Europe has produced 30 technology companies worth more than US$1 billion since the millennium, according to research which explodes the myth that European Internet entrepreneurs lack vision and sell up too early.
Clothing retailer Asos, games studio King Digital, property portal Zoopla and the music service Spotify are among Europe’s most valuable technology companies, most of which remain independent.
The research, conducted by boutique investment bank GP Bullhound, shows Europe compares well with the US, which produced US$39 billion companies between 2003 and last year.
These valuable startups, which the researchers refer to as “unicorns,” are few and far between. The 30 produced in Europe account for just 0.27 percent of comparable tech firms founded in the past 14 years. (Israel is included, owing to its strength in technology and proximity to Europe.)
In the US, a comparable study by startup fund Cowboy Ventures found 0.07 percent of venture-backed groups started since 2003 had reached billion-dollar valuations.
The UK, with its big domestic market, love of online shopping and high level of Internet and smartphone adoption, has been most successful in creating technology millionaires — producing 11 unicorns since January 2000. Among these are recently listed appliances retailer AO World and Just Eat, a takeaway service.
Russia is in second place with five unicorns, including Yandex, a search engine with a larger share of the market than Google.
Sweden is third with four unicorns, including Spotify, Mojang — which makes Minecraft — and the Anglo-Swedish group King, creator of smartphone game Candy Crush. Finland and France have produced two, and Germany, Spain, Ireland, Israel, Italy and Luxembourg one each.
“Europe is much more adept at creating billion-dollar tech companies than most experts expected,” GP Bullhound cofounder Manish Madhvani said.
“The much-voiced criticism of UK tech has been that owners tend to sell out too early to US tech giants. However, this is clearly changing with many companies such as Spotify, Just Eat, Criteo and Zoopla turning down multiple approaches to create true global leaders,” Madhvani said.
Despite the recent spate of initial public offerings (IPOs) in London, two of the biggest European unicorns have recently turned to the NASDAQ and New York Stock Exchange for their debut on the public markets. King chose the US for its US$7 billion IPO this year, while online financial information group Markit has picked NASDAQ for its estimated US$4.5 billion listing.
The two European unicorns to have found buyers are Skype, acquired by Microsoft for US$8.5 billion, and Finland’s Supercell, which makes mobile game Clash of Clans and was bought by Japanese telecoms and Internet group Softbank.
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