa…
% of total GVA (2016) 19%
Tech
3%
2%
Agriculture, forestry and fishing
2%
Telecommunications
1%
Publishing, motion picture, video, tele…
1%
Publishing activities
1%
Motion picture, video, television progr…
0 5 10 15 20
% of total gross value added
Note:
Europe is based on EU-28. 2016 is the most recent year for Source: Eurostat
which full NACE breakdowns of European GVA are available. Eurostat
Tech refers to the European software industry, or NACE J62-63
The European tech (software) industry contributes around $400 billion to the
European economy today, though it remains just a fraction of total European
The European tech (software) industry contributes around $400 billion to the European economy today, though it
Gross Value Added,remains
accounting for justof2.5%
just a fraction of total European
total European Gross ValueGVA
Added, accounting for just 2.5% of total European GVA
$300.0B
300.0
L EGEND
Gross Value Added ($B)
$2.1B
$264.0B $263.0B 2.2 Tech as % of total GVA
Tech
$234.0B $2.0B
Tech as % of total GVA $208.0B
200.0 $194.0B $1.9B
$1.9B 2.0
$1.8B
$1.8B
$1.8B
100.0
1.8
0.0 1.6
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Note:
2016 is the most recent year for which full NACE breakdowns of Source: Eurostat
European GVA are available. Tech refers to the European Eurostat
software industry, or NACE J62-63
2.5 %
Gross Value Added 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
Eurostat
Energy $1,270B
Total market cap of European public
companies in S&P Global 1,200 by industry Financial Services $1,231B
group ($B)
Bio & pharma $1,150B
CPG $777B
Retail $734B
Industry $648B
Insurance $608B
Mobility $523B
Note:
Based on an analysis of the industry breakdown by market cap, S&P Global Market
Source:
revenue, market cap/revenue multiple and age of the 328 Intelligence
constituents of the S&P Global 1,200 Index from Europe. Data
as of October 2018. S&P Global Market Intelligence
Those same 300 or so European companies control more than $6.9 trillion in annual
Those same 300 or so European companies control more than $6.9 trillion in annual revenue and represent a giant
revenue and represent a giant
potential potential
opportunity opportunity
for any for companies
European tech any European techtocompanies
that seek take on those incumbent giants in their
that seek to take on those incumbent
traditional industries. giants in their traditional industries
Energy $1,642B
Total revenue of European public companies
in S&P Global 1,200 by industry group ($B) Mobility $1,012B
Materials $906B
LEGEND
Total revenue ($B) Insurance $843B
CPG $589B
Industry $375B
Retail $269B
Note:
Based on an analysis of the industry breakdown by market cap, S&P Global Market
Source:
revenue, market cap/revenue multiple and age of the 328 S&P Global Market Intelligence
Intelligence
constituents of the S&P Global 1,200 Index from Europe. Data
as of October 2018.
102
demonstrated remarkable endurance until now 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?
Insurance 155
Median age in years of European public
companies in S&P Global 1,200 by industry Financial Services 154
group
Industry 4.0 135
Materials 113
Mobility 102
Biology 2.0 92
Retail 66
Energy 62
Note:
Based on an analysis of the industry breakdown by market cap, S&P Global Market
Source: S&P Global Market Intelligence
revenue, market cap/revenue multiple and age of the 328 Intelligence
constituents of the S&P Global 1,200 Index from Europe. Data
as of October 2018.
Are you more or less optimistic about the Central Europe & Baltics
future of European technology today than
you were 12 months ago? DACH
More
France & Benelux
About the same
Less
Nordics
Southern Europe
UK & Ireland
0 20 40 60 80 100
% of respondents
Source:
90
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.
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.
“ 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
Munish Varma companies to scale rapidly while still prioritising innovation.”
SoftBank Vision Fund
The factors that are driving optimism around the future of European tech are many and
The factors that are driving optimism around the future of European tech are many and varied. But when asked to
varied. But when asked to state
state the the mostgrounds
most important important grounds to
to be optimistic, be optimistic,
respondents gave arespondents
clear number one reason: the people that
gave a clear number oneupreason:
make the tech the people that make up the tech ecosystem
ecosystem
Capital Availability 9%
Tech Innovation 7%
0 5 10 15 20 25 30
% of respondents
Note: Source:
Based on respondents that gave explicit responses only.
“ 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.”
Rosie Dallas
Fat Llama
There is strong agreement across all survey respondents, including within the public
There is strong agreement across all stakeholders, including within the public sector, that European tech
sector, that European tech entrepreneurs will have a bigger impact than European
entrepreneurs are changemakers for a better world and that they will have a bigger impact on helping to important
governments
global when
problems than it comes
Europe's to solving important global challenges.
governments.
LEGEND
Agree Investor
Neither agree nor disagree
Disagree
Other
0 20 40 60 80 100
% of respondents
Source:
Round
Area of Focus City Country Selected Investors
Date
Selected early-stage European tech
companies with a strong focus on solving a Cambridge Glycoscience Biology 2.0 Cambridge UK 3Q18 Y Combinator
major global or societal challenge that have Cytera CellWorks Biology 2.0 London UK 3Q18 Y Combinator
raised in the past year from top investors
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
Carbo Culture Future of Energy Helsinki Finland 1Q18 Wave Ventures, Lifeline Ventures, Starlight Ventures
Sixfold Bios cience Biology 2.0 London UK 1Q18 Y Combinator, LombardStreet.io Ventures
Fat Lama Future of Retail London UK 4Q17 Blossom Capital, Greylock Partners, Atomico, Y Combinator
Sweden
Hygglo Future of Retail Stockholm 4Q17 Norrsken Foundation, Schibsted Growth
(SWE)
LabGenius Biology 2.0 London UK 4Q17 Acequia Capital, Kindred Capital, System.One
Source:
64 %
for a better world % of public sector and policymaker
respondents who agree that European
technology entrepreneurs will do more to
address major societal challenges than
European governments
% of respondents
LEGEND
Female, Agree 50
Male, Agree
Female, Neither agree nor disagree
Male, Neither agree nor disagree 25
Female, Disagree
Male, Disagree
0
Female Male Female Male Female Male
Source:
The social impact of a company plays an important SOCIAL & ETHICAL IMPACT OF INVESTMENT
role in how VCs invest, especially female VCs
ARTICLES
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
No single question in the survey received a stronger level of agreement than this one. When asked if having a
respondents agree. If theteam
diverse European
is a benetech
t toecosystem wants to almost
company performance, achieve itsoffull
90% potential,agree.
respondents thenIf the European tech
diversity and inclusion has to
ecosystem be attoits
wants core.its full potential, then diversity and inclusion has to be at its core.
achieve
Female
LEGEND
Agree
Neither agree nor disagree
Disagree
Male
0 10 20 30 40 50 60 70 80 90 100
% of respondents
Source:
The European tech community is dominated by men. Women account for just 22% of
The European
participants in tech-related tech community
Meetup events inisthe
dominated
region.by men. Women
Notably, account for
the industry isjust 22%to
failing of participants in tech-related
Meetup events in the region. Notably, the industry is failing to make any meaningful progress, having seen an
make any meaningful progress, having seen an increase of just a single percentage point in
increase of just a single percentage point in the level of female participation at European tech community events
the level of female in
participation at European tech community events in the past two years.
the past two years.
25
Share of female attendees in tech-related
22%
Meetup events in Europe 21% 21%
20
LEG END
Total in Europe (%)
% of female attendees
15
10
0
2016 2017 2018
Note: Source:
% of the reported gender of attendees only.
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
Women are not equally present in tech communities in any
number one country, Albania, only reaches 33%.
European country
Albania 33%
Share of female attendees in tech-related
Meetup events by country Lithuania 28%
Serbia 26%
Ukraine 25%
Portugal 25%
Sweden 25%
0 5 10 15 20 25 30 35
% of female attendees
Note:
% of the reported gender of attendees only. Only countries
with 100+ reported female attendees included.
Source:
0 20 40 60 80 100
% of Executives
Note:
Based on a sample of executives in CxO positions at 270
European VC-backed tech companies that raised a Series A or Source:
B round between 1 October 2017 and 30 September 2018.
LEGEND 6% 6% 6%
2017
5%
2018
2%
1%
Note:
Based on a sample of Founders and executives in CxO
positions at 270 European VC-backed tech companies that Source:
raised a Series A or B round between 1 October 2017 and 30
September 2018. 2017 data is based on a similar sample.
The European tech industry's lack of diversity could not be more stark when it comes to how funding is allocated in
The European techTheindustry’s
European lack of diversity could not be morenotstark when it
the region. It istech industry's
arresting to seelack ofmale
that diversity could
founders and be more
founding stark
teamswhen it comes
receive 95% oftothe
how funding
capital is allocated
invested and in
comes to how funding
the is allocated
region. It is in the
arresting region.
to see It
that is
malearresting
founders to
and see that
founding all-male
teams
account for 90% of deals,. It is even more stark to see that the these shares receive
have95%
notof the capital
changed invested
in the last yearand
founding teams receive
account93% of the
for 90% capital
of deals,. invested
It is even moreand account
stark for the
to see that 85% of deals.
these shares have not changed in the last year
It is even more stark to see that these shares have not changed in the last years.
Capital Raised
Capital raised and # of deals by founding Capital Raised
DATASET: CAPITAL RAISED
100
Capital
team raised(%)
gender and # of deals by founding 100 92%
95% 94% 93% 93% 93%
95% 94%
team gender (%) 92% 93% 93% 93%
(%) (%)
LE GEND
of deals
75
LE GEND
/ #deals
Male 75
Male
Female
/ # of
(%) (%)
Female 50
Mixed
raised
50
Mixed
raised
Capital
25
The European tech industry's lack of diversity25could not be more stark when it comes to how funding is allocated in
Capital
0
2013 2014 2015 2016 2017 2018
Source:
Source:
DATASET:
# of deals # OF DEALS
75
Capital raised (%) / # of deals (%)
50
25
9% 9% 9% 9% 10% 10%
5% 5% 5% 6% 5% 5%
0
2013 2014 2015 2016 2017 2018
Source:
LEGEND 11.8%
Exits (IPOs & M&A)
European news sources
11.5%
US news sources
11.9%
Blockchain
8.1%
19.9%
Artificial Intelligence
16.7%
10.6%
Diversity & Inclusion
7.4%
Note:
Based on ~3,000 stories across 843 European news sources
(primarily UK focused) and ~2,700 stories across 1,103 US news Source:
sources from Septemeber 2017 to September 2018.
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%%
The narrative
Interestingly, the reporting wearound
do seediversity and inclusion
on diversity is driven by
and inclusion inUS techincompanies,
tech Europeanleaving
newsa huge vacuum in terms of
European voices stepping up into the discussion. In the absence of European voices taking part in the discussion,
sources is driven by US tech companies. There’s a huge vacuum of European voices
does this leave an opportunity for leadership from European tech companies to help drive the discussion in a
stepping into the discussion.
positive way?We all have a responsibility to do and say much more.
Google 157
Top 10 most discussed companies in
European news stories focused on diversity Facebook 88
and inclusion in the tech industry
Twitter 45
LEGEND Microsoft 37
# of mentions Apple 35
Salesforce 30
PwC 24
IBM 23
McKinsey 21
Amazon 20
Note:
Based on ~3,000 stories across 843 European news sources,
primarily UK focused, from September 2017 to September Source:
2018.
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
Compared to other tech-related topics that gain large amounts of coverage in European news sources, it is notable
be led by a negativethat
sentiment.
articles related to diversity and inclusion are more likely to be led by a negative sentiment.
Artificial Intelligence
0 20 40 60 80 100
% of total stories
Note:
Based on ~3,000 stories across 843 European news sources
(primarily UK focused) from Septemeber 2017 to September Source:
2018.
Many stories on diversity and inclusion have a negative sentiment and they are more likely
to drive more engagement on social media. In fact, news articles related to diversity and
inclusion that are classified
Many storieswith a negative
on diversity sentiment
and inclusion havedrive 42%sentiment
a negative of all social
andengagement
they are more likely to drive more
around the topic asengagement
a whole, despite
on socialthose
media.same
In fact,stories accounting
news articles fordiversity
related to just 11% ofinclusion
and everything
that are classi ed with a
negative
written on the topic. Are wesentiment
sendingdrive 42% of
enough all socialmessages
positive engagementto around the topic as a whole, despite those same stories
underrepresented
communities to joinaccounting
the techfor just 11% of
industry, oreverything
are we inwritten
danger onof
thefurther
topic. Are we sendingthe
reinforcing enough positive messages to
deeply
underrepresented communities to join the tech industry, or are we in danger of further reinforcing the deeply
entrenched stereotypes that have made tech so unwelcoming to these groups?
entrenched stereotypes that have made tech so unwelcoming to these groups?
Artificial Intelligence
0 20 40 60 80 100
% of total sentiment
Note:
Based on ~3,000 stories across 843 European news sources
(primarily UK focused) from Septemeber 2017 to September Source:
2018.
Despite many voices in the industry taking a negative view on the level of inclusion in
Despite many voices in the industry taking a negative view on the level of inclusion in Europe's tech industry,
Europe’s tech industry, people are much more likely to believe that the culture in their own
people are much more likely to believe that the culture in their own companies is inclusive. In fact, more than three
companies is inclusive. In of
quarters fact, moreorthan
founders three-quarters
employees of founders
at Europe's private or employees
tech companies perceiveattheir company's culture to be
Europe’s private tech companies perceive their company’s culture to be inclusive.
inclusive.
Other
0 20 40 60 80 100
% of respondents
Source:
DATASET: GENDER
Gender
Female
Male
0 20 40 60 80 100
d % of respon ents
Source:
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
People
on the other hand, whoinare thearguably
European able
tech ecosystem are split inview
to take a broader theirgiven
views on
thewhether
number it is
ofinclusive. 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
companies they meet, are much less positive, with 45% disagreeing that the industry is
broader view given the number of companies they meet, are much less positive with 45% disgreeing that the
inclusive versusindustry
36% that agree.
is inclusive versus 36% that agree.
LE GE ND Female
Agree
Neither agree nor disagree
Male
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
0
on the 20
other hand,
40
who are60arguably80able to take
% of respondents
100
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.
DATASET: FOUNDER/INVESTOR
Source:
LEG END
People
Agree in the European tech ecosystem are split in their views on whether it is inclusive. While a majority of men
Female investor
think it isagree
Neither inclusive,
nor disagreeonly 38% of women agree. Female investors on the other hand, who are arguably able to take a
broader
Disagreeview given the number of companies they meet, are much less positive with 45% disgreeing that the
L EGE ND
0 20 40 60 80 100
Agree
% of respondents
Neither agree nor disagree
Disagree
DATASET: EXPERIENCED DISCRIMINATION
Source:
Experienced discrimination
0 20 40 60 80 100
% of respondents
Source:
32%
Have you ever experienced discrimination Central Europe & Baltics
10%
while working in the European tech industry?
62%
DACH
22%
LEGEND
35%
Female Eastern Europe
26%
Male 49%
France & Benelux
12%
39%
Nordics
18%
42%
Southern Europe
14%
50%
UK & Ireland
15%
0 10 20 30 40 50 60 70
% of respondents
Source:
Women are experiencing an alarming level of DISCRIMINATION IN THE EUROPEAN TECH INDUSTRY
discrimination in the European tech industry
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 Discrimination based on
of respondents gender
have might be thediscrimination
experienced most visible andbased
quanti on
able,
agebutand
it is from the only form of
discrimination that exists at worrying levels in the European tech ecosystem. Meaningful numbers of respondents
ethnicity too. The survey can’t accurately quantify the level of discrimination based on
have experienced discrimination based on age and ethnicity too. The survey can't accurately quantify the level of
disability or sexualdiscrimination
orientation, based
but theon data points
disability to these
of sexual being very
orientation, prevalent
but the here
data points too. being very prevalent here too.
to these
40%
Types of discrimination experienced by Age
39%
people who have experienced any form of it
when working in European tech 90%
Gender
32%
LEGE ND
6%
Sexual orientation
Female 12%
Male
11%
Ethnicity
32%
1%
Disability
5%
3%
Religion
11%
0 20 40 60 80 100
Source:
% of respondents that have experienced each form of discrimination
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.
Other 39%
White 22%
0 10 20 30 40 50 60
% of respondents who have experienced discrimination
Note:
The sample size for all ethnicities is not large, but this fact Source:
itself tells a story of its own.
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,
In the wake of high pro le stories of discrimination in the tech industry, the issue of diversity and inclusion has
this changed how many now behave. 45% of women and 36% of men agree that
seen an increased focus. This has, according to respondents, changed how many now behave. 45% of women and
they’ve made changes to their
36% of men behaviour
agree in the
that they've last
made 12 months.
changes to their behaviour in the last 12 months.
LEGEND Female
Agree
Neither agree nor disagree
Disagree
Male
0 10 20 30 40 50 60 70 80 90 100
% of respondents
Source:
Sebastian Siemiatkowski
Klarna
One way to explore the extent to which the European tech industry is tackling diversity and
inclusion is by examining
One waythe level of
to explore theadoption of different
extent to which policies
the European techthat can ishelp
industry to enable
tackling a and inclusion is by
diversity
One way to the
examining explore
levelthe extent toof
ofculture.
adoption which the European
different techcan
policies that industry
help toishas
tackling
enable diversity
a more and and
diverse inclusion is bycompany
inclusive
more diverse and inclusive company Flexible working, for example, a high level
examining
culture. the level
Flexible of adoption
working, for of different
example, has apolicies
high that
level of can help to
adoption enableEuropean
among a more diverse
tech and inclusive company
companies.
of adoption amongculture.
European tech
Flexible companies.
working, for example, has a high level of adoption among European tech companies.
Yes
No 0 10 20 30 40 50 60 70 80 90 100
OneNoway to explore the extent to which the European 0 tech10 industry
20 is30 tackling
40 % ofdiversity 60 and70
respondents
50 inclusion
80 is90by 100
examining the level of adoption of different policies that can help to enable a% ofmore diverse and inclusive company
respondents
culture. Flexible working, for example, has a high level of adoption among European tech companies.
Source:
Note:
DATASET: INDUSTRY
Source:
Company size only includes founder and startup/scale-up
Note:
My company
size onlyhas
employees.
Company a exible
includes working
founder and policy
startup/scale-up
employees. Tech
DATASET: INDUSTRY 92% 8%
LEGEND
Yes
Non-tech 90%
No 10%
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 policies0that can
10
help
20
to enable
30 40
a more 50
diverse
60
and
70
inclusive
80
company
90 100
culture. Flexible working, for example, has a high level of adoption among European
% of respondentstech companies.
L E GE ND
<=10 94% 6%
Yes
No
Note:
Company size only includes founder and startup/scale-up 11-100 92% 8%
employees.
0 10 20 30 40 50 60 70 80 90 100
% of respondents
Note:
Note:
Company size only includes founder and startup/scale-up
Company size only includes founder and startup/scale-up Source:
employees.
employees.
Similarly, founders and employees of Europe’s private tech startups and scale-ups report
high levels of adoption of dedicated
Similarly, parental
founders and employees leave policies,
of Europe's though
private techthere is a
startups marked
and scaleups report high levels of adoption of
difference based on company size. In fact, nearly 40% of companies that are still
dedicated parental leave policies, though there is a marked difference based fewer
on company size. In fact, nearly 40%
than 10 employeesofhave yet to that
companies put in
areplace a parental
still fewer leave policy
than 10 employees have yet to put in place a parental leave policy
of companies that are still fewer than 10 employees have yet to put in place a%parental
of respondentsleave policy
DATASET: INDUSTRY
My company has a parental leave policy
DATAS E T : I ND U ST RY
Tech 74% 26%
L E GE ND
Yes
Non-tech 87% 13%
Similarly,
No
Note: founders and employees of Europe's private tech startups and scaleups report high levels of adoption of
dedicated
employees. parental leave policies, though there is a marked difference based on company size. In fact, nearly 40%
Company size only includes founder and startup/scale-up
of companies that are still fewer than 10 employees 0have yet 10 to20put in30place40a parental
50 leave70policy80
60 90 100
% of respondents
Yes
No 11-100 75% 25%
Note:
Company size only includes founder and startup/scale-up 100+ 88% 12%
employees.
Note: 0 10 20 30 40 50 60 70 80 90 100
Company size only includes founder and startup/scale-up
employees. % of respondents
Flexible working and parental leave policies are important steps towards enabling a
more diverse workforce,
Similarly,but may not
founders and be sufficient
employees on their
of Europe's own.tech
private Interestingly,
startups andascaleups
large report high levels of adoption of
percentage of companies,
dedicated especially smaller
parental leave policies,ones,
thoughhave
therenot
is ayet implemented
marked an overall
difference based on company size. In fact, nearly 40%
diversity and inclusion policy. that are still fewer than 10 employees have yet to put in place a parental leave policy
of companies
of companies that are still fewer than 10 employees have yet to put in place a%parental
of respondents leave policy
DATASET: INDUSTRY
My company has a parental leave policy
DATASE T : I ND U ST RY
Tech 48% 52%
L EG END
Yes
Non-tech 62% 38%
Similarly,
No
Note: founders and employees of Europe's private tech startups and scaleups report high levels of adoption of
Company size only includes founder and startup/scale-up
dedicated
employees. 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 0have yet 10 to20put in30place40a parental
50 leave
60 policy80
70 90 100
% of respondents
Yes
No 11-100 42% 58%
Note:
Company size only includes founder and startup/scale-up 100+ 58% 42%
employees.
Note:
Company size only includes founder and startup/scale-up 0 10 20 30 40 50 60 70 80 90 100
employees.
% of respondents
DATASET: INDUSTRY
My company has a parental leave policy
DATAS E T : I ND UST RY
Tech 43% 57%
L E GE ND
Yes
Non-tech 51% 49%
No
Similarly,
Note: 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%
Company size only includes founder and startup/scale-up
employees.
of companies that are still fewer than 10 employees0have yet 10 to20put in30place40 a parental
50 leave70policy80
60 90 100
% of respondents
Yes
No 11-100 38% 62%
Note:
Company size only includes founder and startup/scale-up 100+ 52% 48%
employees.
Note:
0 10 20 30 40 50 60 70 80 90 100
Company size only includes founder and startup/scale-up
employees. % of respondents
Similarly, founders and employees of Europe's private tech startups and scaleups report high levels of adoption of
The fact that suchdedicated
policies parental
remain leave
far from widespread
policies, in the
though there European
is a marked tech industries
difference may besize. In fact, nearly 40%
based on company
compounded by the of fact that few
companies that companies
are still fewerhave appointed
than 10 employeesdedicated D&Iinrepresentatives.
have yet to put place a parental leave policy
DATASET: INDUSTRY
My company has a parental leave policy
DATAS E T: INDU STRY
Tech 32% 68%
L EG E ND
Yes
Non-tech 44% 56%
No
Similarly,
Note: founders and employees of Europe's private tech startups and scaleups report high levels of adoption of
dedicated parental
Company size only
employees.
leave
includes founder policies, though there is a marked difference based on company size. In fact, nearly 40%
and startup/scale-up
of companies that are still fewer than 10 employees 0have yet 10 to20put in30place40a parental
50 leave
60 policy80
70 90 100
% of respondents
Yes
No 11-100 24% 76%
Note:
Company size only includes founder and startup/scale-up 100+ 36% 64%
employees.
Note:
Company size only includes founder and startup/scale-up 0 10 20 30 40 50 60 70 80 90 100
employees.
% of respondents
Angel Academe Angel group Angel group focused on female founders & angels http://www.angelacademe.com/
Astia Angels Angel group Angel group focused on female founders & angels http://astia.org/astia-angels/
Rare Seed Capital Angel group Angel group focused o n BAME invetsors https://www.rareseedcapital.com/
23 Code Street Coding school Teaching women in the UK and India http://www.23codestreet.com/
People of Color in Tech Community Community for entrepreneurial people of colour https://peopleofcolorintech.com/
Inclusive Boards Company Helping recruit more ethnically diverse boards http://www.inclusiveboards.co.uk/
Success Talks Event series Platform and event series showcasing diverse speakers http://www.success-talks.co.uk/
Muslamic Makers Meet-up group Meet-up group for Muslims in Tech https://muslamicmakers.com/
50/50 Pledge Network A pledge for events and conferences to be 50:50 represented http://www.5050ple dge.com/
Non-pro t teaching women how to code and helping them get work
Code First: Girls Non-pro t https://www.code rstgirls.org.uk/
in tech companies
Level 20 Non-pro t Focused mainly on women in the Private Equity and LP community https://www.level20.org/
Note:
This list is illustrative and not exhaustive. If you would like to
Source:
add your initiatives to this list, please contact us at
research@atomico.com and we will update the list.
ARTICLES
TheThe
next generation
next of European
generation of Europeantech companies
tech from
companies hubs
from across
hubs the the
across region are being
built by experienced
region techby
are being built talent from previous
experienced generations
tech talent from previous generations
LEGEND
upto 1,000,000
LEGEND
800,000 to 900,000
upto 850,400
700,000 to 800,000
680,320 to 765,360
595,280 to 680,320
600,000 to 700,000
510,240 to 595,280
500,000 to 600,000
425,200 to 510,240
400,000 to 500,000
340,160 to 425,200
255,120 to 340,160
300,000 to 400,000
170,080 to 255,120
200,000 to 300,000
85,040 to 170,080
100,000 to 200,000
upto 85,040
upto 100,000
Source:
5.7m
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.
Germany, Europe’s largest country by population, is also home to the region’s largest
Germany, Europe's
single market for professional largest
developer country
talent, by population,
followed is alsobyhome
very closely to the
the UK andregion's largest single market for profession
Germany, Europe's largest country by population, is also home to the region's largest single market for professional
developer
then France in a more distanttalent, followed very closely by the UK and then France in a more distant third place
third place
developer talent, followed very closely by the UK and then France in a more distant third place
851,000
Germany
# of professional developers 851,000
Germany
# of professionalby
developers
country (2018 and 2017) United Kingdom 830,500
by country (2018 and 2017) United Kingdom 830,500
TO P 10 491,800
France
TOP 10 491,800
France 407,100
LE GE ND Russia
LE GEND 407,100
2018 Russia 308,900
Italy
2018 2017 308,900
Italy 308,500
Spain
2017
308,500
Spain
Netherlands
310,000
Netherlands
Note: Poland 310,000
254,500
Where data for 2017 was not available,
Note: this is shown as blank Poland Ukraine 254,500 172,000
Where data for 2017 was not available,
this is shown as blank Ukraine Sweden 172,000
176,000
Sweden 0176,000
100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000
Note: # of professional developers
Where data for 2017 was not available, this is 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000
shown as blank # of professional developers
Source:
Source:
Source:
Source:
Germany’s largest hubs for professional developers PROFESSIONAL DEVELOPER TALENT POOL
might surprise you
165,900
professional developers in Cologne, Germany’s largest
hub for engineering talent
The UK is the number one destination for all international movers into the European
The UK is the number one destination for all international movers into the European tech ecosystem, but it is
tech ecosystem, but it is closely
closely followedfollowed now by
now by Germany Germany
and then France and then France.
LE GE ND Netherlands 7.8%
Ireland 4.4%
Switzerland 4.0%
Sweden 3.9%
Poland 3.0%
Belgium 2.6%
0.0 2.5 5.0 7.5 10.0 12.5 15.0 17.5 20.0 22.5
% of all international movers
Note:
All interpretations of the LinkedIn data are made by Atomico,
not LinkedIn. A 'mover' is de ned by LinkedIn as somebody now Source:
working in the tech industry that has moved country or
industry sector for their primary employment between 2018
and 2017.
For additional context, it is worth analysing a similar dataset covering tech talent
For additional context, it is worth analysing a similar dataset covering tech talent movement in 2017 provided by
movement in 2017 provided bylast
LinkedIn for LinkedIn for last
year’s State year’s State
of European Tech of European Tech.
LE GE ND
Netherlands 7.4%
Comparison to Similar Data from SOET 2017
Spain 7.3%
Ireland 6.1%
Switzerland 4.1%
Sweden 3.3%
Poland 3.9%
0.0 2.5 5.0 7.5 10.0 12.5 15.0 17.5 20.0 22.5
% of all international movers
Note:
All interpretations of the LinkedIn data are made by Atomico,
not LinkedIn. A ‘mover’ is de ned by LinkedIn as someone now Source:
working in the tech industry that has moved country for their
primary employment between 2017 & 2016. Belgium not
provided in 2017.
Germany and UK are now the joint top destinations MIGRANT TALENT IN EUROPEAN TECH
for migratory tech talent moving within the
14.6 %
European tech industry The same % of all-intra European
movers within the European tech
industry end in either Germany or the
UK as their destination country.
Looking
Looking more closely more
at just closely at just migratory
intra-European tech tech
migratory talenttalent
movingmoving within
within Europe, Germany is now the joint #1 destination
the region, Germany is now the joint #1 destination together with the UK
together with the UK
Switzerland 5.9%
Poland 4.2%
Ireland 4.0%
Sweden 3.4%
Italy 3.2%
Note:
All interpretations of the LinkedIn data are made by Atomico,
not LinkedIn. A 'mover' is de ned by LinkedIn as somebody now Source:
working in the tech industry that has moved country or
industry sector for their primary employment between 2018
and 2017.
For additional context, it is worth analysing a similar dataset covering tech talent
For additional context, it is worth analysing a similar dataset covering tech talent movement in 2017 provided by
movement in 2017 provided by LinkedIn for last year’s State of European Tech.
LinkedIn for last year’s State of European Tech
LEG END
France 7.0%
Comparison to Similar Data from SOET 2017
Netherlands 7.0%
Switzerland 5.7%
Poland 5.3%
Ireland 6.9%
Sweden 2.9%
Note:
All interpretations of the LinkedIn data are made by Atomico,
not LinkedIn. A ‘mover’ is de ned by LinkedIn as someone now Source:
working in the tech industry that has moved country for their
primary employment between 2017 & 2016. Italy not provided in
2017.
The US is the largest destination of European tech talent moving outside of the
The US is the largest destination of European tech talent moving outside of the region, but other destinations are
region, but other destinations are now important too, such as Canada and Australia.
now important too, such as Canada and Australia.
Brazil 2.2%
Singapore 2.0%
Japan 1.5%
Note:
All interpretations of the LinkedIn data are made by Atomico,
not LinkedIn. A 'mover' is de ned by LinkedIn as somebody now Source:
working in the tech industry that has moved country or
industry sector for their primary employment between 2018
and 2017.
For additional context, it is worth analysing a similar dataset covering tech talent
For additional context, it is worth analysing a similar dataset covering tech talent movement in 2017 provided by
movement in 2017 provided by LinkedIn for last year’s State of European Tech.
LinkedIn for last year’s State of European Tech
Brazil 1.8%
Singapore 3.1%
Japan 1.4%
Note:
All interpretations of the LinkedIn data are made by Atomico,
not LinkedIn. A ‘mover’ is de ned by LinkedIn as somebody now Source:
working in the tech industry that has moved country for their
primary employment between 2017 and 2016.
India 39.4%
Top 10 non-European source countries for
movers into the European tech industry United States 16.9%
Brazil 7.5%
Tunisia 3.7%
Australia 3.3%
Morocco 3.2%
Canada 2.6%
China 2.0%
Other 1.5%
0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0
% of non-European tech movers
Note:
All interpretations of the LinkedIn data are made by Atomico,
not LinkedIn. A 'mover' is de ned by LinkedIn as somebody now Source:
working in the tech industry that has moved country or
industry sector for their primary employment between 2018
and 2017.
India and the US are more important sources of migratory talent moving into and
India and the US are more important sources of migratory talent moving into and within the European tech
within the European tech industry than any single European source country.
industry than any single European source country
India 21%
Top 10 source countries for all movers into
and within the European tech industry United States 9%
United Kingdom 7%
Germany 5%
France 4%
Brazil 4%
Spain 3%
Italy 3%
Netherlands 2%
Russia 2%
0 3 5 8 10 13 15 18 20 23
% of tech movers
Note:
All interpretations of the LinkedIn data are made by Atomico,
not LinkedIn. A 'mover' is de ned by LinkedIn as somebody now Source:
working in the tech industry that has moved country or
industry sector for their primary employment between 2018
and 2017.
42 %
as ‘hard to fill’ 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
“ 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
Raj Mukherjee
hire quality candidates and to close the talent gap in tech.”
Indeed
Note:
This is intended as a representative selection of talent
that has moved to Europe from the US and should not be
considered complete.
16.2%
LEGEND
15.0
Share of US-originated cross-border searches (%)
10.0
5.0
0.0
2018 2017
Source:
13.96%
13.96%
%%share
shareby
bydestination
destinationcountry
country of
of US.-
US.- UK
UK
10.56%
10.56%
originated
originatedcross-border
cross-bordersearches
searches containing
containing
'software'and
'software' and'engineer'
'engineer' 2.74%
2.74%
Ireland
Ireland
1.73%
1.73%
L LE
EGGEND
E ND 1.46%
1.46%
Germany
Germany
2018 1.60%
1.60%
2018
2017
2017 0.84%
0.84%
Netherlands
Netherlands
0.88%
0.88%
0.42%
0.42%
France
France
0.36%
0.36%
0.35%
Spain 0.35%
Spain 0.24%
0.24%
0.30%
Italy 0.30%
Italy 0.41%
0.41%
0.29%
Sweden 0.29%
Sweden 0.18%
0.18%
0.15%
Belgium 0.15%
Belgium 0.06%
0.06%
0.10%
Denmark 0.10%
Denmark 0.09%
0.09%
0.10%
Portugal 0.10%
Portugal 0.03%
0.03%
0.08%
Austria 0.08%
Austria 0.07%
0.07%
0.00 2.50 5.00 7.50 10.00 12.50 15.00
0.00 2.50 5.00
Share (%) 7.50
by destination country 10.00 searches12.50
of US-originated 15.00
Share (%) by destination country of US-originated searches
Source:
Source:
By comparing the nationality of survey respondents with their country of residence, it’s
By comparing
possible to get a proxy the nationality
for the relative shareofofsurvey respondents
migrant with
talent in their country
different of residence,
regions it's possible to get a proxy for
in Europe.
the relative share of migrant talent in different regions in Europe. The UK and Germany, led by London and Berlin,
The UK and Germany, led by London and Berlin, are the two most dependent on migrant talent.
are the two most dependent on migrant talent.
National
Southern Europe 22% 78%
0 20 40 60 80 100
% of respondents
Note:
Founder and private tech startup and scaleup employee Source:
respondents only.
The UK tech ecosystem is the most heavily MIGRANT TALENT IN EUROPEAN TECH
dependent on migrant talent of any in Europe
European tech startups are highly dependent on MIGRANT TALENT IN EUROPEAN TECH
talent that has migrated to work for companies
28 %
outside their home countries of founders and employees of private
European tech startups who are working
outside of their home countries
Stockholm 24%
Paris 23%
Helsinki 14%
0 5 10 15 20 25 30 35 40 45 50
% of immigrants in tech workforce
Note:
Only respondents working in the tech industry. Cities with less Source:
than 100 respondents ltered out.
Germany 8.8%
LEG END
Top 10 Sources - 2018 Netherlands 4.6%
Spain 4.3%
Russia 3.8%
Ireland 3.7%
Sweden 2.6%
Switzerland 2.6%
Ukraine 2.5%
Note:
All interpretations of the LinkedIn data are made by Atomico,
not LinkedIn. A 'mover' is de ned by LinkedIn as somebody now Source:
working in the tech industry that has moved country or
industry sector for their primary employment between 2018
and 2017.
Spain 3.7%
Ireland 5.1%
Sweden 2.7%
Switzerland 2.4%
Ukraine 3.2%
Note:
All interpretations of the LinkedIn data are made by Atomico,
not LinkedIn. A ‘mover’ is de ned by LinkedIn as someone now Source:
working in the tech industry that has moved country for their
primary employment between 2017 % 2016. Russia not
provided in 2017.
“ I see two major threats, the first one being education and talent.
Europe is among the top in terms of talent & research, but it shouldn’t
be taken for granted. The challenge is that if we don’t see forward-
thinking, long-term and brave investments in the field of education,
we might lose this edge that’s keeping Europe on the surface. Skilled
immigration difficulties are taking a toll on Europe’s scaleups, and
we are in bad need of more openness in terms of talent acquisition –
Rasmus Ekholm startup visas being great initiatives towards solving this problem.”
Slush
The UK is the #1 source country for tech talent that is moving within and out of Europe, but it has
The UK is the #1 source country for tech talent that is moving within and out of Europe, but it has a much larger
a much larger share of those moving
share of those movingoutside ofthe
outside of the European
European techtech ecosystem
ecosystem thanit within it.
than within
15.1%
United Kingdom
Top 10 European source countries of 34.9%
European movers in 2018 Germany 9.6%
8.9%
France
LEGEND 12.3%
7.0%
Moving Inside Europe Spain
Russia 4.4%
4.3%
Poland
n/a%
3.9%
Ireland
Turkey 3.1%
n/a%
Note:
All interpretations of LinkedIn data made by Atomico, not
LinkedIn. A 'mover' is de ned by LinkedIn as someone now Source:
working in tech industry who has moved country or industry
sector for primary employment between 2018 & 2017. PL & TR
outside not provided.
The UK is today the #1 destination for non-European talent, but faces strong challenges as
The UK is today the #1 destination for non-European talent, but faces strong challenges as the destination of
the destination of choice as the range of viable alternative hubs across Europe expands,
choice as the range of viable alternative hubs across Europe expands, especially in Germany, France and the
especially in Germany,
Netherlands and the Netherlands.
France
Ireland 4.7%
Sweden 4.3%
Portugal 2.9%
Belgium 2.5%
Switzerland 2.1%
Note:
All interpretations of the LinkedIn data are made by Atomico,
not LinkedIn. A 'mover' is de ned by LinkedIn as somebody now Source:
working in the tech industry that has moved country or
industry sector for their primary employment between 2018
and 2017.
Taavet Hinrikus
TransferWise
For additional context, it is worth analysing a similar dataset covering tech talent movement in 2017 provided by
LinkedIn
For additional context, it isfor
For additional last
worth year’
context,s State
analysing ofaEuropean
similar
it is worth Tech
dataset
analysing covering
a similar tech talent
dataset covering tech talent movement in 2017 provided by
movement in 2017 provided
LinkedIn forby LinkedIn
last forof
year’s State last year’s Tech
European State of European Tech.
Top 10 European destinations for non- United Kingdom 32.6%
Spain
Ireland 5.5%
5.0%
Ireland
Sweden 3.5%5.0%
Sweden
Switzerland 3.5%
2.3%
Though the largest share of founders in each region have seen no change in the trend of
candidates relocating internationally to join their business, they are significantly more
Thought the largest share of founders in each region have seen no change in the trend of candidates relocating
likely to have experienced an increase
internationally in this
to join their trendthey
business, in the past cantly
are signi 12 months, rather
more likely thanexperienced
to have a an increase in this trend
decline. A larger share
in theof founders
past 12 months, in rather
France & Benelux
than a decline. and DACH
A larger have
share seen aninincrease
of founders in
France & Benelux and DACH have seen an
this trend, while UKincrease
founders aretrend,
in this more likely
while UK than anyare
founders region
more to have
likely thanseen a decrease.
any region to have seen a decrease.
Increase
France & Benelux
No change
Decrease
Nordics
Southern Europe
UK & Ireland
0 20 40 60 80 100
% of respondents
Note:
Respondents stating 'Not able to comment' ltered out. Source:
Founder respondents only.
Increase
France & Benelux
No change
Decrease
Nordics
Southern Europe
UK & Ireland
0 20 40 60 80 100
% of respondents
Note:
Respondents stating 'Not able to comment' ltered out. Source:
Founder respondents only.
LE GE ND
Base Salary
USD
200,000
Incentive Pay
Note:
Incentive pay is cash bonus or incentive, which is not related to
equity or equity value. 100,000
0
Europe US Europe US Europe US Europe US
Source:
US
20 19% 19%
13% 13%
12%
10%
10
0
Seed Funding Only Post Series A Post Series B Post Series C
Note:
Advanced-HR’s compensation report details founder’s cash
and equity pay as reported by participating private, venture- Source:
backed companies. Equity data is displayed as a percentage of
European tech companies have historically either chosen not to use or have not been
fully diluted shares. Equity not related to salary nor incentives.
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
The average level of employee ownership by funding round
ownership by funding round
stage stage
is broadly in Europe
similar is compared
in Europe broadly intoline with levels in the US.
the US
20.0
Employee ownership by funding round stage
in 50th percentile by region
Executives
% of ownership
Staff + Other
Unissued 10.0
Note:
This details equity held by executive-level employees, staff-
level employees and remaining unissued options. It excludes 5.0
Founder’s Shares and equity allocations displayed as a
percentage of fully diluted shares. Equity not related to salary
nor incentives
0.0
Europe US Europe US Europe US Europe US
Source:
LEGEND
Increase
No change 11-100
Decrease
100+
0 10 20 30 40 50 60 70 80 90 100
% of respondents
Note:
Respondents stating 'Not able to comment' ltered out. Source:
Founder respondents only.
56 %
awareness of stock options of founders of European private tech
start-up or scale-ups with more than 100
employees report an increase in employee
awareness of stock options as a form of
compensation
As Europe’s tech ecosystem continues to evolve and mature, it is helping to drive greater
As Europe's
access to talent that has built tech ecosystemand
significant continues to evolve
relevant priorand mature, it is
experience athelping
otherto drive greater
startups or access to talent that has
built signi cant and relevant prior experience at other startups or scaleups. This is especially true for the region's
scaleups. This is especially true for the region’s more scaled startups with 55% of founders
more scaled startups with 55% of founders of companies with more than 100 employees reporting an increase in
of companies withthis
more than 100 employees reporting an increase in this talent trend.
talent trend.
LEG END
Increase 11-100
No change
Decrease
100+
0 10 20 30 40 50 60 70 80 90 100
% of respondents
Note:
Respondents stating 'Not able to comment' ltered out. Source:
Founder respondents only.
The impetus for founders to ensure they have designed competitive incentives
mechanisms to attract talent is underpinned by the growing level of competition for talent
Theecosystem.
in the European tech impetus for founders
Foundersto ensure
from they have designed
all regions, competitive
though incentives
at varying levels,mechanisms to attract talent is
underpinned by the growing level of competition for talent in the European tech ecosystem. Founders from all
report increased levels of competition from both global tech giants, as well as homegrown
regions, though at varying levels, report increased levels of competition from both global tech giants, as well as
local startups thathomegrown
are playinglocal
in the same
startups talent
that pool. in the same talent pool.
are playing
100
Founders' view on change in competition for
talent from global tech giants and local
startups, by subregion 75
% of respondents
LEGEND
Tech giants, Increase
50
Local startups, Increase
Tech giants, No change
Local startups, No change
25
Tech giants, Decrease
Local startups, Decrease
0
Global tech giants Global tech giants Global tech giants Global tech giants Global tech giants Global tech giants Global tech giants
Central Europe DACH Eastern France & Nordics Southern UK & Ireland
& Baltics Europe Benelux Europe
Note:
Respondents stating 'Not able to comment' ltered out. Source:
Founder respondents only
54 %
global tech companies of European founders have experienced
an increase or significant increase in
competition for talent from global tech
companies in the past 12 months
The effect of increased competition for talent plays out in different ways, including salary
The effect churn
inflation, greater employee of increased competition
and more for talent
difficulty playsroles.
in filling out in different ways,point,
On the last including
forsalary in�ation, greater
employee churn and more di�culty in �lling roles. On the last point, for example, the number of job postings for
example, the number of job postings for ‘software engineer’ roles that prove hard to fill has
'software engineer' roles that prove hard to �ll has increased in every European country for which data is available,
increased in every except
European country for which data is available, except Denmark.
Denmark
46%
Share of software engineer job postings that Netherlands
42%
are hard to ll
42%
Spain
LEG END 34%
2018 42%
Belgium
34%
2017
41%
Ireland
35%
36%
Germany
32%
35%
Italy
27%
33%
France
25%
32%
Austria
25%
32%
Denmark
35%
29%
UK
20%
28%
Sweden
26%
27%
Portugal
20%
0 10 20 30 40 50
% hard to �ll 'software engineer' job postings
Note:
Hard to �ll is de�ned as % of 'software engineer' job postings Source:
on the Indeed site(s) for more than 60 days.
The extent to which it has become harder to fill software engineer job postings in Europe
The extent to which it has become harder to ll software engineer job postings in Europe varies at the country
varies at the country level.
level. Thehas,
The UK UKbyhas,
somebymargin,
some experienced
margin, experienced the largest
the largest overall increaseoverall
in the share of jobs that have become
increase in the share of jobs
hard to ll. that have become hard to fill.
Austria 28.3%
Italy 28.1%
Spain 23.7%
Belgium 22.7%
Ireland 16.6%
Germany 11.2%
Netherlands 9.4%
Sweden 6.8%
Denmark -9.6%
Note:
% change in % of software engineer jobs that are hard to ll in
2018 versus 2017 by country. Hard to ll is de ned as % of Source:
'software engineer' job postings on the Indeed site(s) for more
than 60 days.
4 Accenture
5 Siemens
6 IBM
7 Google
8 Hewlett Packard
9 Yahoo!
Source:
European universities are important sources of founder talent, especially the leading technical and bus
universities. Notably, Harvard and Stanford also features amongst the top 20 academic institutions tha
large number of alumni that have founded European tech ofcompanies
European universities are important sources of Top 10 institutions by number alumni who have founded companies
have founded European tech companies. 3 University of Oxford Oxford United Kingdom
Source:
#1
The University of Cambridge is the top
source of founders of European venture-
backed startups
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.
51%
Too risky
Selecting any that apply, what are the main
reservations you have when considering Lack of funding
63%
40%
whether to become an entrepreneur?
47%
Lack of ideas
L E GE ND 29%
Inability to find a co-founder
Female
Lack of support from universities
Male 18%
Unattractive lifestyle
13%
0 10 20 30 40 50 60 70
% of respondents
Note:
Student respondents only Source:
63 %
reservations that female students have when Female students cite access to funding as
their main reservation when considering
considering entrepreneurship whether to become an entrepreneur,
versus just 40% of male students
Stated brie y, what could be done to better Bridging the knowledge gap 29%
support students to move straight into
entrepreneurship? Gaining practical experience in tech 16%
% of respondents
University-linked accelerators 12%
Other 9%
0 5 10 15 20 25 30
% of respondents
Note:
Student respondents only. Based on respondents that gave
explicit responses only.
Source:
“ 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.”
Alice Bentinck
EF
Campus Capital First Momentum Oxford Seed Fund The Creator Fund UCL Entrepreneurs Wave Ventures
United Kingdom Ventures United Kingdom Pan-European VC Fund Finland
Germany United Kingdom
ARTICLES
2,500
Number of funded companies (2013 to 9M London
2018) versus number of tech-related Meetups
(2013 to 9M 2018) per city, selected European 2,000
cities
# Funded companies
1,500
Paris
1,000
Berlin
Stockholm
500 Amsterdam
Helsinki Dublin
Prague Warsaw
0
0 5,000 10,000 15,000 20,000 25,000 30,000
# Meetups
Source:
But not all cities with large engineering talent pools have been able
to build vibrant communities where
But not all cities thatpeople meet
have large up frequently
engineering to have been able to build vibrant communities where
talent pools
exchange ideas andpeople
knowledge.
are meeting up with high frequency to exchange ideas and knowledge.
Amsterdam
200,000.00
Cologne
Frankfurt am Main
Munich Berlin
100,000.00 Brussels
0.00
0.00 0.02 0.05 0.07 0.10 0.12 0.15
# Meetups per developer
Source:
Stockholm
Amsterdam Dublin
Hamburg
Cologne Kiev Prague
0.00
-10,000.00
0.00 0.02 0.05 0.07 0.10 0.12 0.15
# Meetups per developer
Source:
Newcastle, United
Sofia,Kingdom
Bulgaria 77% 88%
Sofia,Germany
Essen, Bulgaria 77%
75%
Cardiff, United
Essen, Kingdom
Germany 74%
75%
The number of tech-related Meetup events in Europe continues to hit new highs, although the rate of year-on-year
The number of tech-related Meetup events in Europe continues to hit new highs,
growth
The is decelerating.
number In 2018,
of tech-related the level
Meetup of activity
events in Europeoncontinues
Meetup alone equates
to hit to around 200the
events
rate hosted every
although the rate of year-on-year
single day throughgrowth
the year. is decelerating. In 2018, the level of new highs,
activity onalthough of year-on-year
growth is decelerating. In 2018, the level of activity on Meetup alone equates to around 200 events hosted every
Meetup alone equates to around 200 events hosted every single day through the year.
single day through the year.
80,000 68
# of tech-related Meetups hosted in Europe
72,233
per annum 80,000 68
# of tech-related Meetups hosted in Europe
65,101 72,233
per annum 60
LEG END 60,000 51 65,101
60
LEGEvents
END hosted 60,000 51 51,135
YoY growth
YoY growth
Events (%)
hosted
# Meetups
51,135
40
YoY growth
36,226
40
(%) (%)
27
40,000
36,226
23,924 27
20
20,000
23,924 11
20
20,000
11
0 0
2014 2015 2016 2017 2018
0 0
2014 2015 2016 2017 2018
Note: Source:
2018 annualised based on data to end of September 2018
Note: Source:
2018 annualised based on data to end of September 2018
The
The density
density of these
of these tech-related
tech-related Meetup Meetup
communitiescommunities relative to the overall population of individual cou
relative to the
overall population of
varies signi cantly individual
across
The density countries
Europe,
of these varies significantly
led byMeetup
tech-related Ireland, across relative to
Luxembourg,
communities thetheNetherlands and
overall population Switzerland.
of individual countries
Europe, led by Ireland, Luxembourg,
varies the Netherlands
signi cantly across and
Europe, led by Switzerland.
Ireland, Luxembourg, the Netherlands and Switzerland.
Source:
Source:
In Europe’s largest and most mature tech communities, there are signs of a slowdown in
In Europe's
the level of participation largest
around and most mature
tech-related techevents,
Meetup communities, there arethose
but outside signs of a slowdown in the level of participation
leading
In Europe's
around largest and
tech-related most mature
Meetup events, tech
but communities,
outside those there are
leading signs
hubs of acontinues
there slowdowntoinbe
the levelgrowth
rapid of participation
in
hubs there continues to be
In Europe's
around
rapid growth
largest
tech-related
and most
Meetup
in events,
engagement, including
mature tech communities, in cities
there suchofas
are signs a slowdown in the level of participation
engagement,
around including
tech-related in cities
Meetup suchbut
events, as outside
but Hamburg,
outside
those
those
leading
Zurich,
leading
hubs there
Manchester
hubs there
continues to be rapid growth in
or Wroclaw.
continues to be rapid growth in
Hamburg, Zurich, Manchester
engagement, or Wroclaw.
including in cities such as Hamburg, Zurich, Manchester or Wroclaw.
engagement, including in cities such as Hamburg, Zurich, Manchester or Wroclaw.
Top 20 hubs by level of tech Meetup activity
315,839 315,497
in 2018,
Top ranked
20 hubs by number
by level of techofMeetup
Meetupactivity DATASET: TOP 5 HUBS
Top 20 hubs by level of tech Meetup activity
attendees
292,792 315,839 315,497
in 2018, ranked by number of Meetup 300,000 315,839 315,497
in 2018, ranked by number of Meetup 292,792
attendees 300,000 292,792
attendees 300,000
attendees
L EG E ND 209,386
attendees
L EGLondon
E ND 200,000 209,386
attendees
L EG E ND 209,386
160,608
London
Berlin 200,000 150,866 153,528
# Meetup
London 200,000 136,537
160,608
Berlin
Paris 150,866 153,528
# Meetup
160,608
Berlin 150,866 153,528
# Meetup
105,118 136,537
Paris
Amsterdam 136,537
Paris 100,000 83,239 105,118 81,746 84,647
Amsterdam
Munich 105,118
63,857
Amsterdam 61,313
83,239 84,647
100,000 81,746
Munich 100,000 83,239 41,471 81,746 84,647
35,714 37,333
61,313 63,857
Munich 63,857
61,313
41,471
In Europe's largest and most mature tech communities, 35,714there are signs of a slowdown in the level of participation
11,492
35,714
37,333
37,333 41,471
In Europe's
around largest and
tech-related most mature
Meetup events, tech communities,
but outside 11,492there are signs of a slowdown in the level of participation
0those leading hubs
11,492 there continues to be rapid growth2018
in
2014 2015 2016 2017
around tech-related
engagement, Meetup
including events,
in cities suchbut outside0 those
as Hamburg, leading hubs there continues to be rapid growth in
0 Zurich,
2014 Manchester
2015 or Wroclaw.
2016 2017 2018
engagement, including in cities such as Hamburg, Zurich, 2014 Manchester
2015 or Wroclaw.
2016 2017 2018
Note: Source:
L2018
EG E ND
annualised based on RSVPs to end of September 2018 80,000DATASET: HUBS 6-10
Note: Source: 74,792
LNote:
EG E ND Source:
2018Madrid
annualised based on RSVPs to end of September 2018 80,000 74,792
2018 annualised based on RSVPs to end of September 2018
Madrid 65,332
Warsaw
Warsaw 65,332 59,895
Barcelona 58,559
60,000 59,895
Barcelona 58,559
Istanbul 50,929 52,017
60,000
attendees
46,445
Dublin
37,206
# Meetup
40,000
37,206
# Meetup
40,000
25,852
25,852 22,174
18,516 22,174
20,000 16,605
18,516
20,000 16,605
8,880
e tech communities, 8,880 there are signs of a slowdown in the level of participation
7,604
2,207 7,604
, but outside those leading hubs there continues to be rapid growth in
2,207
0
h as Hamburg,
e tech communities,
0
Zurich,
2014 Manchester
there are signs
2015 or
of Wroclaw.
a slowdown
2016 in the
2017level of participation
2018
Oslo 28,523
20,575
30,000 19,705
27,539
18,805
Manchester 20,000 24,424
15,922
22,217 13,875
12,580 19,705 20,575
18,805 11,249
20,000
10,000 8,094 15,922
6,774 13,875
12,580
3,174 11,249
In Europe's largest and most mature tech communities,
10,000 8,094 there are signs of a slowdown in the level of participation
6,774
around tech-related Meetup events, but outside0 those leading hubs
2014
3,174 2015there continues
2016 to be rapid
2017 growth2018
in
In Europe's largest
engagement, and most
including mature
in cities suchtech communities,
as Hamburg, Zurich, there are signsorofWroclaw.
Manchester a slowdown in the level of participation
around tech-related Meetup events, but outside 0 those leading hubs there continues to be rapid growth in
2014 2015 2016 2017 2018
engagement,
Note: including in cities such as Hamburg,
Source: Zurich, Manchester or Wroclaw.
2018 annualised based on RSVPs to end of September 2018 38,018
40,000
L EG E ND HUBS 16-20
Note: Source: 33,680
Budapest 40,000 38,018
2018 annualised based on RSVPs to end of September 2018
L EGWroclaw
E ND
28,869
30,000 33,680
Budapest
Vienna
Meetup attendees
Wroclaw
Copenhagen 23,408 28,869
23,112
22,676
30,000
Vienna
Frankfurt
# Meetup#attendees
19,062 18,607
Copenhagen 20,000 23,408 23,112
16,829 22,676
Frankfurt 14,308
19,062 18,607
20,000 11,302
16,829
9,131 14,308
10,000 7,889
11,302
4,216 3,746
9,131
10,000 1,445 7,889
4,216 3,746
0
2014
1,445 2015 2016 2017 2018
0
2014 2015 2016 2017 2018
Note: Source:
2018 annualised based on RSVPs to end of September 2018
Note: Source:
2018 annualised based on RSVPs to end of September 2018
Talent is necessary, but talent alone is not TECH COMMUNITIES AND COMPANY FORMATION
enough. Cities need to engage that talent in active
0.914
communities to drive greater levels of company The correlation between the strength of
formation tech community engagement within cities
and the rate of company formation and
funding has an r-squared of 0.914.
Data on the size of tech-related Meetup communities per city is useful in helping to identify a new generation of
hubs that are emerging across the region and are achieving a meaningful scale in terms of the number of active
participants
Data on the size of tech-related in local tech-related MeetupTop
Meetup events
10 most popular tech-related Meetup event topics in Europe in 2018
communities per city is useful in helping to identify Country 2016 2017 2018 YoY 2017-2018 (%)
a new generation of hubsEuropean
that are emerging
cities across
surpassing 1,000 members of Antalya Turkey 97 209 1,715 721
tech-related Meetup groups for the rst time
the region and are achieving
in 2018
a meaningful scale in Cologne Germany 83 407 1,061 161
terms of the number of active participants in local Minsk Belarus 580 895 1,259 41
tech-related Meetup events Ghent Belgium 329 883 1,212 37
Source:
200
The signs that every#city in Europe is becoming - or will eventually become - a tech city
European cities with >50 tech-related
182
The signs
Meetup thatperevery
events year city is becoming - or will eventually become - a tech city in Europe continue
172 to strengthen.
continue to strengthen. There are now 180+ hubs across Europe that host tech-related
There are now more 180+ hubs across Europe that host tech-related Meetup events with high levels of regularity
Meetup events withthroughout
high
LEG ENDlevels of regularity throughout 150
the year. the year. 141
# European cities
# European cities
113
200
# European cities with >50 tech-related 100 182
Meetup events per year 172
74
LEGEND 150
48 141
# European cities 50
# European cities
25 113
100
0
2012 2013 2014
74 2015 2016 2017 2018
50 48
Note: Source:
2018 annualised based on data to end of September 2018 25
The extent to which the growth of the European 0 tech ecosystem to now has been driven by just a handful of cities
2012 2013 2014 2015 2016 2017 2018
is evident by comparing the share of capital invested over a �ve-year period in those leading cities versus their
relative share of professional developer talent. For example, 76% of all capital invested into Europe since 2013 has
�owed
Note: to just 10 hubs representing just Source:
30% of the talent pool.
2018 annualised based on data to end of September 2018
It’s clear that Europe’s tech ecosystem to date has been driven by just a handful of cities.
Share of capital investedthe
(2013 to 9M 2018)
The share of capitalThe extent
invested toover
which growth
a five-year of the European
period
versus share of professional developer talent
techcities
in leading
80 ecosystem to now
versus has
their been driven by just
relative 76%a handful of cities
is evident
share of professionalpooldeveloperby comparing
for Top 3, 5 & talent
the share of capital invested over a �ve-year
10 hubs is telling. For example, 76% of all capital invested
period in those leading cities versus their
relative share of professional developer talent. For example, 76% of all capital invested into Europe since 2013 has
into Europe since 2013 has flowed to just 10 hubs representing just 30% of the talent pool.
�owed to just 10 hubs representing just 30%60of the talent pool.
62%
LEGEND
% of European total
52%
% capital invested
% professional developers
Share of capital invested (2013 to 9M 2018) 80
40 76%
versus share of professional developer talent
pool for Top 3, 5 & 10 hubs 30%
62%
60 20%
LEGEND 20
15%
% of European total
52%
% capital invested
% professional developers
400
Top 3 hubs Top 5 hubs Top 10 hubs
30%
Note:
Top 3 hubs based on total capital invested 2013-3Q2018 are
Source: 20%
London, Berlin, and Paris. Top 5 adds Stockholm and 20
Barcelona. Top 10 adds Cambridge, Dublin, Amsterdam, Madrid, 15%
and Moscow.
0
Top 3 hubs Top 5 hubs Top 10 hubs
Note:
Top 3 hubs based on total capital invested 2013-3Q2018 are
London, Berlin, and Paris. Top 5 adds Stockholm and Source:
Barcelona. Top 10 adds Cambridge, Dublin, Amsterdam, Madrid,
and Moscow.
68 In Partnership with & www.thestateofeuropeantech.com
05.2 Every City is a Tech City
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 showsIt's interesting to compare the 'bang for buck' that different cities have achieved by measuring the level of capital
Berlin stands apart as a real outlier, having attracted a disproportionate
investment per local professional developer in those cities. In doing this, Berlin stands apart as a real outlier having
level of investmentattracted
relativeato its local developer
disproportionate level of pool.
investment relative to its local developer pool.
LEGEND 75,000
on
in
ris
rg
rid
ki
en
on
rli
in
bl
ol
bu
nd
ag
Pa
ad
Be
ls
Du
el
kh
nh
Lo
He
rc
oc
Ha
pe
Ba
St
Co
Note:
Investment amounts are based on capital invested in the city in
aggregate between 2012 and September 2018 divided by the Source:
total number of professional developers (2018) in the city.
Berlin’s relatively small professional developer CAPITAL BANG PER DEVELOPER BUCK
community has attracted a disproportionate
$97,404
amount of capital investment compared to any other
European city, including London
Yes
No Investor 91% 9%
LEG END
Yes
No 11-100 67% 33%
The European
The European ecosystem
ecosystem bene�ts bene ts from from interconnectivity
interconnectivity
0 10
inaanumber
20
in number
30
ofways
40
of ways 50
thathelp
that helpdrive
60
drive
70
the
the
80
�owowofof 100
90
% of respondents
knowledge, talent and capital. The
knowledge, talent and capital. The �ow of useful ideas and knowledge throughout the European tech ecosystem isis
ow of useful ideas and knowledge throughout the European tech ecosystem
enabled
Note:
enabled byonly
by
In subregions,
exchanges
exchanges between
between
founders' and startup/scale-up
counterparts, whether
counterparts,
employees'
whetherfounders
foundersororinvestors.
investors.
responses included. In company sizes, only founders' DATASET: SUBREGION
Source:
responses.
II have
have exchanged
exchanged useful
useful ideas
ideas and
and knowledge
knowledge Central Europe & Baltics 78% 22%
with my
with my counterparts
counterparts from
from other
other hubs
hubs Founder or startup/
67% 33%
scale-up employee
DATAS ET:
DATAS ET: S
OCCU
UBREPATION
GION
DACH 73% 27%
LE GEND
LEG END Eastern Europe 79% 21%
Yes
Yes
No
No Investor
France & Benelux 67% 91% 33% 9%
Note:
Note:
In subregions,
In subregions, only
only founders'
founders' and
and startup/scale-up
startup/scale-upemployees'
employees'
responses included.
responses included. In
In company
company sizes,
sizes, only
onlyfounders'
founders' Source:
Source:
responses.
responses.
LEG END
Increase
No change 11-100
Decrease
100+
0 10 20 30 40 50 60 70 80 90 100
% of respondents
Note:
Respondents stating 'Not able to comment' �ltered out. Source:
Founder respondents only.
LEG END
Yes
No
11-100 33% 67%
0 10 20 30 40 50 60 70 80 90 100
% of respondents
Note: Source:
Founder respondents only.
LEG END
Yes
No 11-100 35% 65%
0 10 20 30 40 50 60 70 80 90 100
% of respondents
Note: Source:
Founder respondents only.
unanimously built relationships and bene t from positive interactions with fellow investors from other hubs across
the region.tech ecosystem also bene ts from
Europe's Source:
an interconnected ow of capital, driven by connections between
Europe's tech ecosystem also bene ts from an interconnected
COMPANY
Source:
Source: ow of capital, driven by connections between
SIZE BY # OF EMPLOYEES
investors and founders across borders. Europe's VCs, in particular, are highly connected and have almost
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
unanimously built relationships and bene t from positive interactions with fellow investors from other hubs across
the region.
the region. <=10 59% 41%
Note:
In subregions, only founders' and startup/scale-up employees'
I have
Note: interacted
Note:
responses included. Inpositively
company sizes,with
only investors
founders'
Inresponses.
In
subregions,
subregions, 11-100
from otheronlyonly
hubsfounders'
founders'
and
and
startup/scale-up
startup/scale-upemployees'
employees'
Founder or 72% 28%
responses
responses
included.
included.
InIn
company
company
sizes,
sizes,
only
only
founders'
founders' startup/scale-up
<=10 59%
56% 44% 41%
responses.
responses.
DATASE T : OC CUPATI O N employee
Source:
Note:
In subregions, only founders' and startup/scale-up employees'
responses included. In company sizes, only founders'
responses.
0 20 40 60 80 100
% of respondents
Note:
In subregions, only founders' and startup/scale-up employees' Source:
responses included. In company sizes, only founders'.
If you were to start over, where would you I would stay where we are now 63.9%
choose to found and build your company?
Note: Source:
Founder respondents only
What was the most important consideration I was already living here 46.1%
for you when choosing where to locate
your company when you founded it? Strength of my personal network here 14.2%
LEG END
Access to relevant talent 7.2%
% of counders
Other 2.7%
Note: Source:
Founder respondents only
European teams entering Y Combinator are voting with their feet on where to build their
business; YC graduates who have returned to Europe have raised 5x more in the past two
European teams entering Y Combinator are voting with their feet on where to build their business; YC graduates
years than those who moved their startups
that have returned to Europe to the
have US (the
raised difference
5x more intwo
in the past absolute amounts
years than those that moved their startup to the
across years is simply
US a function of the relative age of the different cohorts).
$66.9M $71.6M
50.0
$36.6M $32.3M
$25.6M
$8.8M $5.9M $5.0M
0.0
2014 2015 2016 2017 2018
Blossom
Source: Blossom Capital
Capital
5x
European founders that have graduated
from Y Combinator and returned to Europe
have raised 5x more than those that moved
their startup to the U.S.
Blossom Capital
European graduates of YC that elect to build from Europe are attracting investment from the region's leading
investors, as well as from top US-based funds.
Selected examples of YC graduates that are building from Europe
European graduates of YC that elect to build
from Europe are attracting investment from the YC Cohort HQ Location Selected Investors
Selected examples of YC graduates that are
region’s leading investors, as well as from top Duffel Summer 2018 London Blossom, Index
building from Europe
U.S.-based funds. Let's do This Winter 2018 London Shasta
Blossom Capital
Blossom
Source:
Capital
LEG END
% of companies
20
0
Companies
Note:
Based on a sample 120 European tech companies that have
reached $B+ milestone and/or raised more than $50M in Source:
venture capital.
US 59%
Top 10 most popular countries for
international o ce locations of European UK 53%
tech scale-ups that have internationalised
their o ce footprint Germany 31%
Australia 20%
LEGEND
% of internationalised companies with o ce in Netherlands 18%
country
Spain 18%
France 16%
Italy 14%
Poland 14%
0 10 20 30 40 50 60
% of internationalised companies with o ce in country
Note:
Based on a sample 120 European tech companies that have
reached $B+ milestone and/or raised more than $50M in Source:
venture capital.
Although London ranked as the most cited destination city amongst all respondents, there
are clear differences in the top city preferences when analysing the results based on the
sub-region of origin of survey participants.
Although London ranked as the most cited destination city amongstAlthough
OnLondon
thatranked
all respondents,
basis, it’s
asclear
there are
apparent
the most
that London
cited destination
differences in
is only
city amongst all respondents, there are clear differences in
the
the top city number
preferences one
when city for
analysing respondents
the results based on thefrom UKcity
the top
sub-region &origin
of Ireland
preferences and
when
of survey from the
analysing
participants. OnMediterranean
the region.of origin of survey participants. On
results based on the sub-region
that basis,
that basis, it's apparent that London is only the number city for respondents it's apparent
from thatand
UK & Ireland London
from is
theonly the number city for respondents from UK & Ireland and from the
Mediterranean region. DATASET: BENELUX Mediterranean region. DATASET: WESTERN EUROPE
Top 5 hubs where
founders
Top 5 hubs where founders would
would start a Amsterdam
Top 5 hubs where founders would start a Berlin
48 42
start by
company tomorrow, a company
region company tomorrow, by region
tomorrow, by
DATAS ET : B ENELUX DATAS E T : WE ST E R N E U R OP E
London 33 Paris 37
LE G END region L E G E ND
Share of founders (%) Share of founders (%)
Berlin 30 London 23
Eindhoven 18 Cologne 14
Paris 18 Barcelona 13
that basis, it's apparent that London is only the number city for respondents
Note:
that
Note:
from
basis, it'sUK & Ireland
apparent thatand from the
London is only the number city for respondents from UK & Ireland and from the
Mediterranean region.
Founders could allocate 3 votes. Percentages indicate how
DATASET: NORDICS & BALTICSMediterranean region.
Source: Founders could allocate 3 votes. Percentages indicate how Source:
DATASET: CENTRAL & EASTERN EUROPE
many founders would like to startup in each respective city. many founders would like to startup in each respective city.
Copenhagen 26 Lisbon 13
Amsterdam 15 Warsaw 12
that
Note:
basis, it's apparent that London is only the number city for respondents that
Note:
basis, from UK & Ireland
it's apparent thatand Londonfrom isthe
only the number city for respondents from UK & Ireland and from the
Mediterranean region.
Founders could allocate 3 votes. Percentages indicate how
DATASET: MEDITERRANEAN Mediterranean region.
Source: Founders could allocate 3 votes. Percentages indicate how Source:
DATASET: UK & IRELAND
many founders would like to startup in each respective city. many founders would like to startup in each respective city.
Milan 20 Barcelona 21
Lisbon 15 Dublin 16
0 10 20 30 40 50 0 10 20 30 40 50 60 70 80
Share of founders (%) Share of founders (%)
Note: Note:
Founders could allocate 3 votes. Percentages indicate how Source: Founders could allocate 3 votes. Percentages indicate how Source:
many founders would like to startup in each respective city. many founders would like to startup in each respective city.
“ I only invest in B2B software companies, and those can really come
from anywhere. That has also been proven in Europe with category
defining companies emerging from beyond the tier-1/2 cities. You
You need to look beyond need to look beyond the established startup hubs to find the really
interesting opportunities.”
the established startup
hubs to find the really Teddie Wardi
Insight Venture Partners
interesting opportunities.
Office space is one of the largest line items on the P&L for most tech companies,
and picking the right office environment and location is an important decision for
founder to get right.O For
ce founders
space is one of the
that arelargest line items
prepared on thethere
to move, P&L for
ismost
moretech companies and picking the right o ce
choice
environment and location is an important decision to get right for founders. For founders that are prepared to
than ever. The wide variation of the cost of office space in different cities is just
move, there is more choice than ever. The wide variation of the cost of o ce space in different cities is just one
one factor to consider, though
factor not necessarily
to consider, a primary
though not necessarily one. one.
a primary
Source:
There are huge potential cost benefits by placing offices in locations outside the primary
hub, though the differences vary by country. In the U.K. and France, founders choosing to
build outside of London and Paris stand to benefit from hugely reduced fees on the relative
cost of office space. In Germany, on the other hand, the difference in the costs of office
space outside Berlin is far less pronounced.
e metre per Paris (Ile-de-France) Cost of prime rent ($ per square metre per$995 Frankfurt am Main $562
selected year) for o ce space by city in selected
Marseille countries,
$375 2Q 2018
Munich $520
DATASE T : G E RM A N Y
Lyon $351
L E G E ND Berlin $443
year) Nice $269 Prime Rent ($ per square metre per year)
Hamburg $379
Toulouse $258
Dusseldorf $379
Lille $258
are metre per Madrid Cost of prime rent ($ per square metre per$453 London (Central) $1,496
are metre per London (Central) $1,496
n selected year) for o ce space by city in selected
in selected
countries, 2Q 2018
Barcelona $344 Manchester $513
Manchester $513
DATASE T : U N I T ED K I N G DO M
Malaga L E$169
G E ND Edinburgh $485
Edinburgh $485
er year) Prime Rent ($ per square metre per year)
er year)
Zaragoza $158 Birmingham $470
Birmingham $470
There are huge potential cost bene�ts by locating o�ces in locations outside the primary hub, tho
Valencia
Glasgow
$152
$463 differences vary by country.
Glasgow
In the UK and Paris,
$463
founders choosing to build outside of London and
bene�t from hugely reduced fees on the relative cost of o�ce space. In Germany, on the other han
Palma de Mallorca
Bristol
$140
$463 difference in the costs Bristol
of o�ce space outside $463
Berlin is far less pronounced.
0 100 200 300 400 500 0 250 500 750 1,000 1,250 1,500
0 250 500 750 1,000 1,250 1,500
Prime Rent ($ per square metre per year) Prime Rent ($ per square metre per year)
Prime Rent ($ per square metre per year) Cost of prime rent ($ per square metre per London (Central)
year) for o ce space by city in selected
countries, 2Q 2018
Source: Source: Manchester $513
Source:
DATAS E T : U N I T E D K I N G DO M
L E G E ND Edinburgh $485
Prime Rent ($ per square metre per year)
Birmingham $470
Europe’s leading hubs have many advantages, but OFFICE SPACE COSTS BY CITY
Glasgow $463
they’re also far more expensive to build from
2.7x
Difference
Bristol in cost per square$463
metre of
prime office space in Paris (Ile-de-Fance)
compared to0 in Marseille,
250
the500next most 750 1,000 1,250
Prime Rent ($ per square metre per year)
expensive French city
Source:
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
European
in them suggests that tech has
countries huge
such asupside
Italy, ifPoland
it can unlock the potential
or Spain of its
still have latent
large talent pools.
potential to The size of the developer
pools in comparison to relative level of historical capital invested in them suggests that countries such as Italy,
punch at a greater weight in the European tech ecosystem.
Poland or Spain still have large potential to punch at a greater weight in the European tech ecosystem.
# of professional developers
750,000
France
500,000
Russia
Italy Spain
250,000
Ukraine Sweden
Romania
0
-5,000 0 5,000 10,000 15,000 20,000 25,000 30,000
Capital invested ($M)
Note:
Chart only includes countries with greater than 50,000 Source:
professional developers in 2018.
There are giant talent hubs that offer huge potential if the local pool can be mobilised
in the same way as in cities such as Berlin, Helsinki and Stockholm. Examples of these
large talent clustersThere
thatare giant
have talent
not yethubs that offer
produced huge potential
companies if the
that havelocal pool can
raised be mobilised
large sums ofin the same way that has
been in achieved in cities such as Berlin, Helsinki and Stockholm. Examples of these large talent clusters that have
capital investment not
include Cologne, Kiev and Vienna.
yet produced companies that have raised large sums of capital investment include Cologne, Kiev and Vienna.
400,000
Scatter of cities based on size of London
professional developer talent pool and
capital invested ($M) (2013 to 9M 2018)
300,000
# of professional developers
Paris
Amsterdam
200,000
Cologne
Frankfurt am Main
Berlin
100,000 Brussels
Stockholm
Budapest
0
-5,000 0 5,000 10,000 15,000 20,000 25,000
Capital invested ($M)
Note:
Investment amounts are based on capital invested in the city in Source:
aggregate between 2012 and September 2018.
This emergence of growing and more engaged tech communities in new parts of
This emergence of growing and more engaged tech communities in new parts of the region is re ected too in the
the region is reflected too in the list of Top 10 fastest-growing tech hubs, ranked by
list of Top 10 fastest-growing tech hubs, ranked by year-on-year growth in active members of tech-related Meetup
year-on-year growth in
groups.active members of tech-related Meetup groups.
0 20 40 60 80 100
% YoY growth
Note:
2018 annualised based on active members to end of September Source:
2018
As new hubs continue to proliferate across Europe, the region's leading investors are increasingly backing
founders from these locations. In the past 12 months, founders building companies in as diverse a set of cities as
Lille, St Gallen and Warsaw have all raised funding from leading European VCs.
As new hubs continue to proliferate across Europe, Selected investments in new tech hubs
the region’s leading investors are increasingly Country Company Lead Investor Round Type Round Size ($M)
Selected investments in new tech hubs
backing founders from these locations. In the past 12 Brussels Belgium Cowboy Tiger Global Series A 12
months, founders building companies in as diverse Edinburgh UK Care Sourcer ADV Series A 11
a set of cities as Lille, St Gallen and Warsaw have all Gothenburg Sweden NA-KD Partech Series B 45
raised funding from leading European VCs. Lille France OpenIO Partech Series A 5
Source:
There is a wide variation in the average software engineer salary both across countries
and even within them. According to Glassdoor, software engineers have the highest
Therewhich
median salary in Berlin, is a wide variationthe
reflects in the average
fact software
that Berlin hasengineer salary both acrosslow
a disproportionately countries and even within them.
According to Glassdoor, software engineers have the highest median salary in Berlin, which re ects the fact that it
density of local professional developers compared to other cities, but a large number
has a disproportionately low density of local professional developers compared to other cities, but a large number
of well-capitalised of
VC-backed companies
well-capitalised VC-backed that are chasing
companies talent.
that are chasing talent.
Vienna $51,500
Paris $49,750
Cambridge $46,000
Helsinki $44,500
Barcelona $40,250
Madrid $36,750
Milan $36,750
Lisbon $31,500
Rome $29,750
Prague $25,000
Warsaw $24,250
Note:
Rounded to nearest $250. Data pulled from Glassdoor on 24 Source: Glassdoor
October 2018. Glassdoor
The huge spread in the cost of software SOFTWARE ENGINEER SALARIES BY CITY
engineering talent across European cities is driving
2.4x
talent mobility and higher distribution of company Difference in the median base salary of
building. a software engineer in Berlin compared
to Warsaw
Glassdoor
ARTICLES
University of Oxford
Country
United Kingdom
computer science universities in the
computer world,
science and their including
global rank
4 ETH Zurich Switzerland
5 of the Top 10. Europe is, in short, a factory for 5 University of Cambridge United Kingdom
producing world-class computer science talent. 9 Imperial College London United Kingdom
10 EPF Switzerland
50 KU Leuven Belgium
Note:
4 of the world's top 10 and 31 of the world's topTimes
100Higher Education World University Rankings
Compiled by the Times Higher Education Supplement and
Source:
universities in engineering and technology are2018
gathered by CERN.
located in
Looking beyond just computer
Europescience, Europe
Europe’s universities among global top 100 in
engineering and technology and their global rank
is home to 31 of the world’s top 100 universities in
University Country
engineering and technology. These
Europe's 31 universities
universities among global top 100 in 3 University of Oxford United Kingdom
are distributed across 11 different
engineeringcountries
rank
and
and technology and 29
their global
5 University of Cambridge United Kingdom
different cities and reflect the fact that European 9 ETH Zurich Switzerland
STEM talent is inherently spread across the region 10 Imperial College London United Kingdom
driven by the strong academic institutions that 14 École Polytechnique Fédérale de Lausanne Switzerland
exist in all corners of the region. There are, in short, 18 Delft University of Technology Netherlands
37 KU Leuven Belgium
94 TU Dresden Germany
Note:
'Rank' refers to position in global list of top 100 institutions for
Times
TimesHigher
Higher Education
Education World University Rankings
Source: World University Rankings 2018
engineering and technology quali cations. Compiled by the 2018
Times Higher Education Supplement and gathered by CERN.
“ For the past decade or so, European VCs have been cheerfully ignoring the academic and
scientific communities. That’s because they have been making great returns from internet
and mobile platforms, and have developed superb domain experience and expertise in these
For the past decade or areas. Besides, making money out of science is very hard, and there are significant barriers
to entry. But, to quote Bob Dylan, the times they are a changin’... First, the “easy” money
so, European VCs have from Web 2.0 is less obvious as this platform has reached maturity. Second, the many great
been cheerfully ignoring challenges facing the world will require deep tech (or rather deep science) solutions. Third, the
convergence of tech, AI, Genomics, etc. creating new “internet” type opportunities will create
the academic and the next Googles and Amazons. Fourth, the desire for impact. A new generation of scientists,
VCs, philanthropists, and entrepreneurs want to make the world a better place, not just get
scientific communities... rich. They aren’t interested in the next app for drone delivered pizzas. Fifth, universities are
But, to quote Bob Dylan, under pressure to engage with VCs and to enable the channelling of their research into the
outside world. And finally, VCs can bring money, but more importantly their talent, to combine
the times they are a with deep tech/science so this channel becomes REAL”
changin’...
Dave Norwood
Oxford Sciences Innovation
USA 1,351,903
Note:
A researcher is a professional in conception or creation of Source: Eurostat
knowledge, products, processes, methods, systems & Eurostat
management of these projects. # of researchers in full-time
There are more than 1.8 million scientists and engineers across Europe, specialising in every eld. Germany and
equivalent (FTE). Data sourced from Eurostat and gathered by
CERN. Data for 2014.
the UK are the two largest homes to the European research community by far, with more than 300,000 in each
There are more than
There 1.8 million
are more
respective scientists
than
country. 1.8 and
Italy,engineers
million
France, Poland andacross
scientists allEurope,
also havespecialising
and engineers
Spain in specialising
across communities
sizeable Europe, of scientistsin every
and eld. German
engineers.
every field. Germany
the UK and
areare
There
themore
UK are
twothan the
largest two
1.8 million
largest
homes homes
to the
scientists
to the European
European
and research
engineers across
research
community
Europe, specialisingbyinfar,
everywith
eld.more than
Germany and300,000 in e
community byrespective
far, with
the UKmore
are than
country.
the two 300,000
France,
largest in
homeseach
Italy,to respective
Poland
the and
European country.
Spain
researchall France,
also have
community Italy,
by Poland
sizeable
far, with communities
more than 300,000of scientists
in each and en
# of scientists and engineers by country
and Spain all also have sizeable
respective communities
country. France, Italy, ofPoland
scientists andall
and Spain engineers.
also have sizeable communities of scientists and engineers.
LEG END
1,000,000 to 1,500,000
500,000 to 1,000,000
upto 500,000
500,000 to 1,000,000
upto 500,000
Note:
Scientists and engineers refer to persons with scienti c or Source: Eurostat
technological training who are engaged in professional work on
science and technology. Data is sourced from Eurostat and
gathered by CERN. Latest data is 2017.
Note:
Scientists and engineers refer to persons with scienti c or Source: Eurostat
technological training who are engaged in professional work on
science and technology. Data is sourced from Eurostat and
gathered by CERN. Latest data is 2017.
84 In Partnership with & www.thestateofeuropeantech.com
Note:
Scientists and engineers refer to persons with scienti c or Source: Eurostat
06.1 Mobilising Europe’s R&D talent pool
“ Europe is in the early days of tapping its R&D talent pool. There
are still barriers here with regards to tech transfer and IP, access
to funding to scale capital-intensive, research-based businesses,
and to some degree, a perception barrier around the feasibility
of ‘commercially-driven,’ non-academic careers. However, this is
changing. The good news is that Europe has some of the world’s
leading research centers, and the talent coming out of these
Irina Haivas centers has increasing entrepreneurial ambitions. The trend is
Atomico clearly upward.”
Looking at the clusters of scientists and engineers relative to the overall population size of different coun
highest density
Looking communities can be found
at the clusters of scientists in the relative
and engineers Nordics and
to the Switzerland.
overall population size of different countries, the
The Nordics have the highest
highest
Looking density
density
at the ofofresearchers
communities
clusters can be and
scientists per
found in capita.
the Nordics
engineers and
relative to Switzerland.
the overall population size of different countries, the
highest density communities can be found in the Nordics and Switzerland.
Share of scientists and engineers
Share of scientists in total
and engineers in total
population population
Share of scientists and engineers in total
population
LEG END
LEGE ND upto 4.50
LEG END
upto 4.50 3.50 to 4.00
upto 4.50
3.50 to 4.00 3.00 to 3.50
3.50 to 4.00
2.50 to 3.00
3.00 to 3.50 3.00 to 3.50
2.00 to 2.50
2.50 to 3.00
2.50 to 3.00 1.50 to 2.00
2.00 to 2.50
2.00 to 2.50 1.00 to 1.50
1.50 to 2.00
0.50 to 1.00
1.50 to 2.00 1.00 to 1.50
upto 0.50
0.50 to 1.00
1.00 to 1.50
upto 0.50
0.50 to 1.00
upto 0.50
Note: Eurostat
Scientists and engineers refer to persons with scienti c or
technological training who are engaged in professional work on
Note:
science and
Scientists technology.
and engineersData
referistosourced
personsfrom
withEurostat
scienti cand
or
gathered by CERN.
technological Latest
training whodata is 2017. in professional work on
are engaged
science and technology. Data is sourced from Eurostat and
gathered by CERN. Latest data is 2017. Source: Eurostat
Source: Eurostat
Note:
Source: Eurostat
The openness and the sharing of
Scientists and engineers refer to persons with scienti c or
technological training who are engaged in professional work on
“ CERN’s natural environment is about collaboration and openness.
By pooling together resources, brainpower and complementary
information is something, I presume,
science and technology. Data is sourced from Eurostat and
gathered by CERN. Latest data is 2017. expertise, CERN creates unique value that opens new doors for all.
The result is more than the sum of what its Member States could
tech companies will have to do more create nationally, and so the benefit is more than a financial one. For
this to work, CERN collaborates with a large number of partners and I
of in the future and hopefully they can believe this is something start-ups can learn from.
learn from CERN in that regard.
CERN has developed a collaborative model of working which is very
special and its governance has proven it is capable of extraordinary
advances in science and technology since its creation in 1954. The
Large Hadron Collider and the discovery of the Higgs boson are
Giovanni Anelli concrete examples that highlight the success of this international
European Organization for Nuclear collaboration. The openness and the sharing of information is
Research (CERN) something, I presume, tech companies will have to do more of in the
future and hopefully they can learn from CERN in that regard.”
2m
largely untapped. Total researchers in
Europe
Eurostat
Europe 18,070
China 9,089
Note:
'Count' refers to a fractional count that takes into account the
percentage of authors from that institution/country and the
number of a liated institutions per paper. Data sourced via
Nature Index and gathered by CERN.
But it is not just quantity, but also the quality of research that originates
from Europe. The European research community leads the world by share of
publications in the top 10% most cited, though China is gaining ground at an
impressive rate.
The European Union produces the most publications in the
top 10% ranked by citings, but China is catching up fast
L EG E ND 30%
China
12%
33%
EU-28
32%
Note:
A fractional count takes into account the percentage of
authors from that institution/country and the number of
a liated institutions per paper. Data sourced via European
Commission Directorate-General for Research and Innovation
and gathered by CERN.
Eurostat
Note:
A fractional count that takes into account the percentage of Source: Eurostat
authors from that institution/country and the number of
Note:
a liated institutions
A fractional count thatper paper.
takes intoData is forthe
account 2017. Data sourced
percentage of Source: Eurostat
via Nature
authors fromIndex
thatand gathered by CERN.
institution/country and the number of
a liated institutions per paper. Data is for 2017. Data sourced
via Nature Index and gathered by CERN.
Eventhe
Even though though
largestthe largestincountries
countries Europe publish in Europe publish
the most the the
papers, most papers,
share of the share of publications in the top
Note:
most
publications incited
thecount
A fractional
top reveals
Even 10%
thatthough
most athe
takes into wider
cited thegroup
largest
account
reveals of
countries
percentage of countries
a wider group
in Europe contributing
publish
Source: of countries strongly
contributing
the most papers,
Eurostat to European
the share research.
of publications in the top European
10% resea
strongly talent
toauthors
European Even though
research. the largest
European countries
researchofincountries
Europe
talentpublish the most
is inherently papers,
to the
distributed. share
As of publications in theresearch
top 10%
is
from inherently
most
that distributed.
cited reveals
institution/country
mostper cited reveals
andathe
wider
number As
of tech
group
adistributed.
wider
and research
contributing collide
stronglyfurther,
European this will
research.likely only
European further drive the al
willgroup Asofonly
countries contributing
thestrongly
further,tothis
European research. European research
a liated institutions
tech andrich
research talent
collide ispaper. Data is for
inherently
further, this
2017. Data sourced
likely tech and research
further drivecollide already richwill likely
level ofonly further drive the already
level
via Nature of
Index andgeographic
talent
rich
gathered by CERN.
is inherently
level of geographic
diversity
distributed.
diversity
that
Asthat characterises
tech and researchthe
characterises
the
collide European
further,
European tech
tech
thisecosystem. ecosystem.
will likely only further drive the already
geographic diversity that
rich levelcharacterises
of geographic diversity the European tech ecosystem.
that characterises the European tech ecosystem.
Share of publications
Share of publications in the topin the top most
10% 10% most
Sharepublications
cited of publications in the top 10% most
cited publications
cited publications
LEG END
LEG END
upto 15.0
L EG END upto 15.0
13.0 to 14.0
upto 15.0 13.0 to 14.0
12.0 to 13.0
12.0 to 13.0
13.0 to 14.0 11.0 to 12.0
11.0 to 12.0
10.0 to 11.0
12.0 to 13.0 10.0 to 11.0
9.0 to 10.0
11.0 to 12.0 9.0 to 10.0
8.0 to 9.0
8.0 to 9.0
10.0 to 11.0 6.0 to 8.0
6.0 to 8.0
4.0 to 6.0
9.0 to 10.0 4.0 to 6.0
3.0 to 4.0
8.0 to 9.0 3.0 to 4.0
upto 3.0
upto 3.0
6.0 to 8.0
4.0 to 6.0
3.0 to 4.0 Eurostat
Note:
The European tech
A fractional ecosystem
count is the
takes into account underpinned
percentage of by a WORLD-CLASS TECHNICAL UNIVERSITIES
authors from that institution/country and the number of
supply of world-class academic talent
31%
a liated institutions per paper. Data is for 2014, the most
recent available. Data sourced via European Commission RIO of the world’s Top 100 engineering
and gathered by CERN. and technology universities globally
are European.
Eurostat
Netherlands 611 93
Spain 338
Finland 313
Belgium 294
Austria 288
Ireland
Ireland 236
236 39
39
Capital
Capitalinvested
invested($M)
($M)in
inEuropean
Europeandeep
deeptech
tech
companies
companiesby
Note:
bycountry
country Italy
Italy 192
192 83
83
2018
DATAS
DATASbased
EETTon 9 months
:: CO
CO NTRRIto
UUNT IEESeptember
SS 111-
1-20 2018 Rand
20 AND
AND projection
REEST
ST OOFF for Norway
Norway 170
170 40
40
Q4
EU2018
EU RROOPPbased
EE on Q3 2018.
Cyprus
Cyprus 56
56 151
151
LLEG
EGEEND
ND
Russia
Russia 114
114 44
44
2013-2017
2013-2017
Denmark
Denmark 71
71 87
87
2018
2018
Portugal
Portugal 57
57 41
41
Poland
Poland 62
62 00
Romania
Romania 60
60 00
Estonia
Estonia 50
50 00
Rest
Restof
ofEurope
Europe 149
149 44
00 50
50 100
100 150
150 200
200 250
250 300
300
Capital
Capitalinvested
invested($M)
($M)
Note:
Note:
2018
2018based
basedon
on99months
monthstotoSeptember
September2018
2018and
andprojection
projectionfor
for Source:
Source:
Q4
Q42018
2018based
basedon
onQ3
Q32018.
2018.
The level of capital invested into European deep tech companies exceeded $5B again in 2018 across more than 800
deals. This investment encompasses both companies that are working on solving core technology problems, as
well as those companies that are applying deep technology to seek to transform a range of target industries.
3.2
800.0
# of deals 3.0
# of deals
615.0 2.4
600.0
2.0
1.6
1.0 400.0
0.7
0.0 200.0
2013 2014 2015 2016 2017 2018
Note:
2018 based on 9M to September 2018 and projection for Q4 2018 Source:
based on Q3 2018.
Note:
Note:
Some of the numbers converted from EUR to USD with an FX Source: Some of the numbers converted from EUR to USD with an FX Source:
rate of 1.13, the rate on 14 November 2018.
rate of 1.13, the rate on 14 November 2018.
“ Going forward, I can see more R&D based start-ups coming out
of European universities, building off multidisciplinary teams of
scientists and engineers and tackling some of the large challenges of
our century like sustainability and health. These businesses will likely
be global from day one. Europe will then need to make sure to keep
(and fund) this talent here, by creating the right incentives for the eco-
system and adapting to the different requirements these businesses
Irina Haivas have in terms of funding and milestone expectations, new business
Atomico models and talent.”
Arti cial Intelligence continues to dominate the deep tech Arti cial Intelligence continues to dominate the deep
landscape in terms of capital invested. landscape in terms of capital invested.
Artificial Intelligence continues to dominate the Capital invested ($M) by deep tech sub-category
Artificial Intelligence 234 582 1,086 1,382 2,306 1,965
deep tech landscape in terms
Capital of capital
invested ($M) by invested.
deep tech sub- Hardware 408 376 Capital invested ($M)
1,197 1,674 by deep943
tech sub- 1,282
Artificial Intelligence
Hardware
category Internet of Things 62 223 555 837 677 684
category Internet of Things
Blockchain 45 133 66 171 223 651
Blockchain
3D 100 111 282 325 264 610
Big data 146 317 455 358 516 452 3D
Robotics 10 35 94 187 243 368 Big data
Search 96 441 458 575 328 299 Robotics
Virtual reality 7 32 160 304 652 244 Search
Computer vision 23 3 106 115 107 237 Virtual reality
Developer tools 78 156 97 142 668 205 Computer vision
Semiconductors 154 78 162 159 159 183 Developer tools
Nanotech 23 13 101 182 49 145 Semiconductors
Predictive analytics 16 353 274 273 156 120 Nanotech
Drones 7 3 70 75 29 112 Predictive analytics
Deep learning 19 31 89 63 196 71 Drones
Speech & Hearing 23 71 2 37 35 14
Deep learning
Radar 9 21 5 19 13 0
Speech & Hearing
2013 2014 2015 2016 2017 2018 Radar
Note:
Hardware includes hardware manufacturing. 2018 based on 9
Source:
months to September 2018 and projection for Q4 2018 based on Note:
Q3 2018. Hardware includes hardware manufacturing. 2018 based on 9
Source:
months to September 2018 and projection for Q4 2018 based on
Q3 2018.
Throughout history, Europe’s been known for its innovations and even
today, top research projects are led by European teams, so let’s make
sure this remains the case in the coming years.
“ Europe is home to the largest share of top 100 AI research institutions
globally in addition to being home to half of the top computer
science institutions. Throughout history, Europe’s been known for
its innovations and even today, top research projects are led by
European teams, so let’s make sure this remains the case in the
coming years.”
Rasmus Ekholhm
Slush
ARTICLES
There is clear evidence of a strong desire from within Europe to build bridges between the
There is,
tech and policy spheres. A however,
majorityclear evidence ofinvestors
of founders, a strong desire
andfrom within Europe
policymakers to build
agree bridges between the tech and
that
policy spheres. A majority of founders, investors and policymakers agree that there should be stronger ties
there should be stronger
between ties between
European techEuropean tech startups/scaleups
startups/scapeups and governments and governments.
LEG END
Agree
Neither agree nor disagree
Venture capitalist
Disagree
0 20 40 60 80 100
% of respondents
Source:
Only 24% of total respondents believe that regulation has had a negative impact on the
Founder or
European tech industry in the past 12 months. This startup/scale-up
varies,
employee
however, by occupation and
Only 24% of total respondents believe that regulation has had a negative impact on the European tech industry in
region. Respondents from France are most positive on the impact of regulation, while
the
Onlypast
24%12of
months. This varies, however,
total respondents by occupation
believe that regulation has andhad
region. Respondents
a negative impactfrom France
on the are most
European techpositive
industry in
founders skew slightly
on
thethe
more
impact
past
negative
12 months.
thanwhile
of regulation, positive,
This varies, however,
but
Founders by
only
skew by a fraction.
slightly
occupation
Investor more negative
and region. than positive,
Respondents but France
from only by are
a fraction.
most positive
on the impact of regulation, while Founders skew slightly more negative than positive, but only by a fraction.
Note:
Company
Whatsize: Founder respondents only.in Europe had on
impact has regulation DATASET:
Policymaker ALL
or RESPONDENTS
the European tech industry in the last 12 public sector employee
What impact has regulation in Europe had on
months? All respondents
the European tech industry in the last 12
months? All respondents
Other
L EG END 0 10 20 30 40 50 60 70 80 90 100
Positive % of respondents
L EGEND 0 10 20 30 40 50 60 70 80 90 100
Neutral 0 20 40 60 80 100
OnlyOnly
24%24% of total
of total
Positive
Negative
respondents
respondents believe
believe thatthat regulation
regulation hashas
hadhad a negative
a negative impact
impact
% on on thethe
of respondents European
European
% of respondents tech
tech industry
industry in in
the the
pastpast 12 months.
12 months.
Neutral
ThisThis varies,
varies, however,
however, by occupation
by occupation andand region.
region. Respondents
Respondents from from France
France areare most
most positive
positive
on Negative
on the the impact
impact of regulation,
of regulation, whilewhile Founders
Founders
Source: skew slightly more negative than positive, but only by a fraction.
skew slightly more negative than positive, but only by a fraction.
DATASET: SUBREGION
Source:
Source:
Eastern Europe
Investor
Southern Europe
Other
UK & Ireland
0 20 40 60 80 100
Only
Only 24%24% of total
of total respondents
respondents believe
believe that
that regulation
0
regulation hashas
hadhad
20 a negative
a negative
40 impact on60
impact on
% ofthe the European
European
respondents
80 tech industry
tech industry in in
100
% of respondents
the past 12 months. This varies, however, by occupation and region. Respondents from France
the past 12 months. This varies, however, by occupation and region. Respondents from France are most positive are most positive
on on
thethe impact
impact of regulation,
of regulation, while
while Founders
Founders skewskew
Source:
slightly
slightly moremore negative
negative thanthan positive,
positive, butbut only
only by abyfraction.
a fraction.
DATASET: OCCUPATION
Source:
Founder or
Founder or
startup/scale-up
startup/scale-up
employee
employee
Investor<=10
Note:
Company size: Founder respondents only.
Note:
Company size: Founder respondents only.
Policymaker or
11-100
public sector employee
100+
Other
0 10 20 30 40 50 60 70 80 90 100
0 20 40 60 80 100
% of respondents
% of respondents
Source:
Source:
Six months after the implementation of GDPR, Founders across Europe view data protection and privacy as the
Six months after the implementation
most challenging area of GDPR, Founders
of regulation across Europe view data
for their business.
Six months after the implementation of GDPR, Founders across Europe view data protection and privacy as the
protection and privacy as the most challenging area of regulation
most challenging area of regulation for their business.
for their business.
UK & Ireland 35 13 10 5 6 4 3 2 3 1 17
Which one area of regulation do you view as
most challenging for your company in 2018? Southern
UK & Europe
Ireland 25
35 17
13 15
10 11
5 9
6 2
4 3
3 8
2 2
3 13 6
17
Which one area of regulation do you view as
most challenging for your company in 2018?
L E G E ND SouthernNordics
Europe 22
25 16
17 10
15 11
11 8
9 5
2 4
3 4
8 3
2 2
3 15
6
cy
ht
ts
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en
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io
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o
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oy
5 to 10
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ht
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tio
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ec
ns
No
ot
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pr
ta
Da
Note: Source:
Founder respondents only
Note: Source:
Founder respondents only
There’s a clear split in opinion within the industry on the question of whether
There's a clear split in opinion within the industry on the question of whether European regulators act with the
European regulators act with
interests
the startups
of tech
interests of tech
in mind.
startups
Founders,
in mind. Founders,
mostonnotably, are inclined to be European
sceptical of the motivations
There's a clear split in opinion within the industry the question of whether regulators act withofthe
most notably, are inclined
European
interests
There's
to be sceptical
regulators,
of tech
a clear startups
split
of the
especially
in mind.
in opinion within
motivations
those
thefrom
Founders,the
most
industry
ofthe
DACH European
region
onnotably, are inclined
question to be sceptical
of whether Europeanofregulators
the motivations ofthe
act with
regulators, especially those
European
interests fromstartups
tech theespecially
ofregulators, DACH region.
those
in mind. from the
Founders, DACH
most regionare inclined to be sceptical of the motivations of
notably,
European regulators, especially those from
Where relevant, do you believe that European
the DACH region
Central Europe & Baltics 47% 53%
regulators act with the interests of tech DATASET: SUBREGION
Where relevant, do you believe that European Central Europe & Baltics 47% 53%
startups inact
regulators mind?
with the interests of tech DACH 35% 65%
Where relevant, do you believe that European Central Europe & Baltics 47% 53%
startups
DATASE T:inSUB
mind?
RE GION DACH 35% 65%
regulators act with the interests of tech Eastern Europe 54% 46%
startups
DATASE
LEGE ND in
T: mind?
SUB RE GION DACH 35% 65%
Eastern Europe 54% 46%
YesND S UBR EGION
DATASET:
LEGE France & Benelux 53% 47%
No Eastern Europe 54% 46%
Yes France & Benelux 53% 47%
LEGEND
No Nordics 47% 53%
Yes France & Benelux 53% 47%
Nordics 47% 53%
No Southern Europe 45% 55%
Nordics 47% 53%
Southern Europe 45% 55%
UK & Ireland 43% 57%
Southern Europe 45% 55%
UK & Ireland 43% 57%
0 20 40 60 80 100
DATASET: OCCUPATION
Source:
DATAS E T : O C C UPAT I O N
Employee at a private company that is
46% 54%
not a tech startup/scale-up
L E G E ND
Yes Employee at a private tech startup or
47% 53%
scale-up
No
Employee at a publicly listed non-tech
55% 45%
company
0 20 40 60 80 100
% of respondents
Source:
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
This willingness to build bridges is important since key stakeholders in the European tech ecosystem take a
start and scale a technology
majority viewbusiness in the
that European region. makes it harder to start and scale a technology business in the region
regulation
LEGEND
Agree
Neither agree nor disagree
Venture capitalist
Disagree
0 20 40 60 80 100
% of respondents
Source:
Unsurprisingly then, Founders also believe they feel more of the0 regulatory
Source:
20
burden
40
in Europe 60
% of respondents
than established
80 100
tech
companies. Of course, if you ask those that work at public tech companies, they are more likely to say the
Source:
opposite.
DATASET: SUBREGIONS
Source:
Do you think the regulatory burden in Europe Central Europe & Baltics
is more felt by tech startups or established
tech companies? DACH
Southern Europe
UK & Ireland
0 20 40 60 80 100
% of respondents
Source:
60 %
for European consumers of all respondents agree that GDPR
has been a good thing for European
consumers, including 54% of European
founders that are in agreement.
The European tech industry’s sentiment around the impact of GDPR is more balanced
than might be expected. Founders
The European techare more likely
industry's to agree
sentiment aroundit’s
thehad a negative
impact of GDPR is impact on
more balanced than might be expected.
their company thanThe
The
European
disagree,
Founders arebut
European
tech
more
tech
industry's
not by
likely a
to
industry's
sentiment
large
agree margin.
it's
sentimenthad around
a the impact
Counter-intuitively,
negative
around the impact
impact
of
on
of
GDPR
their
GDPR
is more balanced
perhaps,
company
is more
than might
than disagree,
balanced than butbe
might
be expected.
not by a large
expected.
Founders
margin. are more likely to
Counter-intuitively, agree it's
perhaps, had a negative
founders of impact
larger on their
companies company
(100+ than disagree,
employees) are but
more not
likely by a largeit's
founders of larger companies
Founders
margin.
(100+ employees)
are more likely to agree
Counter-intuitively,
are
perhaps,
more
it's had likely
a negative
founders of
to agree
impact
larger
it’s had a
on their company
companies than disagree,
(100+ employees) not bytoa agree
but likely
are more
to large it's
agree
negative impact thanhad a negative
founders impact
of than
smaller founders of smaller tech companies
margin.
had a negative impact thantech
Counter-intuitively, companies.
perhaps,
founders founders
of smalleroftech
larger companies (100+ employees) are more likely to agree it's
companies
had a negative impact than founders of smaller tech companies
GDPR has had a negative impact on my
DATASET: ALL RESPONDENTS
GDPR has had a negative impact on my
company
GDPR has had a negative impact on my
company
DATAS ET : AL L R E SP O NDE N TS
company All respondents
DATAS ET : AL L R E SP O NDE N TS All respondents
DATAS
LE G ENDET : AL L R ESP O ND ENTS All respondents
LE G END
Agree
L EGEND
Agree
Neither
Agree agree nor disagree 0 10 20 30 40 50 60 70 80 90 100
Neither agree nor disagree
The European tech industry's sentiment around the00 impact
Disagree
Neither agree nor disagree 10 of GDPR
10
20
20
is
30 more
30
40 balanced
40 % of 50
50
60
than
60 might
70
70 be
80
80 expected.
90
90
100
100
Disagree respondents
Founders are more likely to agree it's had a negative impact on their company% than
Disagree disagree,
of respondents but not by a large
% of respondents
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
Source: tech companies
DATASET: OCCUPATION
Source:
Source:
Founder
Media/Journalist
Other investor
Policymaker/regulator
Student
Venture capitalist
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 0their company
20 than
40 disagree, 60 but not
80 by a large
100
margin. Counter-intuitively, perhaps, founders of larger companies (100+ employees) are more likely to agree it's
% of respondents
L EGEND
Agree
Neither agree nor disagree 11-100
Disagree
100+
0 10 20 30 40 50 60 70 80 90 100
% of respondents
Note: Source:
In company sizes only founders' responses included
Importantly, however, there is a very strong majority agreement across the board
from all stakeholderImportantly,
types that however, therebeen
GDPR has is a very strong
a good majority
thing for agreement
Europeanacross the board from all stakeholder types that
consumers.
GDPR has been a goodthere
thing is
fora European consumers. One mightacross
say, therefore,
Importantly,
One might say, therefore, thathowever,
any perceived very strong
negative majorityfor
impact agreement
companies a boardthat
isthe any
from allperceived negative
stakeholder types that
impact forbeen
GDPR has companies
a goodis a justi
thing able cost of
for European scaling more
consumers. Oneethically
might say, therefore, that any perceived negative
justifiable cost of scaling morehowever,
Importantly, ethically.
there is a very strong majority agreement across the board from all stakeholder types that
impact for companies is a justi able cost of scaling more ethically
GDPR has been a good thing for European consumers. One might say, therefore, that any perceived negative
impact for
GDPR has companies
been a good thingis
foraEuropean
justi able cost of scaling more ethically
consumers DATASET: ALL RESPONDENTS
GDPR has been a good thing for European
consumers
DATASE T: ALL RESP ONDENTS
GDPR has been a good thing for European
DATASE
LEGE NDT: ALL RESP ONDENTS
consumers
Agree
LEGE ND
DATASE T: ALL RE SPONDE NTS
Neither
Agree agree nor disagree All respondents
LEGE ND
Disagree
Neither agree nor disagree All respondents
Agree
Disagree
Neither agree nor disagree All respondents
Disagree
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
GDPR has been a good thing for European consumers. One might say, therefore, that any perceived negative
Source:
impact for companies is a justi able cost of scaling more ethically
DATASET: SUBREGIONS
Source:
GDPR has been a good thing for European Central Europe & Baltics
consumers
DACH
DATASE T: SUB REGIONS
Disagree
Nordics
Southern Europe
UK & Ireland
Founder
Media/Journalist
Other investor
Policymaker/regulator
Student
Venture capitalist
0 20 40 60 80 100
% of respondents
Source:
LEG END
Agree
Venture capitalist
Neither agree nor disagree
Disagree
0 20 40 60 80 100
% of respondents
Source:
The
The policy agenda in The
Europepolicy
policy agenda
agenda
around in Europe
in technology
Europe around
around technology
technology
has been has been
has been
dominated by data
dominated
dominated by data
by data privacy
privacy and content
and content copyright
copyright forpast
for the the past
privacy and contenttwo
copyright
years.
for the past two years.
two years.
Number of mentions
Number of keyof
of mentions tech-related
key tech-related Data privacy/
DataGDPR
privacy/ GDPR 121 121 86 86
issues in European
issues Parliament
in European legislative
Parliament legislative
documents by topic
documents per year
by topic per year Content &Content
copyright 29
& copyright 2937 37
LEG END
L EG END Artificial Intelligence 15
Artificial Intelligence 2415 24
FY 2017FY 2017
2018*
2018* Brexit 17 11
Brexit 17 11
Fintech 15 11
Fintech 15 11
Digital health 7
Digital health 7
Blockchain/cryptocurrencies 6
Blockchain/cryptocurrencies 6
Autonomous vehicles 3
Autonomous vehicles 3
Drones 8
Drones 8
Digital tax 2
Digital tax 2
Quantum computing 1
Quantum computing 1
0 50 100 150 200
0 50
Number of legislative 100containing issue 150
documents keywords 200
Number of legislative documents containing issue keywords
Note:
This data looks at the number of citations of keywords related
Note:
to a number of selected
This data looks attechnology-related issuesof
the number of citations in keywords
European relatedSource:
Parliament legislation, where legislation equals documentation
to a number of selected technology-related issues in European Source:
related to the ongoing process of law making, actual bills, etc
Parliament legislation, where legislation equals documentation
related to the ongoing process of law making, actual bills, etc
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.
In the UK, in particular, it's revealing to look at the relative level of discussion of key tech issues in UK government
Brexit, unsurprisingly, has swamped everything else.
legislative documents, activities and press releases. Brexit, unsurprisingly, has swamped everything else.
LEGEND
Artificial Intelligence
Activities
Press Releases
Blockchain/cryptocurrencies
Legislation
Drones
Fintech
Autonomous vehicles
Digital health
Quantum computing
Digital tax
Note:
This data looks at the number of citations of keywords related
to a number of selected technology-related issues in UK Source:
government legislation, activities and press releases.
There's
Note: a clear growth in focus on Arti cial Intelligence in European
Legislation = the ongoing process of lawmaking, actual bills, 0
Parliament
10
legislative
20
documents,
# of legislative documents containing issue keywords
30
but in other
40
key
Note: emerging
procedures. technology
Activities = the elds,
questions and speeches madesuch
by asSource:
quantum computing or autonomous
# of legislativevehicles, there
documents containing iskeywords
issue more 'activity' and
Legislation
the elected =legislators.
the ongoing process
Press of lawmaking,
Releases actual bills,
= the commentary and
'cresponse
ommentary'
procedures.
Note: from Activities = than
the various actual
theagencies
questions
andand legislation
speeches
other movingmade
partsby of Source:
the elected legislators.
government. Press Releases = the commentary and
Legislation = the ongoing process of lawmaking, actual bills, DATASET: ACTIVITIES
response fromActivities
procedures. the various agencies
= the and and
questions other moving parts
speeches madeof by Source:
government.
the elected legislators. Press Releases = the commentary and
# of mentions
response of key
from the various tech-related
agencies issues
and other moving in of
parts Blockchain/cryptocurrencies 13 50
European Parliament legislation, activities
government.
There's a clear growth in focus on Arti cial Intelligence in European Parliament legislative documents, but in other
key emerging technology elds, such as quantum CRISPR & computing
Genetic editing 1or autonomous vehicles, there is more 'activity' and
There's a clear
# of mentions growth
of key in focus
tech-related issuesonin Arti cial Intelligence in European
Artificial Intelligence 0 1015 Parliament
20 30legislative
40 24 documents,
50 60 but 70in other
key emerging
European technology
Parliament elds, such as quantum computing or autonomous
legislation, activities # of legislativevehicles, there
documents containing iskeywords
issue more 'activity' and
'cand
ommentary'
press releases
Note: than actual
by topic legislation
per year
Drones 8 3
Legislation = the ongoing process of lawmaking, actual bills,
DATASET: L EGISL ATION DATASET: PRESS RELEASES
procedures. Activities = the questions and speeches made by Source:
the elected legislators. Press Releases = the commentary and
LEG END from the various agencies and other moving parts of Blockchain/cryptocurrencies 4 6
# of mentions of key tech-related issues in
response Artificial Intelligence 24 75
government.
2017
European Parliament legislation, activities
and
2018press releases by topic per year Autonomous vehicles 3 3
Blockchain/cryptocurrencies 18 35
DATASET: P RES S R ELEAS ES
0 10 20 30 40
Quantum computing 3 # of legislative documents containing issue keywords
Note:
Legislation = the ongoing process of lawmaking, actual bills, CRISPR & Genetic editing 0
procedures. Activities = the questions and speeches made by Source:
the elected legislators. Press Releases = the commentary and
response from the various agencies and other moving parts of 0 20 40 60 80 100
government. # of legislative documents containing issue keywords
Note:
Legislation = the ongoing process of lawmaking, actual bills,
procedures. Activities = the questions and speeches made by Source:
the elected legislators. Press Releases = the commentary and
response from the various agencies and other moving parts of
government.
The legislative process in key European countries has been dominated by data
privacy, content copyright and Brexit with much less discussion related to other
The legislative process in key European countries has been dominated by data privacy, content copyright and
key new technology fields. In Germany, in particular, the issues of data privacy and
Brexit with much less discussion related to other key new technology elds. In Germany, in particular, the issues of
content copyright have been top
data privacy of mindcopyright
and content for German policymakers.
have been top of mind for German policymakers.
Brexit
LEGEND
France
Artificial Intelligence
Germany
UK
Drones
Digital tax
Blockchain/cryptocurrencies
Quantum computing
Autonomous vehicles
Digital health
Fintech
0 10 20 30 40 50 60
Number of legislative documents containing issue keywords
Note:
This data looks at the number of citations of keywords related
to a number of selected technology-related issues in French, Source:
German and UK government legislation, activities and press
releases.
launched initiatives. List of government AI initiatives in Europe Finland AI Strategy Dec 2017
Source:
The larger the size of a company’s employee base, the more that founders care about
The larger the size of a company's employee base, the more that founders care about regulatory changes related to
regulatory changes related
hiring to hiring
exibility flexibility
and stock optionsand stock options.
LE G E ND
Tax
Regulatory Support for Startups 11-100
EU Harmonization
Stock Option
0 10 20 30 40 50 60 70 80 90 100
Deregulation
% of respondents
Note:
Founder respondents only. Based on respondents that gave Source:
explicit responses only
The goal for policymakers should be to use the tools at their disposal
to tackle fragmentation and reduce the cost and bureaucracy
associated with starting and scaling businesses in Europe.
“ The goal for policymakers should be to use the tools at their disposal
to tackle fragmentation and reduce the cost and bureaucracy
associated with starting and scaling businesses in Europe. However,
as we look towards the next EU Commission and new legislative
proposals which may follow, regulators need to better understand
the impact of the changes they propose and find new ways to engage
with founders at very early stages, many of whom are understandably
Linda Griffin unfamiliar with the world of policy. Equally European tech companies
King (of all sizes) need to engage in policy discussions if they are interested
in long-term growth.”
ARTICLES
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
The European tech ecosystem will once again see a record level of capital investment in 2018. Total investment is
invested in 2017 andprojected
now 4.4x up$23B,
to hit compared to the
comfortably levels ofthe
exceeding investment from
$19.6B invested in 2013.
2017 and now 4.4x up compared to the levels of
investment from 2013.
LEG END
20.0 19.6
Capital invested ($B) 3,000.0
# of deals 2,728.0
# of deals
14.0
2,500.0
10.0
8.6
2,000.0
5.2
5.0
0.0 1,500.0
Note: 2013 2014 2015 2016 2017 2018
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
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’ For
meansadditional context
that the finalontotals
annualare
capital
notinvestment intoathe
known until European tech ecosystem, it is important to
significant
understand there is a material trend in effect that means that many rounds are only captured with a signi cant
time period has elapsed after the end of the year in question. As such, we have
delay (see note). This 'reporting lag' means that the nal totals are not known until a signi cant time period has
indicatively adjustedelapsedannual
the totals
after the end ofto account
the for thisAs
year in question. reporting lag to
such, we have enable aadjusted the annual totals to account
indicatively
like-for-like comparison
for thisof overalllag
reporting investment trends at the
to enable a like-for-like European
comparison level.investment trends at the European level.
of overall
30
Capital invested ($B), annual, 2013-2018,
adjusted for reporting lag effect
25 $3B
LEG END
Capital invested per year ($B)
15 $B
$B
$23B
10 $20B
$B
$14B $15B
5 $B
$9B
$5B
0
Note: 2013 2014 2015 2016 2017 2018
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.
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
For additional
are only captured with context
a significant on the
delay annual
(see note).number
Thisof deals in thelag’
‘reporting European
meanstech
thatecosystem,
the final it is important to
totals are not known understand there is a material
until a significant trend inhas
time period effect that means
elapsed aftermany
the rounds
end ofare
theonly
yearcaptured
in 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
question. As such, we have indicatively adjusted the annual totals to account for this reporting
after the end of the year in question. As such, we have indicatively adjusted the annual totals to account for this
lag to enable a like-for-like
reporting comparison
lag to enable a of overall investment
like-for-like comparison oftrends
overall at the European
investment level.
trends at the European level.
LEGEND
# of deals
Adjusted for reporting lag
3,350 3,220
2,728 2,609
2,174
1,712
Note:
The reporting lag is the difference between the date of a 2013 2014 2015 2016 2017 2018
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.
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
In 2013, $1B of capital invested per quarter in Europe was the norm, but as the ecosystem has evolved that bar has
now seen more than $3 billion invested per quarter for 15 consecutive quarters and
consistently been raised higher. Europe has now seen more than $3B invested per quarter for 15 consecutive
even $5 billion per quarter
quarters for
and the
evenpast 6 straight
$5B per quarters.
quarter for the past 6 straight quarters.
1,215.0
Capital invested ($B) and # of deals per 1,159.0 6.4
1,200.0
quarter 6.0
1,063.0 1,073.0
5.4
5.3
5.1 5.0 5.1
LEGEND
1,000.0
Capital invested ($B)
# of deals
# of deals 4.0
3.4 3.4
3.3 3.2
759.0 800.0
2.9
2.5
646.0 2.2 638.0
2.0
2.0 1.6 1.7
600.0
1.2 1.2 1.1
0.0 400.0
20 Q1
20 Q2
20 Q3
20 4
20 Q1
20 Q2
20 Q3
20 4
20 Q1
20 Q2
20 Q3
20 4
20 Q1
20 Q2
20 Q3
20 4
20 Q1
20 Q2
20 Q3
20 4
20 Q1
20 Q2
Q3
Q
Q
13
14
15
16
17
18
13
14
15
16
13
17
14
18
15
16
13
17
14
18
15
16
17
20
Of course, the exact quarterly investment amounts per quarter are subject to ups and
downs so it is helpful to look at trailing 12-month totals to get a sense for the ‘smoothed’
long-term investmentOf course,
trendstheinexact quarterlyOn
the region. investment amounts
this basis, per quarter
the overall are subject
trajectory to ups and downs so it is helpful to look
of the
at trailing 12-month totals to get a sense for the 'smoothed' long-term investment trends in the region. On this
European tech ecosystem since late 2013 is very clear.
basis, the overall trajectory of the European tech ecosystem since late 2013 is very clear.
25.0
4,576.0
Trailing 12-month capital invested ($B) and # 4,445.0 22.0 22.2
of deals by quarter 4,224.0 20.7 4,500.0
20.0 19.6
3,925.0 18.0 3,930.0
LEGEND 4,000.0
15.9
Capital invested ($B)
# of deals 13.1
11.9 3,500.0
10.2
10.0
8.3 8.6 3,000.0
7.1
5.8
5.2
5.0
2,500.0
0.0 2,000.0
20 4
20 Q1
20 2
20 3
Q4
20 1
20 2
20 3
Q4
20 1
20 2
20 3
20 4
20 1
20 2
20 3
20 4
20 1
20 2
Q3
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
14
15
16
17
18
14
15
16
17
14
18
15
16
13
17
14
18
15
16
17
20
20
20
Sentiment within the European tech ecosystem around the capital raising environment
is broadly positive. 72% of European founders and 84% of European investors believe
Sentiment
that it has either stayed within the
the same European
or has becometecheasier
ecosystem around
to raise VCthe
incapital
Europe raising environment
in the past is broadly positive. 72% of
European
12 months. This is very founders
similar and 84% of
to responses European
from investors
2017’s survey,believe
wherethattheit equivalent
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
responses were 73% of founders and 83% of VCs.
equivalent responses were 73% of founders and 83% of VCs.
LEGEND
Founders
Easier to raise capital
The capital environment remains unchanged
Harder to raise capital
0 10 20 30 40 50 60 70 80 90 100
% of respondents
Note:
Founder respondents only.
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
DACH region shows the largest gap between founders and
more mixed view from founders in the UK, DACH and Eastern Europe.
investors in how they perceive the fundraising environment
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 Investors Founders Investors Founders Founders Founders Founders Investors Founders Investors
Central Europe DACH Eastern Europe France & Nordics Southern UK & Ireland
& Baltics Benelux Europe
Founders remain upbeat about the environment for RAISING CAPITAL IN EUROPE
raising capital in Europe
2018 has again set a new record for total capital CAPITAL INVESTMENT IN EUROPE
invested in the European tech ecosystem
23B
Projected total capital investment in
European tech in 2018, up 4.3x since 2013
Europe has seen a 7x increase in the number of large rounds of $50M+, growing to 70
rounds in 2018 fromOnly
justthe
10smallest
in 2013.rounds have seen a slight decrease in both capital invested and number of deals, which indicates
that round sizes are increasing
0
2013 2014 2015 2016 2017 2018
Only the smallest rounds have seen a slight decrease in both capital invested and number of deals, which indicates
that round sizes are increasing
DATASET: # OF DEALS
2,500
Capital invested ($M) and # of deals by round 2,208
size
1,890 1,922
DATAS E T : # O F D E A LS 2,000
Capital invested ($M) / # of deals
L EG E ND
1,540
Round size $0-2M 1,430
1,500
Round size $2-5M 1,267
Note:
2018 based on 9M to September 2018 and projection for Q4
Note:
2018 based on Q3 2018
2018 annualised based on data to September 2018.
On a cumulative basis since 2013, the UK has attracted $26 billion in total capital
investments, just under 2x as much
On a cumulative assince
basis Germany, which
2013, the ranks
UK has second
attracted $26Bwith $13.6
in total billion.
capital investments, just under 2x as much as
Those two countries, together
Germany with France,
that ranks account
second with $13.6B. for almost
Those 60% of total
two countries, capital
together with France, account for almost 60% of
invested in Europe total
since capital invested
the start in Europe since the start of 2013.
of 2013.
DATASET: TOP 10 COUNTRIES
Capital invested ($M) by country, cumulative
(2013 - 9M 2018) United Kingdom $25,976M
LEG END Germany $13,588M
Cumulative capital invested ($M) 2013 - 9M 2018
France $11,302M
Sweden $5,683M
Spain $3,818M
Netherlands $2,952M
Switzerland $2,463M
Russia $2,263M
Ireland $1,741M
Finland $1,534M
On a cumulative basis since 2013, the UK has attracted $26B in total capital investments, just under 2x as much as
0 5,000 10,000 15,000 20,000 25,000
Germany that ranks second with $13.6B. Those two countries, together withCapital
France, account for almost 60% of
invested ($M)
total capital invested in Europe since the start of 2013.
DATASET: COUNTRY 11-20
Capital invested ($M) by country, cumulative
Denmark $1,158M
(2013 - 9M 2018)
Belgium $857M
DATASET: COUNTR IES 1 1-20
Italy $772M
LEG END
Cumulative capital invested ($M) 2013 - 9M 2018 Austria $748M
Luxembourg $734M
Norway $711M
Portugal $585M
Poland $472M
On a cumulative basis since 2013, the UK has attracted $26B in total capital investments, just under 2x as much as
Iceland $417M
Germany that ranks second with $13.6B. Those two countries, together with France, account for almost 60% of
Estonia $358M
total capital invested in Europe since the start of 2013.
0 200 400 600 800 1,000 1,200
Capital invested ($M)
Greece $248M
Malta $160M
Lithuania $125M
Romania $98M
Bulgaria $83M
Ukraine $56M
Latvia $44M
Slovenia $27M
Slovakia $12M
Serbia $5M
Albania $3M
The UK, France and Germany dominate stories about European investment levels
given the multibillion-dollar scale of capital investments into these countries, but
digging beneath the surface, there is an important trend emerging whereby many
other European countries are now hitting their stride and are also on trajectories to
consistently surpass $1 billion+ in annualThecapital
The UK, France and Germany dominate stories about European investmentUK,
levels
France
investment.
givenand
theGermany
multi-billion
dominate
scale of
stories about European investment levels given the multi-billion scale of
capital investments into these countries, but digging beneath the surface,
capital
there
investments
is an important
into these
trendcountries,
emerging but digging beneath the surface, there is an important trend emerging
whereby many other European countries are now hitting their stride andwhereby
also onmany
trajectories
other European
to consistently
countries are now hitting their stride and also on trajectories to consistently
surpass $1B+Capital
in annual capital investment.
invested ($M) DATASET: UNITED KINGDOM surpass $1B+ in annual capital investment. DATASET: GERMANY
by country per year
Capital invested ($M) by country per year 8,000 Capital invested ($M) by country per year
$7,404M $4,036M
$7,168M 4,000
DATASE T : U N I TE D K ING DOM DATAS E T : G ERM AN Y
L EG E ND L E GE ND
6,000
United Kingdom Germany $2,990M
3,000
Capital invested ($M)
2,000 $930M
1,000
$1,437M
The UK, France and Germany dominate stories0about European investment The UK, levels
France
givenand theGermany
multi-billion dominatescale of
stories0 about European investment levels given the multi-billion scale of
2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018
capital investments into these countries, but digging beneath the surface, capitalthere
investments
is an important into these
trendcountries,
emerging but digging beneath the surface, there is an important trend emerging
whereby
Note: many other European countries are now hitting their stride and
2018 based on 9M to September 2018 and projection for Q4 2017
whereby
also
Note:
2018
on
based on
many
trajectories
9M to
other2018European
September
to
and
consistently
projection
countries
for Q4 2017
are now hitting their stride and also on trajectories to consistently
Source: Source:
surpass
based on Q3$1B+
2018. in annual capital investment. DATASET: FRANCE surpass
based on Q3$1B+
2018. in annual capital investment. DATASET: SWEDEN
Capital invested ($M) by country per year 4,000 Capital invested ($M) by country per year
$3,774M $1,501M
1,500
DATASE T : F R A NC E DATAS E T : SWEDEN
L EG E ND L E GE ND $1,232M
France 3,000 Sweden $1,124M
Capital invested ($M)
2,000
$1,688M
$638M
Note:
2018 based on 9M to September 500
2018 and projection for Q4 2018 1,000 $941M $396M
based on Q3 2018
$619M
0 0
2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018
Note: Note:
2018 based on 9M to September 2018 and projection for Q4 2017 Source: 2018 based on 9M to September 2018 and projection for Q4 2017 Source:
based on Q3 2018. based on Q3 2018.
Italy, Norway and Switzerland have seen the significant expansion of deal volume in 2018,
as investment activity in these relatively less mature countries continues to grow. The
overall top 5 countries in Europe by total number of deals in 2018 remains the same as in
2017 with the UK, followed by France, Germany, Sweden and the Netherlands.
Italy, Norway and Switzerland have seen the signi cant expansion of dealItaly,
volume
Norwayin 2018,
and Switzerland
as investment
haveactivity
seen the
in signi cant expansion of deal volume in 2018, as investment activity in
these relatively less mature countries continues to grow. The overall top
these
5 countries
relatively
inless
Europe
mature
by total
countries
numbercontinues
of to grow. The overall top 5 countries in Europe by total number of
deals in 2018#remains
of dealsthe
bysame as in 2017 DATASET:
country with the UK, followed
UNITED by France,
KINGDOM dealsGermany,
in 2018 remains
Swedenthe andsame
the Netherlands.
as in 2017 DATASET:
with the UK, followed by France, Germany, Sweden and the Netherlands.
GERMANY
per year
1,000
# of deals by country per year # of deals by country per year
895 887 884 500 495
DATASE T : U N I TE D K ING DOM DATAS E T : GER MA NY
821 453
429
L EG E ND L E GE ND 730
750
400
United Kingdom Germany 371
613
# of deals
# of deals
297
300 278
500
200
250
100
0 0
2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018
Italy, Norway and Switzerland have seen the signi cant expansion of deal Italy,
volume
Norway in 2018,
and Switzerland
as investment haveactivity
seen the
in signi cant expansion of deal volume in 2018, as investment activity in
these
Note: relatively less mature countries continues to grow. The overall top
2018 based on 9M to September 2018 and projection for Q4 2018
these
5 countries
Note: relatively inless
Europemature by total
countries
number
2018 based on 9M to September 2018 and projection for Q4 2018
continues
of to grow. The overall top 5 countries in Europe by total number of
Source: Source:
deals inQ32018
based on 2018. remains the same as in 2017 DATASET: with the UK, followed by France,
FRANCE dealsGermany,
based inQ32018
on 2018. remains
Swedenthe andsamethe Netherlands.
as in 2017 DATASET:
with the UK, followed by France, Germany, Sweden and the Netherlands.
SWEDEN
L EG E ND 600 L E GE ND
535 400
France Sweden
# of deals
# of deals
400 300
362 273 270
Note: 275
200
2018 based on 9M to September 171
2018 and projection for Q4 2018 199
200
based on Q3 2018 102
100
0 0
2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018
Note: Note:
2018 based on 9M to September 2018 and projection for Q4 2018 Source: 2018 based on 9M to September 2018 and projection for Q4 2018 Source:
based on Q3 2018. based on Q3 2018.
The diversification of European tech is reflected at the city level too, as exemplified
The
by increased capital diversi�cation
invested into aof European
new tech is of
generation re�ected
citiesat theare
that city not
leveltypically
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
considered among Hamburg,
Europe’sMilan
mostand
active
Oslo.
tech hubs, such as Hamburg, Milan and Oslo.
Note: Source:
2018 annualised based on data to September 2018.
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
This trend is also re�ected in data showing deal volume by city, where the rise in investment activities in new
been significant in 2018.
generation tech hubs like Milan and Oslo has been signi�cant in 2018.
Note: Source:
2018 annualised based on data to September 2018.
33%
LEG END 31% 31%
30
2013 - 2015
European VCs
27%
2016 - 9M 2018
21% 21%
20%
20 19%
17%
13%
10
0
<$2M $2M-$5M $5M-$10M $10M-$20M $20M-$50M $50M+
Source:
Fintech remained the single largest vertical for CAPITAL INVESTMENT BY INDUSTRY
capital investment in Europe in 2018
5
projected total capital investment into
European fintech companies in 2018
$ B
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
There is a high
for enterprise applications, levelhealth
digital of industry
anddiversity in terms ofall
transportation, where capitalare
of which is being invested
on track to bein the European tech
ecosystem at scale. The dominant industries in 2018 are ntech, software for enterprise applications, digital health
in excess of $2.5 billion in total capital invested in 2018. Beyond those four industries, there
and transportation, all of which are on track for in excess of $2.5B in total capital invested in 2018. Beyond those
are a further four industries thatthere
four industries, will all
aresurpass
a further $1billion in capital
ve industries that willinvested
all surpassthis
$1Byear.
in capital invested this year.
Fintech $4,222M
$936M $1,011M
$822M
1,000
There is a high level of industry diversity in terms of$552M
where capital
$465M is being invested in the European tech
ecosystem at scale. The dominant industries in 2018 are ntech, software for enterprise applications, digital health
$172M
Fashion $989M
$955M
1,000 $883M
$867M
$801M
$701M
750
$571M $554M
500 $431M
$345M $346M
$266M
There is a high level of industry diversity in terms
250 of where capital is being invested in the European tech
$204M
ecosystem at scale. The dominant industries in 2018 are ntech, software for enterprise applications, digital health
and transportation, all of which are on track for0 in excess
2013
of $2.5B
2014
in total capital invested
2015 2016
in 2018.
2017
Beyond
2018
those
four industries, there are a further ve industries that will all surpass $1B in capital invested this year.
LEG END DATASET: CAPITAL INVESTED $500M-$1B IN 2018
Travel
$1,570M
Food
1,500 $1,390M
Internet of Things
Education
Gaming
Capital invested ($M)
$1,027M
Real estate $975M
1,000 $873M
$795M
$728M $755M
$691M $662M
$516M $516M
500 $437M $409M
$397M
$347M
$300M
$251M $262M
There is a high level of industry diversity in terms of$181M
where capital
$195M is being invested in the European tech
ecosystem at scale. The dominant industries in 2018$17M are ntech, software for enterprise applications, digital health
and transportation, all of which are on track for0 in excess of $2.5B in total capital invested in 2018. Beyond those
2013 2014 2015 2016 2017 2018
four industries, there are a further ve industries that will all surpass $1B in capital invested this year.
LEG END DATASET: CAPITAL INVESTED $250M-$500M IN 2018
Music 1,000 $943M
Robotics
HR & Recruitment
Construction 750 $687M
$638M
Capital invested ($M)
Semiconductors $633M
Security
$484M $493M
Telecom 500 $432M
$389M $387M
$365M $352M
$292M $312M
$272M $275M
$250M
250 $197M $178M $189M
$124M
$100M $84M
$64M
$22M $34M
$11M
0
2013 2014 2015 2016 2017 2018
Note:
2018 based on 9M to September 2018 and projection for
Q4 2018 based on Q3 2018.
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,
One of the most critical ways in which the European tech ecosystem has evolved has been the build out of the
sophistication. Oneinvestor
way tobase
demonstrate the remarkable expansion of the investor base
supporting it, which has grown in depth and, importantly, sophistication. One way to demonstrate
is to look at the number of uniqueexpansion
the remarkable institutional
of the investors that
investor base is tohave
look made at least
at the number ofone
unique institutional investors that have
investment in European tech
made at per
least oneyear. In 2018,
investment this reached
in European more
tech per than
year. 2,500
In 2018, thisunique
reached more than 2,500 unique institutions,
institutions, up 2.8xupsince 20132013
2.8x since
151
One of the most critical ways in which the European tech ecosystem has evolved has been the build out of the 117
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 0
2013 2014 2015 2016 2017 2018
1,000 905
500
Note:
Number of unique investors (incl. investment funds, 0
Note:
corporate investors & accelerators, but excl. angel 2013 2014 2015 2016 2017 2018
Number of unique
investors) thatinvestors (incl. investment
have participated funds,
in at least corporate
1 investment
investors
round&peraccelerators, but excl. angel
year. 2018 annualised investors)
based on datathat
to have
participated
September in at2018.
least 1 investment round per year. 2018
annualised based on data to September 2018. Source:
It’s important to note, however, that more capital and more investors alone are not enough. In
order to maximise the chancestoofnote,
It's important success forthat
however, early-stage European
more capital startups,alone
and more investors it’s important
are not enough. In order to maximise
that capital is allocated to sophisticated investors best able to support young companies
the chances of success for early-stage European startups, it's important that capital is allocated to sophisticated
as they navigate the scalingbest
investors journey.
able toThis is proven
support in data. Startups
young companies raising
as they navigate theSeed from
scaling top This is proven in data.
journey.
investors are significantly
Startups more
raisinglikely to raise
Seed from a Seriesare
top investors A.signi cantly more likely to raise a Series A.
40%
Median conversion rates to Series A within 36 40
Conversion rate from Seed to Series A (%)
LEG END 30
13%
10
7%
Note:
0
Based on disclosed Seed and Series A rounds, conversion Top quartile Second quartile Third quartile Bottom quartile
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/ Source:
European banks are clearly leading the charge as the most active and
frequent corporate investors in the European tech ecosystem with many
having built
European substantial
banks tech company
are clearly leading the charge portfolios
as the most in Europe
active and frequent corporate investors in the
European tech ecosystem with many having built substantial tech company portfolios in Europe
Country CIty # of rounds in the last 12M Portfolio size in Europe Portfolio % in Europe
Top 10 most active corporate investors in BNP Paribas France Paris 28 85 81
European tech
ZKB - Zürcher Kantonalbank Switzerland Zurich 20 42 98
Source:
Corporate investors are very active in the European CORPORATE INVESTMENT ACTIVITY
tech ecosystem
681
unique corporate investors have invested
in at least one investment round in Europe
in 2018, up more than 3x from 220 in 2013
The growth in the investor base has been supported by a diverse set of
new entrants that are
Thedeploying capital
growth in the inbase
investor European
has beentech for thebyfirst
supported a diverse set of new entrants that are deploying capital in
European
time. As in other regions, tech for the
corporate rst time.have
investors As in other
becomeregions, corporate
active in investors have become active in Europe in
Europe in significantly cantly greater
signigreater numbers.numbers. In 2018, more than 680 unique corporates participated in at least one investment in
Europe, up 3.1x from 220 in 2013.
600
LEGEND 510
441
# of unique corporate investors
# of deals 400 387
265
220
200
0
Note: 2013 2014 2015 2016 2017 2018
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
Source:
on data to September 2018.
# of unique investors
212
# of unique US investors
200
153
100
0
2013 2014 2015 2016 2017 2018
Note:
Number of unique investors (incl. investment funds, corporate
Source:
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.
LEG END
# of deals
62 63
58
49 49
Note:
Based on investment rounds in Europe led by a selection of 22
Source:
leading US VC funds. 2018 annualised based on data to
September 2018.
152
Capital invested ($M) by # of deals involving 4,000 3,815 150
Asian investors
127
3,323
LEG END 125
3,000
Capital invested ($M)
Capital invested ($M)
# of deals 89 100
# of deals
83
2,000 75
55 1,536
1,117 50
1,000 27 816
25
165
0 0
2013 2014 2015 2016 2017 2018
Note: Source:
2018 annualised based on data to September 2018
Asian investors are starting to deploy large sums of ASIAN INVESTMENT ACTIVITY IN EUROPE
capital into European tech startups
23X
Increase in total investment into European
tech companies via rounds involving Asian
investors over the past 5 years, from less
than $200million in 2013 to a projected $3.8
billion in 2018
The rapid growth in investor interest in Europe from Asia has been underpinned by a
large expansion of capital invested in Europe from China. Chinese investors will have
The rapid
participated in rounds growth
totalling in investor
more than $1interest
billioninin
Europe from Asia has
commitments tobeen underpinned
European tech by a huge expansion of capital
invested in Europe from China. Chinese investors are on track to surpass more than $1B in commitments to
companies in 2018 for the first time, a more than 10x increase since 2013.
European tech companies in 2018 for the rst time, a more than 10x increase since 2013.
750 21
# of deals
# of deals
20
500
12
363
10
6 248
250
90 76
0 0
2013 2014 2015 2016 2017 2018 forecast
Note: Source:
Forecast created by Dealroom.co
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 fundsVCs
European raised
are onintrack
the region.
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.
0
2013 2014 2015 2016 2017 H1 2018*
European VCs are on track for a third consecutive year of raising more than $8 billion and have raised more than
$40 billion since 2013. Larger funds (>€100 million) account for a growing share of total funds raised in the region.
DATASET: FUNDS CLOSED
200
VC funds raised ($B) and # of VC funds
closed per year by fund size (€M)
DATASET: FU ND S CLOSED
Funds raised ($B) / # of funds closed
150
LEGEND
<€25M
€25-50M
€50-100M 100
€100-250M
€250M+
50
Note: 0
Number of unique investors (incl. investment funds, 2013 2014 2015 2016 2017 H1 2018*
corporate investors & accelerators, but excl. angel
Note:
investors) that have participated in at least 1 investment
Total
roundfunds raised
per year. are annualised
2018 displayed in USD,
basedbut
onthe grouping
data to of
funds by fund2018.
September size is based on EUR. Taken from the European Source:
Data Collective, developed by Invest Europe. EDC data
converted at EUR:USD of 1.1605, the rate on 30 Sep 2018. H1
2018 preliminary.
First-time VC funds have raised $10 billion across more than 250 funds since 2013, but
First-time VC funds
follow-on funds, unsurprisingly, have raised
account $10overwhelming
for the billion across more than 250(>75%)
majority funds since 2013, but follow-on funds,
of total
unsurprisingly, account for the overwhelming majority (>75%) of total funds raised by VCs in Europe. The data for
funds raised by VCsthe
in Europe.
rst half ofThe
2018data fora decline
shows the first half funds
in total of 2018 shows
raised a decline
by First-Time VCinfunds
totalcompared to the comparative
funds raised by First-Time VC funds compared
totals for 2017 and 2016. to the comparative totals for 2017 and 2016.
Follow-on VC Fund
5.0
First-time VC funds have raised $10 billion across more than 250 funds since 2013, but follow-on funds,
2.5
unsurprisingly, account for the overwhelming majority (>75%) of total funds raised by VCs in Europe. The data for
the rst half of 2018 shows a decline in total funds raised by First-Time VC funds compared to the comparative
totals for 2017 and 2016. 0.0
2013 2014 2015 2016 2017 H1 2018*
LEGEND 150.0
First-Time VC Fund
First-Time VC Fund of Established Firm
Follow-on VC Fund 100.0
50.0
0.0
Note: 2013 2014 2015 2016 2017 H1 2018*
Taken from the European Data Collective, developed by
Invest
Note: Europe. EDC data converted at EUR:USD of 1.1605,
the rate
Taken on 30
from theSep 2018. H1
European 2018
Data data preliminary
Collective, developedand
by Invest
subject
Europe. to change.
EDC data converted at EUR:USD of 1.1605, the rate on Source:
30 Sep 2018. H1 2018 data preliminary and subject to change.
The European investor base continues to be bolstered by the launch of new first-time
funds, often The
founded by investors
European investorwith strong
base existing
continues totrack records,by
be bolstered such
theas Stride.VC
launch of newand rst-time funds, often founded b
The European investor base continues to be bolstered by the launch of new rst-time funds, often founded by
Five Seasonsinvestors
Ventures.
with with
investors strong existing
strong existingtrack records,
track records, such
such as Stride.VC
as Stride.VC and
and Five Five Seasons
Seasons Ventures Ventures
Fund sizeFund
($M) size Country
($M) Announced/Launched
Country Announced/Launched
Selecte Selecte rst-time fund launches in Europe
rst-time fund launches in Europe Corviglia Capital Fund
Corviglia Capital Fund
250
250
Luxembourg 4Q 2018
Luxembourg 4Q 2018
since Q4 2017
since Q4 2017 Trust Esport 11 France 4Q 2018
Trust Esport 11 France 4Q 2018
Norselab 10 Norway 4Q 2018
Norselab 10 Norway 4Q 2018
Imec.xpand 131 Belgium 3Q 2018
Imec.xpand
Raise Ventures 67 131 France Belgium
3Q 2018 3Q 2018
Slingshot Ventures
Raise Ventures 64 67 Netherlands France
3Q 2018 3Q 2018
Indaco Venture Partners 146 Italy 2Q 2018
Slingshot Ventures 64 Netherlands 3Q 2018
Stride.VC 64 UK 2Q 2018
Indaco Venture Partners 146 Italy 2Q 2018
Ring Capital 170 France 1Q 2018
Stride.VC
Maki.vc 78 64 Helsinki UK 1Q 2018 2Q 2018
Ring
Five Capital
Seasons Ventures 67 170 France France
1Q 2018 1Q 2018
Luminar Ventures 56 Sweden 1Q 2018
Maki.vc 78 Helsinki 1Q 2018
Brighteye Ventures 56 France 4Q 2017
Five Seasons Ventures 67 France 1Q 2018
Market One Capital 40 Poland 4Q 2017
Luminar Ventures 56 Sweden 1Q 2018
Brighteye Ventures
Source: 56 France 4Q 2017
Source:
The rise of a new generation of funds is positive for founders, but is also delivering
returns to investors. The European Investment Fund’s data shows that emerging
managers, definedThe rise of a newfrom
as managers generation
Fundof funds is positive
I through foraccount
Fund III, founders,for
butais also delivering returns to investors. The
European Investment Fund's data shows that emerging managers, de ned as managers from Fund I through Fund
significant proportion of the best-performing funds in their portfolio.
III, account for a signi cant proportion of the best-performing funds in their portfolio.
LEG END
IRR, Emerging
TVPI, Emerging
IRR, Established
TVPI, Established
Note:
Data relates to EIF-backed European ICT funds only. Emerging
funds are de ned as any fund between Fund I and III. Data as of Source:
31 March 2018.
The level of VC funds raised on a per capita basis per country varies widely
across Europe and serves to highlight those places that are tracking beneath the
European average. The VCslevel of VC funds
in Spain raisedmost
and Italy, on a per capita basis
notably, haveper country
raised varies widely across Europe and serves to highlight
significantly
those places that are tracking beneath the European average. VCs in Spain and Italy, most notably, have raised
less in total funds since 2013 compared to the European average.
signi cantly less in total funds since 2013 compared to the European average.
LEGEND $222
$204
Funds raised per capita (2013-1H 2018) 200
$184
Funds raised per capita ($)
European average
$158
150
$119 $117
$101
100 $93
$72 $72 $72 $72 $72 $72 $80 $72
$48
50
0
s
ay
nd
ce
en
nd
n
an
nd
an
ai
do
rw
an
la
ed
la
Sp
rm
la
nl
er
Ire
ng
No
Fr
Sw
er
Fi
Ge
itz
Ki
th
Sw
d
Ne
ite
The level of VC funds raised on a per capita basis per country varies widely across Europe and serves to highlight
Un
those places that are tracking beneath the European average. VCs in Spain and Italy, most notably, have raised
signi cantly less in total funds since 2013 DATASET:
compared 11-20
to the European average.
$72 $72 $72 $72 $72 $72 $72 $72 $72 $72 $72 $72 $72
VC funds raised per capita by country of GP 75
by year
DATASET: 1 1-2 0
Funds raised per capita ($)
LEG END 50
$45
Funds raised per capita (2013-1H 2018) $41
$39
European average
$32
25 $24 $23
$11
$9
$6 $5 $4
$2 $0
0
k
ria
ly
cs
ic
nd
ia
ce
al
ia
e
ar
ar
in
Ita
ug
ar
an
bl
iu
lti
ee
la
st
ra
ng
nm
pu
lg
lg
m
rt
Po
Ba
Au
Gr
Uk
Be
Bu
Hu
Note:
Po
Re
Ro
De
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
As the European
initial cheques, to follow on more VC ecosystem has
meaningfully andmatured,
also tothere
buildhas been
more a clear trend
diversified of increasing fund sizes to better
portfolios.
capitalise European fund managers and enable them to write larger initial cheques, to follow on more meaningfully
This trend continued in 2018 and has seen the median VC fund size increase to $100 million,
and also to build more diversi ed portfolios. This trend continued in 2018 and has seen the median VC fund size
doubling from $51 million
increaseinto2017
$100and up more
million, than
doubling 3x$51
from from $29inmillion
million inup
2017 and 2013.
more than 3x from $29 million in 2013.
$129M
Median and mean fund size ($M) at nal 125
$114M
closing by year
$100M $100M
DATASET: A LL VC FUND S
100
LEGE ND $82M
25
0
2013 2014 2015 2016 2017 H1 2018*
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.
Source:
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
Themeaningful
companies by writing small size of European VC funds has
growth cheques. generally
This been viewed
challenge as a hurdle
of sub-scale for the European ecosystem due to the
funds
perceived inability of European VCs to support companies by writing meaningful growth cheques. This challenge
has started to change in the region’s largest countries, but it’s clear fund sizes remain
of sub-scale funds has started to change in the region's largest countries, but it's clear fund sizes remain small in
small in many sub-regions across Europe
many sub-regions across Europe.
$102M
Median and mean fund size at nal closing by UK & Ireland
$161M
year by sub-region
$85M
DACH
$130M
LEG END
$34M
Median France & Benelux
$63M
Mean $32M
Southern Europe
$49M
$20M
Nordics
$73M
$20M
Central & Eastern Europe
$31M
$45M
Europe
$89M
80.0 $75.5B
Funds raised by fund type per year $71.8B
LEG END
60.0
Buyout Funds
$51.1B
VC Funds
Fund raised ($B)
$42.3B
40.0 $38.3B $37.5B
20.0
$9.5B $8.9B
$5.7B $6.9B
$4.4B $4.7B
0.0
Note: 2013 2014 2015 2016 2017 H1 2018
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.
Source:
“ Invest Europe has worked long and hard to tackle the issue of scale
in European venture capital. The pan-European fund of funds
Steady growth in 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
fundraising will be more be immediate - steady growth in fundraising will be more sustainable
for investors and fund managers alike.”
sustainable for investors
and fund managers alike. Michael Collins
Invest Europe
Banks 5.1%
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.
Private individuals Only
& family offices have contributed $5B to European VC since 2013.
government agencies have invested more in European VC in that same period.
LEG END
VC funds ($B) Private individuals & Family offices 20%
0 5 10 15 20 25
% of total funds committed 2013-2017
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.
European VC has been transformed in the past decade and is, as a result, not only now
performing well,The
butpoor
is also highlyperformance
historical competitive on a forward-looking
of European VC relative to UScomparison
VC and also toagainst
European Private Equity is no secret.
both European Private EquityVCand
But European hasUS VCtransformed in the past decade and is, as a result, not only now performing well, but is
been
also highly competitive on a forward-looking comparison against both European Private Equity and US VC
25.0%
LEGEND
0.0
25-Year 20-Year 15-Year 10-Year 5-Year 3-Year 1-Year
Note: Cambridge
Source:
As of June 30, 2018. Associates
Christina Brinck
Sixth Swedish National Pension Fund
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.
Investor namename
Investor # of known #
fund
of commitments
known fund commitments
Top 15 mostTop 15 most active LPs in tech-focused VC
active LPs in tech-focused VC 1
1 European Investment Fund
European Investment Fund
179
179
funds in Europe
funds in Europe 2 Finnish Industry Investment 28
2 Finnish Industry Investment 28
3 CDC Entreprises 26
3 CDC Entreprises 26
4 British Business Bank 20
45 British Business
AP-Fonden 6 Bank 18 20
56 Access Capital
AP-Fonden 6 Partners 16 18
7 LGT Capital Partners 15
6 Access Capital Partners 16
8 CDC Group 12
7 LGT Capital Partners 15
9 Pantheon 12
8 10 CDC Group
European Regional Development Fund 11 12
9 11 Pantheon
Bpifrance 10 12
12 Enterprise Ireland 10
10 European Regional Development Fund 11
13 European Bank for Reconstruction and Development 10
11 Bpifrance 10
14 Industry Pension Insurance 10
12 Enterprise Ireland 10
15 ARKimedes Managem ent 9
There are very interesting differences between the LP bases supporting European
VC GPs in different sub-regions. Typically, the more mature the VC ecosystem in a
sub-region, the more the LP base diversifies towards private, institutional capital
There are very
and away from dependency interesting differences
on government agencies.between
Therethe LPalso
are bases supporting European VC GPs in different sub-region.
important
Typically,
differences in the level the morefund
of pension mature the VC ecosystem
commitments in a sub-region,
across the more
sub-regions. the LP base diversi es towards private,
On this
institutional capital and away from dependency on government agencies. There are also important differences in
front, the Nordics lead the way with pension funds accounting for 16% of total VC
the level of pension fund commitments across sub-regions. On this front, the Nordics lead the way with pension
funds raised since 2013, more thanfor
funds accounting 7x16%
theofEuropean average.
total VC funds raised since 2013, more than 7x the European average.
Family o ces
Capital markets CEE
Sovereign wealth funds
0 20 40 60 80 100
Banks
% of funds raised (2013-2017)
Insurance companies
Academic institutions
Note:
Taken from the European Data Collective, developed by Invest
Europe. EDC data converted at EUR:USD of 1.1605, the rate on Source:
30 September 2018.
25.2%
Funds raised by fund type and LP type (2013- Government agencies
2.2%
2017)
15.2%
Corporate investors
1.4%
LEG END
13.6%
VC Funds Private individuals
4.3%
Buyout Funds
8.6%
Fund of funds
14.1%
6.7%
Pension funds
37.1%
6.2%
Family offices
4.9%
5.1%
Banks
3.9%
4.6%
Endowments and foundations
4.1%
3.7%
Insurance companies
9.7%
2.0%
Capital markets
0.5%
1.1%
Sovereign wealth funds
12.1%
0.7%
Academic institutions
0.1%
Note:
Taken from the European Data Collective, developed by Invest Source:
Europe.
Pension Funds
0 20 40 60 80 100
% of respondents
Note:
Venture capitalist respondents only. Respondents who Source:
answered 'Not able to comment' �ltered out.
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 Of funds
course,with
one reason
muchfor the difference
larger average in LP commitments
fund is asLP
sizes. As such, simple as the
types scale of the different asset
that
classes.requirements
have minimum allocation European Buyoutcanfunds typically
commit raise 7-8x
without theasconcern
much per of
year as European
being too VC funds with much larger
average fund sizes. As such, LP types that have minimum allocation requirements can commit without the
concentrated as anconcern
anchorofsource of funds for an individual fund manager.
being too concentrated as an anchor source of funds for an individual fund manager.
$42.3B
40.0 $38.3B $37.5B
20.0
$9.5B $8.9B
$5.7B $6.9B
$4.4B $4.7B
0.0
2013 2014 2015 2016 2017 H1 2018
Note:
Taken from the European Data Collective, developed by Invest
Europe. EDC data converted at EUR:USD of 1.1605, the rate on Source:
30 Sep 2018. H1 2018 data is preliminary and subject to change.
Pension funds have committed 45x more capital to European Buyout funds than VC funds,
Pension funds have
Pension funds
committed 45x
have committed
more
45x
capital
moreEuropean
to European Buyout
capital to European
fundsthan
Buyout funds
thanVC
VCfunds,
funds, equivalent to around
equivalent
$75B. In fact, to around
European $75B.
VCs In
accountfact, VCs account for just 2% of theequivalent
total to around
capital
$75B. In fact, European VCs accountfor
forjust
just2%
2%ofofthe
thetotal
total capital committed
capital committed toEuropean
to European Buyout/VC
Buyout/VC funds
funds by by
committed
pension funds
pension
to European
since
funds 2013.
since 2013.
Buyout/VC funds by pension funds since 2013.
VC Funds
VC Funds BuyoutFunds
Buyout Funds VCVC
asas
%% of of Total
Total Commitments
Commitments to European
to European VCBuyout
VC and and Buyout Multiple
Multiple
($B)
($B) ($B)
($B) Funds
Funds (Buyout/VC)
(Buyout/VC)
Funds committed
Funds to VC
committed to and Buyout
VC and Funds
Buyout byby
Funds
LP type (2013-2017) Sovereign
Sovereignwealth
wealthfunds
funds 0.3
0.3 24.5
24.5 1%1% 90.1 90.1
LP type (2013-2017)
Pension
Pensionfunds
funds 1.7 75.6
75.6 2%
2% 45.2 45.2
Insurance
Insurancecompanies
companies 0.9 19.1
19.1 5%
5% 20.7 20.7
Fund
Fund ofoffunds
funds 2.2 28.6
28.6 7%7% 13.3 13.3
Endowmentsand
Endowments andfoundations
foundations 1.1
1.1 8.4
8.4 12%
12% 7.4 7.4
Family
Family ces
o o ces 1.6
1.6 9.9
9.9 14%
14% 6.4 6.4
Banks 1.3 7.8 14% 6.2
Banks 1.3 7.8 14% 6.2
Other asset managers 1.8 11.4 14% 6.2
Other asset managers 1.8 11.4 14% 6.2
Private individuals 3.4 8.3 29% 2.5
Private individuals 3.4 8.3 29% 2.5
Capital markets 0.5 1.1 29% 2.4
Capital markets 0.5 1.1 29% 2.4
Academic institutions 0.2 0.2 42% 1.4
Academic institutions 0.2 0.2 42% 1.4
Corporate investors 3.8 2.8 58% 0.7
Corporate investors 3.8 2.8 58% 0.7
Government agencies 6.3 4.6 58% 0.7
Government agencies 6.3 4.6 58% 0.7
Note: Total of the LP types 24.9 202.3 11% 8.1
Note: Other asset managers include PE houses other than fund of Total of the LP types 24.9 202.3 11% 8.1
Other funds. Data takeninclude
asset managers from thePE
European Data Collective,
houses other than fund of
developed by Invest Europe. EDC data converted at EUR:USD
funds. Data taken from the European Data Collective,
of 1.1605, the rate on 30 September 2018.
developed by Invest Europe. EDC data converted at EUR:USD
of 1.1605, the rate on 30 September 2018.
0 20 40 60 80 100
% of funds raised by LP region
Note:
Taken from the European Data Collective, developed by Invest
Europe. Total may not sum to 100% due to rounding.
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.
ARTICLES
LEG END 17
Existing
New in Year 8
9
44
36
8
29
4 20
12
2 8
1 1 1 1 1 1 4
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Note: Source:
$1B+ European tech companies founded since 2003
Europe saw a record number of tech companies hit a EUROPEAN $B+ TECH COMPANIES
$1 billion+ milestone for the first time in 2018
17
number of European tech companies that
first surpassed a $1 billion+ milestone in
2018, an all-time record for the region
Germany 8 3
LEG
# ofEND
$1B+ European tech companies by UK 13 6
country
Existingof origin
$1B+ companies Sweden 6 1
Russia 4
France 3
Denmark 2 1
Finland 2
France 3
Ireland 1 1
Finland 2
Spain 1 1
Ireland 1 1
Estonia 1
Spain 1 1
Romania 1
Estonia 1
Slovenia 1
Romania 1
Switzerland 1
Slovenia 1
Note: Source:
Switzerland 1
$1B+ European tech companies founded since 2003.
Note: Source:
$1B+ European tech companies founded since 2003.
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
Sonali de Rycker believe this too is just a matter of time.”
Accel
# of $1B+ companies
Interactive Entertainment 8
Real Estate 3
Adtech 1
Healthcare 1
Note: Source:
$B+ European tech companies founded since 2003
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 grewThe 2010s
from have
2 in already
2008 to 31produced 15x more
today. Based $B+
on companies
a similar by Year 8 (2018)
expansion of theof 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
cohort from the 2010s, it’s not far from unrealistic to imagine 30 companies today
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
from thisto moregrowing
decade than 100.to more than 100.
30 31
25
2
0
Year 8 Year 18
Note:
$1B+ European tech companies split by the decade of the
founding year. The 100 number shown for Year 18 of the 2010s is Source:
illustrative only.
LEG END
# of $1B+ companies
$5B+ 7
$10B+ 5
0 5 10 15 20 25 30 35 40 45 50 55
# of $1B+ companies
Note:
$1B+ European tech companies founded since 2003. Latest Source:
valuation as of 31 October 2018.
Europe is now producing $1B+ tech companies at a EUROPEAN $B+ TECH COMPANIES
rate that is greater than an order of magnitude higher
15X
than the last decade increase in the number of $1B+ companies
founded per decade that hit a $1B+ by Year
8 of this decade (2010s) compared to Year 8
of the last decade (2000s)
Europe’s $1B+ tech companies are finding shareholder liquidity via IPOs and M&A and
Europe's $B+ tech companies are nding shareholder liquidity via IPOs and M&A and helping to release capital &
helping to release capital & experienced talent back into the ecosystem
experienced talent back into the ecosystem
LEG END
Ownership status
Public 23
Acquired 10
0 5 10 15 20 25 30
# of $B+ European tech companies
Note:
$1B+ European tech companies founded since 2003. Latest Source:
ownership status as of 31 October 2018.
2018 has been a truly remarkable and a record-breaking year for outsized outcomes in the
European tech industry, capped by Spotify’s giant $25B direct listing.
Country
Country City City Amount Amount
raised ($M)
raisedValue
($M)at IPOValue
($M) at IPO ($M)
TopTop 10 largest
10 largest VC-backedIPOs
VC-backed IPOsby
by market
market cap
cap Spotify
Spotify Sweden
Sweden Stockholm 9,200
Stockholm 9,200 26,500 26,500
at exit
at exit in 2018
in 2018 Adyen Netherlands Amsterdam 1,045 7,810
Adyen Netherlands Amsterdam 1,045 7,810
Farfetch United Kingdom London 885 5,800
Farfetch United Kingdom London 885 5,800
Avast Software Czech Republic Prague 195 3,168
Avast Software Czech Republic Prague 195 3,168
Elastic Netherlands Amsterdam 252 2,500
Elastic Netherlands Amsterdam 252 2,500
Funding Circle United Kingdom London 396 1,980
Funding Circle United Kingdom London 396 1,980
Home24 Germany Berlin 165 660
Westwing
Home24 Germany
Germany Munich
Berlin 145
165 605
660
Westwing
Navya Germany
France Munich 38
Villeurbanne 145 190 605
Navya
Marley Spoon France
Germany Berlin Villeurbanne
51 38 145 190
Source:
Europe has delivered more large tech IPOs in 2018 EUROPEAN TECH IPOS
than the US
4X $5B
Number of European tech IPOs
with an enterprise value of more
than $5B in 2018, versus just one
from the US
US 49
50
43
41
40
34
29 30
28 28
30
20
20
10
2013 2014 2015 2016 2017 2018 9M
Source:
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
The number of sponsor-backed tech IPOs is stable both in
a greater diversity in types
Europe ofthe
and companies
US that have access to public markets.
LEG END
Europe
# of sponsor-backed tech IPOs
11
US 10 10 10
10
9
8 8
7
6
3 3
0
2013 2014 2015 2016 2017 2018 9M
Source:
European tech IPOs far exceed those in the US by volume due to the fact that European
capital markets areMany more European tech SMEs choose to go public
supportive of enabling companies of all sizes by enterprise value,
indicating Europe's supportive listing environment for earlier
whether $1B+ or sub-$100M, to
stage companiescome to market.
60 56
LEG END 50 46
Europe
US 40 36
29 28
30
23
20 16 15 15
11
10
0
2013 2014 2015 2016 2017 2018 9M
Source:
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 The
support and
US still grow
have theirmore
two times companies.
$1B+ exits than Europe
7 7
5 5
5
0
0
2013 2014 2015 2016 2017 2018 9M
Source:
Natalie Massenet
Imaginary Ventures
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
European tech IPO vintages have been able to compete with
strong weighted aftermarket
Americans inperformance.
aftermarket performance
64%
39% 42%
50
0
2013 2014 2015 2016 2017 2018 9M
Source:
Questions are often raised about the sophistication of institutional investors in the
European capital markets and their ability and willingness to invest into tech. The data
shows very clearly, however, that there is a strong pool of European investors that have
built deep and sophisticated understanding of tech by having built large portfolios of
holdings in global tech companies.
Parent
Parent # of#Global Tech
of Global companies
Tech theythey
companies invest in in
invest
Top
Top1010European
EuropeanInvestors inin
Investors global tech
global tech Graubundner Kantonalbank
Graubundner (Private
Kantonalbank Banking)
(Private Banking) Graubundner Kantonalbank
Graubundner Kantonalbank 1 748
1 748
companies
companies
Norges Bank
Norges Investment
Bank Management
Investment Management Government of Norway
Government of Norway 1 746
1 746
DWS Investment
DWS GmbH
Investment GmbH Deutsche Bank
Deutsche AG AG
Bank 1 657
1 657
Deutsche Asset
Deutsche Management
Asset (UK)
Management Ltd.
(UK) (Investment
Ltd. Management)
(Investment Management) Deutsche Bank
Deutsche AG AG
Bank 1 394
1 394
UBS Asset
UBS Management
Asset (UK)
Management Ltd.
(UK) Ltd. UB UB
S Group AG AG
S Group 1 264
1 264
Credit Suisse
Credit AGAG
Suisse Credit Suisse
Credit Group
Suisse AG AG
Group 1 259
1 259
Zurcher Kantonalbank
Zurcher (Investment
Kantonalbank Management)
(Investment Management) State of Zurich
State of Zurich 1 248
1 248
UBS AGAG
UBS (Investment Management)
(Investment Management) UBS Group
UBS AG AG
Group 1 1991 199
Barclays Bank
Barclays PlcPlc
Bank (Private Banking)
(Private Banking) Barclays PlcPlc
Barclays 1 038
1 038
Source:
Source:
Ownership in European public tech companies is more widely distributed than in their
counterparts in theOwnership in European public tech companies is more widely
US and China
distributed than in their counterparts in the US and China
USA
China
25 24% 24%
23%
22%
21% 21%
20%
20 19%
18%
17%
15
2013 2014 2015 2016 2017 2018 9M
Source:
Founder
Investor
Builder
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.
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
20182018
has has
been a truly
been remarkable
a truly remarkableand
and aa record-breaking
record-breaking year year
forfor outsized
outsized outcomes
outcomes in theinEuropean
the European tech industry,
tech industry,
capped by Spotify's
capped giant
by Spotify's $25B
giant $25Bdirect
direct listing. Intotal,
listing. In total,the
the Top
Top 10 10 exits
exits of 2018
of 2018 had ahad a combined
combined ofthan
of more more than $50B.
$50B.
Exit type
Exit type Country
Country City City Value at Value
IPO / EV
atinIPO
M&A ($M)
/ EV in M&A ($M)
Top 10Top 10 largest
largest VC-backed
VC-backed exits
exits byby valueatat
value Spotify
Spotify IPOIPO Sweden
Sweden Stockholm 26,500 26,500
Stockholm
exit inexit in 2018,
2018, IPO &IPO & M&A
M&A Adyen IPO Netherlands Amsterdam 7,810
Adyen IPO Netherlands Amsterdam 7,810
Farfetch IPO United Kingdom London 5,800
Farfetch IPO United Kingdom London 5,800
Avast Software IPO Czech Republic Prague 3,168
Avast Software IPO Czech Republic Prague 3,168
Zoopla M&A United Kingdom London 2,904
Zoopla M&A United Kingdom London 2,904
Elastic IPO Netherlands Amsterdam 2,500
Elastic IPO Netherlands Amsterdam 2,500
iZettle M&A Sweden Stockholm 2,200
iZettle Circle
Funding IPOM&A Sweden
United Kingdom LondonStockholm
1,980 2,200
Funding Circle
Mendix IPO
M&A United Kingdom
Netherlands London 730
Amsterdam 1,980
Trendyol
Mendix M&A
M&A Turkey
Netherlands Istanbul 728
Amsterdam 730
Source:
Country
Country City City EV ($M)EV ($M)
NewVoiceMedia Germany
Relayr United KingdomBerlinBasingstoke
300 350
Relayr
Gram Games Germany
Turkey Berlin
Istanbul 250 300
MetaPack
Gram Games United Kingdom
Turkey London
Istanbul 230 250
Source:
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
Building
iZettle’s $2B+ sale to PayPal,on top of several
have helpedlarge European
to drive tech IPOs,
the total valueEurope hasof
of M&A also seen signi cant exit value via M&A in 2018.
VC-
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 first nine months of 2018.
backed European tech companies to $31B in the rst nine months of 2018.
European M&A exit value ($B) and count by DATASET: EXIT VALUE
company type (VC-backed or not) 120
LEG END
VC-backed exit value
Non-VC-backed exit value
61
52
45
35
Building on top of several large European tech IPOs, Europe has also seen 32
signi cant exit value
25
via M&A31in 2018.
Multi-billion acquisitions, such as iZettle's $2B+12 sale to PayPal,
19
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.
2013 2014 2015 2016 2017 2018 9M
303
256 268 259
243
159
142 135
94
$250-$500M
$500M+ 30
# of deals
24 25
19
20 17
13 14
11 11
9 9
10 5 6 7
A strong for M&A of VC-backed European tech companies has been underpinned5by a record 4 number of
LEGE ND
DATASET: UNDISCLOSED EXIT VALUE
103
Undisclosed
100
75 65
# of deals
50
36
20 23
25
12
0
2013 2014 2015 2016 2017 2018 9M
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
Contrary
companies that involved to the popular,
European but false
acquirers narrative that
exceeded moreEuropean techof
than 50% companies
all M&A exit primarily to US-based buyers, the
share of M&A transactions of European tech companies that involved European acquirers exceeded more than
transactions in 2018, as it has done in each of the past four years.
50% of all M&A transactions in 2018, as it has done in each of the past four years.
100
Share of M&A exits by buyer region by year
LEG END
75
Europe
25
0
2013 2014 2015 2016 2017 2018 9M
Note:
Only VC-backed deals included. 2018 numbers estimated by Source:
Dealroom.co.
Payvision
relayr Munich ReING Group
Sep 2018 Mar 2018
300 528
Source:
FreeAgent RBS Mar 2018 75
Source:
ARTICLES
Prioritise diversity and Europe’s diversity and inclusion in any meaningful way in recent years.
challenges are stark. Just 4% of VC The result: Europe has lost untold
inclusion funds go to female or mixed gender talent and value due to these issues.
teams in Europe. The level of funding to This is not somebody else’s problem. It
other underrepresented groups is even is our problem. Why are we not taking
lower. Those numbers have not budged more positive action?
Mobilise hidden talent pools There are at least 15 cities across most cases. By contrast, Stockholm,
Europe that have more than 50,000 which has around 80,000 professional
professional developers but have seen developers, has attracted almost $5B
less than $1B in total capital investment over that period. How can we get all of
since 2013 and less than $500M in those cities to punch at that level?
10x pension fund Pension funds have committed just European VC is now competitive with
$2.4B to European VCs in aggregate US VC and European private equity.
commitments to European since 2013, equating to less than $500M How can we educate and create the
VC per year. This equates to just 0.01% of right incentives and allocation models
total European pension fund assets to entice more pension funds to
under management of around $4 support a European VC ecosystem?
trillion. All of that despite the fact that
Build density through Europe’s ecosystem is unique in its flows across borders and 28% of
geographic diversity. In response to Europe’s founders and employees have
interconnectivity this, the region’s interconnected hubs also moved across hubs. How can we
are achieving density in a uniquely strengthen this interconnectivity even
European way. More than a third of all further?
investments by European VC already
Lose the inferiority complex There is no better proof that European never deviated from its long-term vision
tech companies can compete on the despite untold distractions. And they
global stage than Spotify. It is hard to still ended up as the global category
think of a company anywhere that has leader and a trusted consumer brand
had to fight fiercer competition from the world over. What can we learn from
the world’s largest tech companies and Daniel and his team?
Build an investor base to The transformation of the European have access to the same capital and
investor base into a deep and advice as those in London, Paris or
target underrepresented increasingly sophisticated network Berlin. This means a new generation
communities of interconnected sources of funding of sophisticated investors in new
has elevated European tech to geographies and explicitly seeking to
another level. But the job is not close invest in diverse groups of founders.
to being finished. Europe’s challenge What can we do to help incentivise
is to identify and support emerging and support this next generation of
fund managers and angels that can investors?
target the communities that do not
Bridge the tech and policy European tech leaders and and help strengthen the European tech
policymakers want to work more closely ecosystem. How can we build a bridge
divide to harness tech for together, but they are still speaking to create a European tech ecosystem
good across each other today. If aligned that is working in concert with its
more closely we could create better policymakers to unlock the potential of
products and services for consumers using tech for good?
Stop living in the past and People still talk about Europe like it region of multiple democratic countries
can’t do tech. And for sure, Europe and languages. We need to throw away
drop the cliches has historically not created as much disparaging clichés about European
enterprise value from tech as the US tech. Europe’s tech ecosystem is
and China. That isn’t surprising. The US flourishing and rapidly gaining ‘market
tech ecosystem has a 30-year headstart share’ on the global stage. If we can’t
on the European ecosystem. China is a stop talking about the past, how can we
closed market with heavy government focus on the future?
support which cannot be replicated in a
Compensate talent and Europe’s biggest challenge, arguably, back from overseas. Europe now
remains a shallow pool of executive offers compelling opportunities to
bring it to Europe level talent with experience scaling tech join amazing companies, but needs to
companies to thousands of employees, align compensation to compete with
millions of users and billions of revenue. benchmarks elsewhere. What can
The ecosystem is, therefore, reliant Europe do to help incentivise talent
on attracting global talent to Europe more effectively?
or to luring home European talent
Prioritise diversity and This challenge is so great, it should be and stakeholders even if it solves all the
Europe’s first and most urgent priority. other challenges. Some people have
inclusion If Europe fails to make meaningful started to make a difference. Diversity
progress on this, it will still be unable VC has created a toolkit for founders
to reach its full potential in terms of to address diversity and inclusion. So,
creating value for consumers, business what are you doing?
to a Data Fight
ARTICLES
DACH
LE GE ND
DACH
L E G END Lack of Ecosystem
France & Benelux
Capital Availability
Lack of Ecosystem
Global Competitiveness France & Benelux
Nordics
Capital Availability
Market Fragmentation
Global Competitiveness
Slow Moving Rest of Europe Nordics
Not Innovative
Market Fragmentation
Southern Europe
Talent Availability
Slow Moving Rest of Europe
Overly Regulated
UK & Ireland
Not Innovative
Diversity
Southern Europe
Talent Availability
Startup Unfriendly 0 10 20 30 40 50 60 70 80 90 100
% of respondents
Overly Regulated
UK & Ireland
Diversity
Source:
Startup Unfriendly 0 10 20 30 40 50 60 70 80 90 100
% of respondents
Note:
Based on respondents that gave explicit responses only Source:
15%
What, in your opinion, is the biggest myth you Lack of Ecosystem 15%
Lack of Ecosystem 18%
What, in regularly
your opinion, is the biggest myth you
encounter about the state of the 14% 18%
Global Competitiveness
12% 14%
regularlyEuropean
encounter tech about the state of the
ecosystem? Global Competitiveness
Capital Availability
14% 12%
European tech ecosystem? 17%
14%
LE GE ND Capital Availability
Market Fragmentation
12%
17%
Founder or startup/scale-up employee Slow Moving 11% 12%
L E G END Market Fragmentation
Investor 9%
Talent Availability
Founder or startup/scale-up employee Slow Moving 8% 11%
Overly Regulated 9%
Investor 4%
9%
Talent Availability 8%
Not Innovative 8%
13%
Overly
DiversityRegulated
5% 9%
4%
4%
Startup Unfriendly 8%
Not Innovative
13%
0 3 5 8 10 13 15 18 20
5%
Diversity % of respondents
Startup Unfriendly 4%
Source:
0 3 5 8 10 13 15 18 20
% of respondents
Note:
Founder and investor respondents only. Based on respondents
that gave explicit responses only Source:
Note:
Founder and investor respondents only. Based on respondents
that gave explicit responses only
68%
Share of total market cap of public Internet &
Software companies by region
60
% of total market cap
L EG END 47%
All public tech companies
40
All public tech companies founded since 2006 33%
23%
21%
20
8%
0
China Europe US
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. S&P Global Market Intelligence
If you were to start over, where would you I would stay where we are now 63.9%
choose to found and build your company?
Note:
Founder respondents only
20.0
Employee ownership by funding round stage
in 50th percentile by region
LEGEND 15.0
Executives (Europe)
% of ownership
Executives (US)
Staff + Other (Europe) 10.0
0.0
Note: Europe US Europe US Europe US Europe US
This details equity held by executive-level employees, staff- Seed Series A Series B Series C
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
L E GE ND
Agree All respondents
0 10 20 30 40 50 60 70 80 90 100
% of respondents
ARTICLES
2017 Prediction
Founders will come to see regulation as a source of
potential competitive advantage
The ‘move fast and break things’ Cycles, Kry or Babylon in the healthcare
mentality has never sat well with heavily market. They are all early examples
regulated markets. As founders realise of companies that have embarked
they can gain an advantage through upon - and come out on the other
regulatory compliance, it will go from side of - lengthy regulatory approval
being seen as a perceived handcuff processes to gain an advantage on their
to being seen as a potential source of competitors.
competitive advantage. Think of Natural
Non-tech European corporates have millions (for example, BNP Paribas and
already made billion-dollar tech Compte Nickel). This will change in 2018
acquisitions (Anglo-Dutch Unilever as European non-tech corporates put
picked up Dollar Shave Club), but some of their combined $1.5 trillion
acquisitions within Europe have cash holdings to work.
typically been in the hundreds of
In the purest sense, this did not come enterprise value of around $6 billion.
Mark: 0.5/1 to pass. There was no single acquisition Siemens, the German industrial giant,
of a European VC-backed company acquired Mendix, a Netherlands-
for more than $1 billion to a traditional born, -funded and -raised enterprise
non-tech European giant. But that’s software company, for $730 million.
not to say that there was not plenty of In other smaller, but still meaningful
relevant M&A activity that validated transactions, ING Group acquired
this trend. In fact, the year started in Payvision for a fee that valued the
January with Richemont’s acquisition of business at more than $500 million,
full control of the European, formerly- while Munich Re acquired Berlin’s Relayr
VC-backed, but now public company for $300 million. All this taken together,
Yoox Net-a-Porter for an implied total we think this deserves a half mark.
The battle for talent in Europe is ensuring talent flows are not a one-
intensifying. Not only are there more way street into tech. In order to stay
venture-backed startups that are better competitive in this context, European
funded and hungrier for engineering founders will look for creative ways to
talent than ever, but global tech giants best exploit the untapped engineering
are also expanding aggressively in the talent pools in less obvious places.
region with inflated salaries on offer for For example, we expect to see more
the most talented. At the same time, satellite offices opening up across the
European corporates are fighting back, region in upcoming hubs.
This trend has certainly taken hold in already opened satellite offices to
Mark: 1/1 Europe in 2018, driven by increasing tap new talent pools and 80% of
levels of competition for talent in core those founders expressed increased
European tech hubs and a growing interested in opening additional
awareness of the depth of talent in offices. As one example, N26 has
emerging hubs. According to the more opened its first major office outside of
than 1,000 founders that responded Berlin, choosing Barcelona to build an
to this year’s State of European Tech office that will quickly expand to 100
Survey, more than 50% of companies employees.
with more than 100 employees have
In 2017, top tier US funds (including newest funds, such as Blueyard. But the
Andreessen Horowitz and Union Square region’s most established funds have
Ventures) actively invested directly yet to participate. This will change in
in tokens via Initial Coin Offerings. 2018.
They were joined by some of Europe’s
This did not happen, at least not through the year, but under the surface
Mark: 0/1 publicly. In 2018, making any sort of European teams have continued to
prediction around the state of the make progress and raise funds from
crypto market proved particularly top tier European investors, often via
dangerous given the extreme level of traditional equity. Argent, for example,
volatility in the market and an enduring raised capital from Index Ventures and
bear market. The price of crypto assets Creandum.
has inevitably dominated the headlines
Investing in
Underrepresented Founders
The figures are damning. Only 7% funded today. We cannot shy away
of all capital invested in European from how difficult it will be to turn
tech companies in 2018 went to this tide. Established VC firms have
female or mixed gender founding a responsibility to look harder, and
teams. We cannot measure the face down their unconscious biases.
imbalance in funding allocated to Dedicated funds targeting investment
other underrepresented communities, into these communities are also part
but those figures would only be of the answer. These numbers have to
harder to read. It is even harder to change if we are to fulfil our potential.
consider just how much talent and 2019 is the year that new funds will start
value has evaporated away from our to make this happen.
industry because they are not being
Build
From Home
According to the European Centre for their companies, and the second was
Policy Studies, tech talent in Europe defined by entrepreneurs staying to
is 10x more likely to move than the build from Europe but choosing one of
average citizen in Europe. This is the region’s major hubs (London, Berlin,
extraordinary and owes much to the etc.); then we’re entering a third phase
historic geographic opportunities where founders choose to stay where
of European tech. Europe is set to they are, emboldened by the quality of
enter a third phase in the evolution of the local ecosystems they see arising
entrepreneurial tech talent mobility. around them all across Europe. The
If the first phase was defined by the more that founders and talent choose
frequent flow of talented European to build from home, the more that 10x
entrepreneurs moving to the US to build difference will contract.
Softbank Vision Fund has mostly the 12 $5 billion+ companies that have
set its eyes on the US, but it has also been founded in the past 15 years and
been active in Europe, leading giant as more growth stage capital lines up to
$500 million+ rounds into Improbable capture the European tech opportunity,
and Auto1. As Europe produces more we should expect $500 million+ rounds
multibillion-dollar companies to go with to become more common.
EuroSaaS
European founders and investors are going to predict who makes it out first,
the first to admit that Europe started but we do think 2019 will see the next
behind the curve in SaaS. But Europe’s set of European SaaS IPOs to follow
leading SaaS companies are making in the footsteps of pioneers such as
up for lost time and scaling quickly. Mimecast. It’s about time too.
We’re looking at you, UIPath. We are not
ARTICLES
13.3 Acknowledgements
Giovanni Anelli Alice Bentinck Elsa Bernadotte Christina Brinck Ophelia Brown
CERN EF Karma Sixth Swedish National Blossom Capital
Pension Fund
Tugce Bulut James Clark Michael Collins Simon Cook Rosie Dallas
Streetbees London Stock Invest Europe Draper Esprit Fat Llama
Exchange
Jacob de Geer Sonali de Rycker Lisa Edgar Rasmus Ekholm Linda Griffin
iZettle Accel Top Tier Capital Slush King
Partners
Irina Haivas Taavet Hinrikus Pip Jamieson Baroness Martha Nenad Marovac
Atomico TransferWise The Dots Lane Fox Invest Europe
Doteveryone
Natalie Massenet Jamie McFarlane Raj Mukherjee Dave Norwood Steve O’Hear
Imaginary Creator Fund Indeed Oxford Sciences TechCrunch
Ventures Innovation
Pierre Stadler Juan Urdiales Munish Varma Caroline Walerud Teddie Wardi
Pictet Alternative Jobandtalent SoftBank Vision Voumental Insight Venture
Advisors Fund Partners
Mike Allanson Ciarán Boylan Jon Brewer Liz Chang James Clark
Studio Lovelock Indeed Orrick Meetup London Stock
Exchange
Matt Collins Sergei Filimonov Rugiyya Gahramanli Ben Jakob Ant Jumratsilpa
Studio Lovelock Craft London Stock Studio Lovelock Studio Lovelock
Exchange
Bryce Keane Julie Kim Thomas Koesters Janne Korpela Jani Kurki
Atomico Quid European Startup Slush Slush
Initiative
Conrad Lee Ilya Levtov Joe Lovelock Declan McNamara, Gligor Micajkov
Advanced HR Craft Studio Lovelock Phd Dealroom
LinkedIn
Marcus Nordberg Joanna Nye Julien Puls Anais Rassat Maeve Ryan
CERN Preqin Dealroom CERN LinkedIn
Julia Silge Karthik Suresh Eleanor Warnock Tom Wehmeier Yoram Wijngaarde
Stack Overflow Craft Atomico Atomico Dealroom
Chief Squirrel
Atomico
Our mission is to spur this progress Want to work on this report with us
forward. next year? We’re looking for a Research
Associate. Drop Tom a line at tom@
It’s why we partner with the world’s atomico.com.
most ambitious founders. The rule-
About Slush
Studio who?
ARTICLES
Nordics 35.0%
Geographic origin of survey respondents
UK & Ireland 19.4%
L EG E ND
DACH 12.3%
% of respondents
Note: Source:
Numbers may not add to 100 due to rounding.
Founder 27.9%
Occupation of survey respondents
Investor 16.2%
L EG E ND
Company employee (non-tech) 16.2%
% of respondents
Other 5.9%
Student 4.8%
Academic/researcher 2.0%
Note: Source:
Numbers may not add to 100 due to rounding.
Gender of respondents
Male 70.81%
L EG E ND
% of respondents
Female 27.37%
Source:
Advanced-HR Advanced-HR is the leading provider and service providers. The VCECS
of pre-IPO compensation data. We results are leveraged in the Option
partner with top-tier investors and Impact compensation database, an
portfolio companies to produce ongoing survey where companies
the world’s largest compensation maintain current information in the
database specific to private, venture- system in exchange for full database
backed companies. Advanced-HR’s access at no cost. Advanced-HR is a
VC Executive Compensation Survey Solium company (Solium Capital Inc.)
(VCECS) is for corporate use by (TSX: SUM). To learn more, please visit
investors, management professionals, www.advanced-hr.com.
CERN The European Organisation for Nuclear aerospace, and industry 4.0, and are
Research (CERN) - is a world-renowned already present in start-ups hosted in
centre for scientific research, CERN’s network of Business Incubation
celebrated for its recent discovery of Centres. CERN is also part of the
the Higgs boson. CERN’s technology ATTRACT initiative, a European call for
provides concrete business solutions breakthrough ideas that will fund 170
in many fields: from medtech to innovative projects from 2019.
EIF The European Investment Fund (EIF) is capital, guarantees and microfinance
part of the European Investment Bank instruments, which specifically target
group. Its central mission is to support this market segment. In this role, EIF
Europe’s micro, small and medium- fosters EU objectives in support of
sized businesses (SMEs) by helping innovation, research and development,
them to access finance. EIF designs entrepreneurship, growth, and
and develops venture and growth employment.
European Startup Initiative The European Startup initiative startup hubs. The 2018 survey was
behind the Heatmap is a non-profit collected between April and August
organization enabling founders and 2018 and had 1,500 participants. After
tech talent to navigate European cleaning and sampling the data, 984
startup hubs and support community complete datasets remained that
builders to connect their ecosystems. were weighted to adjust for regional
representativeness on country level.
http://www.startupheatmap.com Founders were 57.52% of respondents.
For long-term trends in founder
The Startup Heatmap Europe is mobility, we used a combined dataset
an annual survey among founders of 3 years with 1,661 distinct founder
and the greater tech community on dataset
mobility and the attractiveness of
Indeed More people find jobs on Indeed than people each month search for jobs,
anywhere else. Indeed is the #1 job post CVs, and research companies on
site in the world and allows jobseekers Indeed, and Indeed is the #1 source
to search millions of jobs on the web of external hires for thousands of
or mobile in over 60 countries and companies (sources: SilkRoad & iCIMS).
28 languages. More than 200 million For more information, visit indeed.com.
LinkedIn Founded in 2003, LinkedIn connects network on the Internet. The company
the world’s professionals to make has a diversified business model with
them more productive and successful. revenue coming from Talent Solutions,
With more than 590+ million members Marketing Solutions, and Premium
worldwide, including executives from Subscriptions products. Headquartered
every Fortune 500 company, LinkedIn in Silicon Valley, LinkedIn has offices
is the world’s largest professional across the globe.
Meetup Meetup is a global community platform around the world. Meetup was acquired
that connects people in real life. It by WeWork in 2017. The two companies
was founded with one simple idea: share a vision of the power of bringing
use technology to get people off people together, and together
technology. Our vision is to harness using technology to create new and
technology to remove the barriers to innovative ways of building community.
human connection and deliver real life Follow us @Meetup on Twitter, @
community. Meetup supports over 40 Meetup on Instagram and Facebook, or
million members+, 320,000+ Meetup visit meetup.com to learn more.
groups and 12,000 Meetups per day
Preqin Preqin is the home of alternative Our products and services are relied
assets, providing indispensable data, upon by more than 60,000 industry
solutions and insights to support participants in over 90 countries,
alternative asset professionals at for a range of activities including
every stage of the investment cycle. fundraising, investor relations, asset
Since 2003, we have been the most allocation, fund manager selection
trusted source of information on and business development. Preqin is
alternative assets, spanning private an independent business with over
equity, venture capital, hedge funds, 400 staff based in New York, London,
real estate, infrastructure, private debt, Singapore, San Francisco, Hong Kong,
natural resources and secondaries. Guangzhou and Manila.
Quid Quid is software that reads millions analytics, natural language processing
of documents and offers immediate and network science to help surface
insight by organizing that content key insights, enabling our Fortune 1000
visually. We power human intuition clients to quickly complete analyses
with machine intelligence, enabling like competitive tracking, market
organizations to make decisions landscapes, brand narrative maps, and
that matter. The tool uses big-data intelligence briefings.
Stack Overflow Founded in 2008, Stack Overflow is the Overflow partners with businesses to
largest, most trusted online community help them understand, hire, engage,
for developers to learn, share their and enable the world’s developers. Our
knowledge, and build their careers. products and services are focused
More than 50 million professional and on developer marketing, technical
aspiring programmers visit Stack recruiting, market research, and
Overflow each month to help solve knowledge sharing within organizations.
coding problems, develop new skills,
and find job opportunities. Stack