Atomico, a venture capital firm, recently released an analysis report “The State of Technology in Europe”, stating that Europe will add 98 unicorns (i.e. technology start-ups with a valuation of at least $1 billion) in 2021, bringing the total to 321. Europe has moved up one place in the world rankings for the number of unicorns, surpassing China and just below the United States.

It is reported that the United States ranked first with 487, an increase of 254 over last year; Europe jumped second with 321, and China ranked third with 301.

If you are a reader who is concerned about venture capital going overseas, you may find that the number of European technology unicorns is gradually increasing. On the whole, as an old-fashioned capital, it exists as a stable development role in the risk-taking and radical venture capital circle. The enthusiasm and enthusiasm for risk-taking in Europe is not as high as that in China and the United States. But in the latest tech unicorn statistics, it breaks the stereotype and breaks the circle, and the number of tech unicorns exceeds that of China in the venture capital circle. What "hormones" did the rising European unicorns eat? The reasons behind this are still worth analyzing and discussing.

The "fertile ground" for the rise of unicorns

The core of unicorn development is innovation. For innovation, the most nurturing environment is loose and active policy support and heavy capital investment. Of course, as the main body of innovation, talents are also indispensable. The rise of European unicorns is also related to these fertile grounds.

1. The sequential improvement of the investment environment. Take the more typical France as an example. In this country that once said “escape from Paris and go to Silicon Valley”, tax and labor laws are complex and opaque, and the regulatory framework is incomplete. Choice not only hinders innovation but also hinders the entry of external capital.

In recent years, with the continuous improvement of the government's taxation and venture capital environment, the investment environment in France has become more and more "friendly". According to the "Guidelines for Foreign Investment and Cooperation Countries (Regions)" issued by the Ministry of Commerce of China, France's investment environment is open and transparent. Except for certain special industries that need to be declared, foreign investors can enjoy "national treatment" in the French market.

2. Improve the business environment and policies for entrepreneurship. Previously, the market and financial regulatory authorities of continental European countries have always maintained a cautious attitude towards financial institutions and financial markets, restraining the preference of fund capital to the European market. In recent years, many European countries have begun to actively reform and innovate their financial systems. At the same time, under the economic pressure and the heavy burden of the social security system, European governments have tried their best to encourage people to start businesses, and even the risks generated can be borne by the governments.

The UK’s business environment has always served as a model for Europe. According to the House of Commons Library statistics, in 2019-2020, there were 665,495 newly established start-ups in the UK, which is equivalent to an average of 1,823 establishments per day. enterprise. According to CB Insights statistics, as of November 2021, there were 37 unicorn companies in the UK, the largest number among the four major economies.

France, which was once not pro-business but gradually opened up, has also become one of the countries with the lowest startup failure rate in Europe. According to Business France, France today has the world's largest incubator and tens of thousands of start-ups. The funding value and the number of deals for French startups have also been on an upward trend in 2017-2020. According to CB Insights, as of November 2021, there are 19 unicorns in France.

3. Supplement the high-tech talent pool. For innovation, especially in the high-tech field, high-quality world-class university talents are crucial to the entrepreneurial ecology. Europe has many universities with strong scientific research and engineering strength, and is the cradle of talent training and transportation for high-tech industries. The well-known Oxford and Cambridge universities are ranked in the top ten in the world, and in the top 100 schools in the world, dozens of universities in the UK alone are on the list.

France has also formulated a strategy for cultivating elite talents. In terms of talent training, France has institutions of higher learning such as HEC and INSEAD, which have cultivated many outstanding talents.

For the coveted talent pool, the big names in the technology circle can not be absent, such as Google's Alphabet Inc., Amazon and Facebook parent company Meta Platforms, also tend to set up innovation research centers in Europe, and local universities or scientific research institutions. Cooperate to take full advantage of Europe's talent pool. Talent is one of the most critical factors in the development of scientific research, venture capital and innovation in Europe.

Under the nourishment of these fertile soil, the European entrepreneurial ecosystem continues to grow. According to Elisa Tarzia, author of "The European Technology Center is Rising", the EU has more than 128,000 start-ups, 5,000 venture capital firms, and 1.3 million entrepreneurial jobs. 164 unicorn companies. Overall venture capital valuations and employment in Europe have seen unprecedented growth, and the gap with the United States is narrowing.

Europe has also begun to gradually emerge from the shadow of Silicon Valley. The openness and freedom of the venture capital environment have enabled innovation to flourish, and unicorns have developed rapidly with the support of technology and policies. These new unicorns come from all walks of life.

Deeply cultivated and explored industries

In the "2021 Global Unicorns" list released by Hurun, we will find that half of the world's unicorns are companies in the fields of financial technology, software services, e-commerce, artificial intelligence and health technology, which are also capital Favorite areas of investment. Most of the unicorns rising in Europe also come from these five industries.

Finance is the top of all industries, and the integration of technological means and financial innovation has accelerated the development of the field of financial technology. According to statistics from CB Insights, as of November 2021, 22 of the 37 unicorn companies in the UK are from the fintech track. And among the top ten unicorn companies in the world. The two European unicorns on the list are also from the financial sector.

London-based digital bank Revolut, known as Europe's Huabei, is widely loved by young people in Europe because it is friendlier than credit cards. At present, its valuation has reached 210 billion yuan, ranking from 38th to the top ten, becoming the largest unicorn in the UK. In July 2021, Revolut raised $800 million in a new funding round led by SoftBank Vision Fund and Tiger Global. Revolut has raised a total of $1.7 billion in 14 funding rounds.

Another unicorn company in the top ten is from Stockholm, Sweden. Klarna, an e-commerce credit payment platform, mainly provides digital bank accounts and various other financial services. Such as the transfer and exchange services of a variety of international currencies. The current valuation has reached 300 billion yuan, ranking it up 53 places to fifth, and it is the largest unicorn company in Europe. Users can transfer and consume multiple international currencies for free through prepaid cards and mobile apps. They can also view running bills, buy and sell cryptocurrencies, or trade other financial products through the app.

Two types of unicorn companies, software and services, and artificial intelligence, benefit from the global popularity of Internet technology and the huge market size, which has pushed up the number of unicorns.

For example, Graphcore, a British AI chip unicorn, was founded in 2016. After the latest round of financing, Graphcore was valued at US$2.77 billion, making it the most valuable chip startup in Europe. At present, Graphcore has also established cooperation with Alibaba and Baidu, and is accelerating the adaptation and implementation of machine vision, natural language processing and other algorithm models and hardware.

Hopin is a UK based online events company founded in 2019. In just a few minutes, organizers can create, host and manage live events for up to 100,000 people online, including online meetups, internal meetings, online marathons, and more. Hopin has grown rapidly during the epidemic, attracting a total of $125 million in financing, and its current valuation is as high as $2.1 billion.

Of course, in addition to such online event companies, in the fields of e-commerce and health technology, the number of unicorns has also increased due to online development needs and the acceleration of the epidemic.

Among the 37 unicorns in the UK, in addition to the number one in the financial technology track, the rest are companies related to online e-commerce retail. According to statistics from CB Insights, as of November 2021, of the 37 unicorn companies in the UK, 22 are from the financial technology track, and 3 are related to e-commerce retail.

In the field of health technology, the British company CMR Surgical is valued at 19.5 billion yuan, while in London, the financing momentum of life and health technology companies is still strong, including Babylon Health ($100 million) COMPASS Pathways ($80 million) and Cera ($75 million). US dollars) and other larger financing.

Of course, among them, there are many unicorns with many bright spots, such as British electric car manufacturer Arrival, renewable energy provider Octopus Energy, used car e-commerce CAZOO, cloud communication service company Infobip; SaaS unicorn German Signavio (RAP company), Adjust (German mobile marketing data analysis company), Veeam (Swiss enterprise intelligence data management company) and Acronis (Swiss data protection company), etc.

These unicorns in different industries have left a unique innovation value to the European history of science and technology. Whether it is their contribution to the field of life and health, or their technological assistance under the epidemic, they have enriched the lives and work of local consumers and users. The choice also provides an increase in business value. In the foreseeable future, the space for the European technology venture capital field to show its strengths will also become wider.

Unicorns of the future: gaining momentum

As the pioneers of technology companies, unicorns are not only a benchmark sample for other venture capital technology companies to refer to, but also a weather vane for the evolution of future trends. European unicorns have also become the best window to observe the future trends of European technology.

The trend we can observe is that the number of online service companies in Europe will continue to increase. The most obvious example is online retail. Under the influence of the epidemic, the offline retail industry has been hit hard, but the online retail business has grown significantly in 2020. According to retail industry insiders, in the second quarter of 2020 (during the first lockdown), the UK opened an average of 4,613 new online retail businesses per month, a figure that was 66 more than the monthly average in 2019 (2,783). %. Especially during the epidemic prevention and control period, technology companies such as fintech, online e-commerce, online events, online office, and food delivery have developed rapidly and attracted huge investments.

The second obvious trend is that the development of B2B enterprises ushered in the spring. Across Europe, B2B unicorns are starting to outnumber B2C, according to CBInsights. The software-as-a-service track is leading and growing in both financing and acquisitions. Most of the new unicorns in the German-speaking region in 2021 will be B2B. Such as EMnify (Germany cloud original biological networking company), Empolis (big data company), The Female Company (Germany provider of rapid innovative marketing and lead generation methods), Laserhub (Germany innovative metal parts production and procurement B2B platform) and so on.

The third trend is that there will be unicorns that follow the pace of the times, such as decentralized digital banks and digital currencies, blockchains, metaverses, etc. to innovate the traditional Internet. The development of the Internet has entered a period of shrinking, lacking fresh innovation stimulation, and emerging fields such as the Metaverse and web3.0 will always be the first to eat crabs. In these traditional fields of innovation, there will be no shortage of unique innovations in the future. Figures of horned beasts.

In addition, bio-health technology and energy companies will gradually increase. Andrew Elder, a partner at venture capital firm AlbionVC, said: "Given our ravages of the pandemic, it's not surprising to see the medtech industry make strides, with healthtech companies emerging in the UK to serve the well-being of humanity."

Whether it is because of the epidemic or the scientific and technological needs of green decarbonization, the development of life sciences, the preparation of vaccines, the AI ​​research and development of other drugs, and the reduction of energy emissions all need to keep up with the "rut" of the times. After all, the exploration of life and sustainable development are the ultimate pursuit of human beings.

In the rise of European unicorns, we not only see the vigorous innovation vitality and commercial value, but also with the loosening and promotion of financing, business environment, strategies and policies, the number of unicorns will continue to increase. In the process of digital transformation of globalization, European unicorns will also serve as pioneers to continuously polish new technological samples. Faced with a market of 500 million people and a per capita GDP of 25,000 euros, the burst of creativity and value will benefit the entire technological development of Europe.

Of course, the emerging unicorns will radiate these capabilities to the more than 80 countries connected to the EU, and the services and values ​​connected in series will also make the entire European science and technology ecosystem more diverse and rich. In the future, the world of European unicorns will be vast, and unicorns will make great achievements.

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