Sustained growth.

The world of startups is obsessed by this concept. If we look at the numbers of the European startup ecosystem we, finally, spotted a sustained growth pattern. The efforts put in place in the last few years to support the startup ecosystems in Europe seem to finally pay off. The number of European scaleups have been growing consistently by 20% year after year on an average (+13% in 2018). This means Europe added about 1,400 new scaleups in 2018.

This growth pattern is even more visible in terms of capital invested. In 2017, we witnessed a remarkable step-up. The capital invested into European scaleups jumped to $22B from approximately $14B average from the previous 3 years (2014-2016). The headline for 2018 is that the capital invested has almost doubled, breaking the $40B barrier of capital poured into scaleup ecosystem. The other piece of news is that the growth in capital invested does not come only from venture capital (increased by over $4B). Over $13B come from the stock markets (mostly driven by Spotify and Adyen IPOs) and additional $2.8B through cryptos (ICOs).

The gap with the US remains huge with 3 times more number of scaleups and 6 times more number of investments. China has surpassed Europe with 40% more scaleups fueled by over 2.5 times the capital.
Then, a classical “Good News, Bad News” situation.
Europe is growing, but it needs to accelerate faster. And to do it, the recipe is clear: more investments are required.
The current level (at 0.53% of GDP) is obviously insufficient, especially when China invests 1.34% and the US 3.58%. It goes without saying that Europe has multiple ways through which scaleups in its ecosystems behave according to their given situations, unlike in the US where growth routes are standardized and there is an expected plan of exit for every startup.
The following sections of this report as well as in the dedicated in-depth country reports, we will go deeper into where the growth is taking place by geography and by vertical. As with many of such analysis efforts, we have tried to understand the country and region trends as well as their alternative financing options and scaleup growth paths because there is (not yet or) no specific way for tech companies to scale up in Europe.

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