Contents 04 THE VIEW FROM GP BULLHOUND 06 CHAPTER 1 Momentum 20 EXPERT VIEW Peter McKay, Snyk 26 CHAPTER 2 Sector insights 30 EXPERT VIEW Serguei Beloussov, Acronis 34 EXPERT VIEW Oscar Pierre, Glovo 36 CHAPTER 3 Europe’s next generation 42 EXPERT VIEW Julie Ranty, VivaTech 44 CHAPTER 4 Late-stage funding 48 EXPERT VIEW Des Traynor, Intercom 52 EXPERT VIEW Dr Ali Parsa, Babylon 54 CHAPTER 5 On the path to Europe’s first Tech Titan 60 METHODOLOGY 64 DISCLAIMER CONTENTS 3 THE VIEW FROM GP BULLHOUND EXECUTIVE SUMMARY The View We believe 2019 and 2020 year-to-date has been a pivotal period for tech as a whole, in particular for the European ecosystem, and that the landscape is sufficiently robust for this growth to continue. At GP Bullhound we are big believers in technology’s importance to mankind. The COVID-19 pandemic has significantly magnified this during the enforced lockdowns. Without Zoom, Google Classrooms, Amazon, Netflix, Fortnite (adopting the role of parenting millions of children), Ocado, etc., many would have experienced greater isolation and challenges. This pandemic has also compressed innovation cycles. We believe the rates of tech adoption have been accelerated by five years in a matter of months and will leave the landscape ripe for more record innovation. This is a very exciting time for entrepreneurs founding new businesses, and scaling existing ones even faster. For M&A, while many other sectors are struggling, tech companies are on a buying streak. Alphabet, Amazon, Apple, Facebook and Microsoft held $560bn in cash at the end of Q1 2020, and announced 19 deals this year, representing the fastest pace of acquisitions to date since 2015 (1). In our view, tech is the sector most likely to avoid a deep recession. In Europe, the proliferation of success stories across newer geographies continues and the list of countries creating their first unicorn continues to expand. The Baltics delivered year-on- year, with Lithuania now on the map thanks to Vinted. We also expect Turkey to join next year with Zynga’s $1.8bn acquisition of Peak Games, after the cut-off date for this year’s report. There are big underlying shifts in the sectors where leaders are emerging; for example, in Enterprise Software, there has been a sharp increase in new entrants in the Storage and Cybersecurity subsectors. The value of Marketplace models has significantly outpaced E-commerce in the past five years and as the world races to shift to digital, we expect this to rapidly increase as the biggest consumer categories remain largely underdigitised. European tech is now seen as a key hedge against some of the US ecosystem’s challenges. Europe has a broad and diverse supply of capital and investors remain confident, deploying large sums of money to European leaders. In 2019, late-stage funding increased by more than twofold for Europe’s tech leaders, and the funding environment remains robust with 2020 year-to-date transactions double that of 2018 and in line with 2019 (2). This year we showcase eight Tech Titans – companies founded after 2000 and valued at $50bn or more, leading the way for global tech. The US and Asia remain hotspots on the Titan landscape, but we believe Europe is on the cusp of its first Titan. Publicly listed Baidu has left the club, Asia marketplaces Pinduoduo and Meituan-Dianping have joined, whilst Tesla’s valuation is up 270% year-on-year to $149bn, valuing it more than the world’s biggest car maker by volume, Volkswagen (3). Emerging European Titans include Spotify, Adyen, JustEat Takeaway.com, Zalando, and Delivery Hero. Spotify has led the group for some years in becoming Europe’s first Tech Titan, but this year Adyen has overtaken Spotify as the highest valued tech company in Europe. FROM GP BULLHOUND (1) Kruppa, M.; Fontanella-Khan, J. (2020, May 28) Big Tech goes on pandemic M&A spree despite political backlash. Financial Times. Retrieved from www.ft.com. (2) See page 47 of this report for more information and sources. (3) See page 55 of this report for more information and sources MANISH MADHVANI ALESSANDRO CASARTELLI ALON KUPERMAN MANAGING PARTNER EXECUTIVE DIRECTOR EXECUTIVE DIRECTOR ADAM PAGE ALEXIS MAJOS MARIA MACIAGOWSKA VICE PRESIDENT ANALYST ANALYST 5 4 Momentum This year marks a material step up for the European tech ecosystem. The number of billion-dollar companies has almost quadrupled since 2014, with 32 companies with a combined value of $50bn added since last year, and the group is now worth $416bn, almost five times the valuation in 2014 (1). Since 2014, we have tracked the leaders through the different stages in their lifecycle: privately-held, IPO and journey as a public company, or sale to a strategic acquirer. There are now many options available to leading companies as the ecosystem has matured. Staying private for longer is now a more viable option; 64% by number of the current cohort of billion-dollar companies are still private. In terms of value, public companies and acquired ones continue to play an important role, accounting for two-thirds of the value. The ecosystem has evolved over the past six years, and companies have greater access to capital to allow them to continue growing to reach a leading position faster. This translates to strong momentum for new private unicorns: the number of new billion-dollar companies has grown by 2.5x versus 2018, of which the vast majority are still private (2). We have also seen a continued shift in the sector focus. On the momentum from last year, the number of billion-dollar Enterprise Software and Fintech companies has continued to grow. Within Enterprise Software, there is a concentration of new additions in the Storage and Cybersecurity subsectors, and for consumer internet, Marketplace models continue to dominate versus E-commerce. Geographically, the UK is still leading the way, ranking #1 by number and value. Germany has added $31bn in value to its ecosystem, driven by the public cohort’s performance, the successful IPO of Teamviewer (now valued at $9bn (3)), and four new additions crossing the $1bn valuation mark. Israel is growing fast and has generated the most billion-dollar companies in the last year, having added $17bn in value and 11 companies to bring its collection of 20 (4). Testament to the strength of the European ecosystem is the long tail of countries generating their first unicorn: Estonia with Bolt, Ukraine with GitLab, Portugal with Outsystems, Romania with UiPath, and now Lithuania with Vinted. MOMENTUM CHAPTER 1 GP Bullhound classifies the companies featured in the Titans of Tech report into four key categories: Titans, Decacorns, Unicorns, and Contenders, based on their market valuation All companies featured in this report were founded in 2000 or later The lingo and journey to $50bn A REFRESH ON THE TERMINOLOGY FOR OUR REPORT CLASSIFICATION OF COMPANIES BY VALUATION FOR FULL METHODOLOGY, PLEASE SEE PAGE 60 OF THIS REPORT TITANS $50BN+ DECACORNS $10-50BN UNICORNS $1-10BN CONTENDERS WE PREDICT TO REACH $1BN+ IN NEXT THREE YEARS (1) See page 8 of this report for more information and sources (2) See pages 8–9 of this report for more information and sources (3) See page 15 of this report for more information and sources (4) See pages 22-23 of this report for more information and sources 7 6 The number of billion-dollar companies has almost quadrupled since 2014 The ecosystem is now worth $416bn, almost five times the valuation in 2014 32 companies with a combined value of $50bn added since last year Successful tech companies in Europe now have multiple options, including staying private for longer Public markets and strategic exits continue to play their part in the growth of the ecosystem Momentum How many companies still are private? A MATERIAL STEP UP FOR EUROPEAN TECH THIS YEAR EUROPE’S LEADING TECH COMPANIES BY STATUS Source: Capital IQ, Mergermarket, Pitchbook, Crunchbase, press releases, and GP Bullhound analysis. Equity funds raised refer to capital raised through primary equity offering. Note: Cut-off date for inclusion in report 31 March 2020; valuations correct as of 14 May 2020. Source: Capital IQ, Mergermarket, Pitchbook, Crunchbase, press releases, and GP Bullhound analysis Note: Cut-off date for inclusion in report 31 March 2020; valuations correct as of 14 May 2020. AGGREGATE VALUATION BY STATUS (2020) NUMBER OF COMPANIES BY STATUS ACQUIRED 33% 19% PUBLIC PRIVATE 48% 112 COMPANIES $416BN IN VALUE 30 3 15 12 112 17 23 72 2014 2020 PRIVATE PUBLIC ACQUIRED $1BN+ AGGREGATE VALUATION TOTAL EQUITY RAISED $5BN+ COMPANIES 2014 2020 GROWTH 3.7X 112 30 4.7X $416BN $89BN 13.2X $40BN $3BN 4.2X 25 6 MOMENTUM CHAPTER 1 9 8 Europe’s leading private tech companies PRIVATE BILLION-DOLLAR COMPANIES BY VALUATION This page ranks all 72 privately-held companies in Europe’s tech ecosystem by valuation Valuations are correct as of 14 May 2020 Source: Capital IQ, Mergermarket, Pitchbook, Crunchbase, press releases, and GP Bullhound analysis Note: Cut off date for inclusion in report 31 March 2020; valuations correct as of 14 May 2020. Source: Capital IQ, Mergermarket, Pitchbook, Crunchbase, press releases, and GP Bullhound analysis Note: Cut off date for inclusion in report 31 March 2020; valuations correct as of 14 May 2020. NEW BILLION-DOLLAR COMPANY SINCE LAST REPORT OF THE TOTAL BILLION-DOLLAR COMPANIES IN EUROPE, PRIVATELY-HELD COMPANIES ACCOUNT FOR: 64% BY NUMBER 33% BY VALUE 29 NEW PRIVATE BILLION-DOLLAR COMPANIES 72 THIS YEAR 43 LAST YEAR 5 HAVE REACHED A $5BN+ VALUATION MOMENTUM CHAPTER 1 11 10 Europe’s leading public tech companies PUBLIC BILLION-DOLLAR COMPANIES BY VALUATION This page ranks all 23 public companies in Europe’s tech ecosystem by valuation, founded after 2020 Valuations are correct as of 14 May 2020 Source: Capital IQ, Mergermarket, Pitchbook, Crunchbase, press releases, and GP Bullhound analysis Note: Cut-off date for inclusion in report 31 March 2020; valuations correct as of 14 May 2020. The technology sector is very resilient and outperforming amid the COVID-19 pandemic The European cohort of public billion-dollar companies is outperforming major indices, including Nasdaq Resilience of listed European tech SHARE PRICE PERFORMANCE Source: Capital IQ, Mergermarket, Pitchbook, Crunchbase, press releases, and GP Bullhound analysis Note: Cut-off date for inclusion in report 31 March 2020; valuations correct as of 14 May 2020. NEW BILLION-DOLLAR COMPANY SINCE LAST REPORT 2020 YTD PERFORMANCE EUROPEAN TECH BILLION-DOLLAR COHORT NASDAQ EURO STOXX OF THE TOTAL BILLION-DOLLAR COMPANIES IN EUROPE, PUBLIC COMPANIES ACCOUNT FOR: 21% BY NUMBER 48% BY VALUE ADYEN OVERTAKES SPOTIFY AS THE HIGHEST VALUED EUROPEAN LEADER 14 HAVE REACHED A $5BN+ VALUATION +19% YTD EUROPEAN TECH BILLION-DOLLAR COHORT -2% NASDAQ -25% EURO STOXX Combined entity Just Eat Takeaway.com tracked in our public company cohort MOMENTUM CHAPTER 1 13 12 2.5x growth versus 2018 IN NUMBER OF NEW BILLION-DOLLAR COMPANIES 32 new companies have reached a billion-dollar valuation in the last 12 months The value has almost tripled from 2018 to 2020 Source: Capital IQ, Mergermarket, Pitchbook, Crunchbase, press releases, and GP Bullhound analysis Note: Cut-off date for inclusion in report 31 March 2020; valuations correct as of 14 May 2020. Europe’s leading acquired tech companies ACQUIRED BILLION-DOLLAR COMPANIES BY VALUATION This page ranks all 17 acquired companies in Europe’s tech ecosystem by valuation Valuations correct as of 14 May 2020 Source: Capital IQ, Mergermarket, Pitchbook, Crunchbase, press releases, and GP Bullhound analysis Note: Cut-off date for inclusion in report 31 March 2020; valuations correct as of 14 May 2020. NEW BILLION-DOLLAR COMPANY SINCE REPORT CUT-OFF $50BN $36BN $18BN OF THE TOTAL BILLION-DOLLAR COMPANIES IN EUROPE, ACQUIRED COMPANIES ACCOUNT FOR: 15% BY NUMBER 19% BY VALUE 0 NEW PRIVATE BILLION-DOLLAR COMPANIES 6 ACQUIRED FOR MORE THAN $5BN+ VALUATION 13 22 32 2018 2019 2020 All publicly listed companies where the market capitalisation has fallen below $1bn IN:32 OUT:5 MOMENTUM CHAPTER 1 15 14 Introducing THE NEW KIDS ON THE BLOCK Source: Capital IQ, Mergermarket, Pitchbook, Crunchbase, LinkedIn, press releases, and GP Bullhound analysis Note: Cut-off date for inclusion in report 31 March 2020; valuations correct as of 14 May 2020. Continued shift in sector focus EUROPEAN BILLION-DOLLAR COMPANIES BY SECTOR Building on last year, continued growth in the number of billion-dollar Enterprise Software & Fintech companies Within Enterprise Software, concentration of new additions in Storage and Cybersecurity subsectors In consumer internet, Marketplace models continue to win in the consumer battle versus E-commerce Source: Capital IQ, Mergermarket, Pitchbook, Crunchbase, press releases, and GP Bullhound analysis Note: Cut-off date for inclusion in report 31 March 2020; valuations correct as of 14 May 2020. 2019 2020 NEW ADDITIONS 4 44 16 ENTERPRISE SOFTWARE 22 6 MARKETPLACES 18 7 FINTECH 15 2 DIGITAL MEDIA 9 E-COMMERCE 1 OTHER +57% +38% +64% +15% - +33% ENTERPRISE SOFTWARE FINTECH MARKETPLACES OTHER DIGITAL MEDIA $5.0BN $3.3BN $1.9BN $1.8BN $1.6BN $1.4BN $1.2BN $1.1BN $1.1BN BACKUP SOLUTIONS THAT DELIVER CLOUD DATA MANAGEMENT CLOUD COMMUNICATION PLATFORM-AS-A- SERVICE PRODUCTIVITY PLATFORM ALLOWING TEAMS TO CREATE AND SHAPE PROJECTS AND WORKFLOWS, CODE FREE AUTOMATION SOFTWARE PROVIDER THAT OFFERS REMOTE MANAGEMENT SOFTWARE MOBILE AD ATTRIBUTION PLATFORM ALLOWING ADVERTISERS TO ANALYSE ADVERTISING CAMPAIGNS COLLABORATIVE DATA SCIENCE SOFTWARE PLATFORM TO ENABLE AI SOLUTIONS IN ENTERPRISES APPLICATION SECURITY TESTING SOFTWARE PROVIDING ORGANISATIONS WITH SAFER DEVELOPING ENVIRONMENTS AI-BASED ENDPOINT SECURITY PLATFORM ACHIEVING THREAT DETECTION AND PROTECTION IN REAL-TIME AGENTLESS DEVICE SECURITY SOLUTIONS FOR THE WORLD OF UNMANAGED AND UN-AGENTABLE DEVICES THAT LET ENTERPRISES SEE AND CONTROL ANY DEVICES OR NETWORK INSIGHT PARTNERS PUBLICLY LISTED SAPPHIRE VENTURES, HAMILTON LANE, HARBOURVEST PARTNERS, ION CROSSOVER PARTNERS, VINTAGE INVESTMENT PARTNERS TPG, INSIGHT PARTNERS GENERAL ATLANTIC, GOLDMAN SACHS, QUMRA CAPITAL, DEUTSCHE TELEKOM CAPITAL PARTNERS, PITANGO VENTURE CAPITAL, MAGMA VENTURE PARTNERS CAPITALG, ICONIQ, BATTERY VENTURES, DAWN CAPITAL, ALVEN CAPITAL, FIRSTMARK CAPITAL INSIGHT PARTNERS, HELLMAN & FRIEDMAN, TPG, K1 INVESTMENT MANAGEMENT INSIGHT PARTNERS, TIGER GLOBAL MANAGEMENT, QUALCOMM VENTURES, VISTA EQUITY, THIRD POINT VENTURES INSIGHT PARTNERS, CAPITALG, SEQUOIA CAPITAL ISRAEL, BAIN CAPITAL VENTURES VALUATION RECENT INVESTORS KEY INFORMATION ABOUT FOUNDED: 2006 EMPLOYEES: C.3,900 SECTOR: SOFTWARE FOUNDED: 2008 EMPLOYEES: C.700 SECTOR: SOFTWARE FOUNDED: 2012 EMPLOYEES: C.500 SECTOR: SOFTWARE FOUNDED: 2000 EMPLOYEES: C.750 SECTOR: SOFTWARE FOUNDED: 2011 EMPLOYEES: C.950 SECTOR: SOFTWARE FOUNDED: 2013 EMPLOYEES: C.500 SECTOR: SOFTWARE FOUNDED: 2006 EMPLOYEES: C.700 SECTOR: SOFTWARE FOUNDED: 2013 EMPLOYEES: C.550 SECTOR: SOFTWARE FOUNDED: 2015 EMPLOYEES: C.320 SECTOR: SOFTWARE $1.3BN WEB-BASED ACCOUNTING AND INVOICING SOLUTIONS PUBLICLY LISTED FOUNDED: 2001 EMPLOYEES: C.290 SECTOR: SOFTWARE NUMBER OF BILLION-DOLLAR COMPANIES BY SECTOR MOMENTUM CHAPTER 1 17 16 Introducing Introducing THE NEW KIDS ON THE BLOCK THE NEW KIDS ON THE BLOCK Source: Capital IQ, Mergermarket, Pitchbook, Crunchbase, LinkedIn, press releases, and GP Bullhound analysis Note: Cut-off date for inclusion in report 31 March 2020; valuations correct as of 14 May 2020. Source: Capital IQ, Mergermarket, Pitchbook, Crunchbase, LinkedIn, press releases, and GP Bullhound analysis Note: Cut-off date for inclusion in report 31 March 2020; valuations correct as of 14 May 2020. $1.1BN OPEN BANKING PLATFORM FOR DEPOSITS BY CONNECTING BANKS AND DEPOSITORS VITRUVIAN PARTNERS, KINNEVIK AB, VALAR VENTURES, DEUTSCHE BANK, FOUNDERS FUND FOUNDED: 2011 EMPLOYEES: C.210 SECTOR: FINTECH $1.0BN $2.0BN $2.0BN $1.0BN $1.0BN $1.0BN $1.0BN $3.0BN $1.3BN $1.0BN CUSTOMER-CENTRIC FINANCIAL SERVICES COMPANY ENABLING CUSTOMERS TO MANAGE THEIR EXISTING BANK ACCOUNTS AND PERSONAL FINANCES ONLINE BUS TRANSPORTATION SERVICES NETWORK PROVIDER OF AFFORDABLE & ACCESSIBLE HEALTHCARE SERVICES BY COMBINING AI WITH DOCTORS ON-DEMAND PHOTO PLATFORM WITH AI-POWERED PHOTOGRAPHY EDITING SERVICES ON-DEMAND DELIVERY APP PLATFORM OPERATING IN EUROPE, LATAM, AND AFRICA SOCIAL MARKETPLACE FOR PRE-LOVED CLOTHING MARKETPLACE FOR DISCOVERING AND BOOKING TRAVEL TOURS, TICKETS FOR ATTRACTIONS AND EXPERIENCES FAMILY OF BRANDS THAT BUILT, OWN AND OPERATE BADOO, BUMBLE, CHAPPY, AND LUMEN GAME DEVELOPMENT COMPANY FOCUSED ON IOS, ANDROID AND FACEBOOK PLATFORMS DIGITAL WRITING ASSISTANT TO HELP PEOPLE WRITE MORE CLEARLY AND EFFECTIVELY PRIVATE INVESTORS, INVESTMENT CORPORATION OF DUBAI SILVER LAKE PARTNERS, PERMIRA, TCV, GENERAL ATLANTIC, BALLIE GIFFORD, LUXOR CAPITAL GROUP, BLACKROCK, DAIMLER SAUDI ARABIA’S PUBLIC INVESTMENT FUND, KINNEVIK AB, VOSTOK NEW VENTURES, ERGO FUND EURAZEO, PRIME VENTURES, AVENIR GROWTH, GLOBAL FOUNDERS CAPITAL, AGLAÉ VENTURES MUBADALA VENTURES, DELIVERYHERO, IDINVEST PARTNERS, LAKESTAR, GP BULLHOUND LIGHTSPEED VENTURE PARTNERS, ACCEL, INSIGHT PARTNERS, SPRINTS CAPITAL, BURDA PRINCIPAL INVESTORS SOFTBANK, TEMASEK HOLDINGS, LAKESTAR, HEARTCORE CAPITAL THE BLACKSTONE GROUP INSIGHT PARTNERS GENERAL CATALYST, SPARK CAPITA PARTNERS, INSTITUTIONAL VENTURE PARTNERS FOUNDED: 2012 EMPLOYEES: C.60 SECTOR: FINTECH FOUNDED: 2012 EMPLOYEES: C.1,500 SECTOR: MARKETPLACE FOUNDED: 2013 EMPLOYEES: C.1,300 SECTOR: MARKETPLACE FOUNDED: 2016 EMPLOYEES: C.1,180 SECTOR: MARKETPLACE FOUNDED: 2015 EMPLOYEES: C.2,800 SECTOR: MARKETPLACE FOUNDED: 2008 EMPLOYEES: C.450 SECTOR: MARKETPLACE FOUNDED: 2009 EMPLOYEES: C.810 SECTOR: MARKETPLACE FOUNDED: 2006 EMPLOYEES: C.1,500 SECTOR: DIGITAL MEDIA FOUNDED: 2011 EMPLOYEES: C.360 SECTOR: DIGITAL MEDIA FOUNDED: 2009 EMPLOYEES: C.420 SECTOR: OTHER VALUATION RECENT INVESTORS KEY INFORMATION ABOUT $2.0BN $1.9BN $1.6BN $1.2BN ONLINE PAYMENTS PLATFORMS ALLOWING COMPANIES TO TRACK AND SECURE DIGITAL PAYMENTS THROUGH ONE INTEGRATION DIGITAL PLATFORM THAT CONNECTS INSURANCE PROVIDERS, DISTRIBUTORS AND CONSUMERS ONLINE TRADING PLATFORM OFFERING CFDS ACROSS A VAST ARRAY OF SECURITIES AND ASSET CLASSES FINTECH-AS-A-SERVICE PLATFORM THAT PROVIDES LOCAL PAYMENTS NETWORK SERVICES GIC, DST GLOBAL, INSIGHT PARTNERS, BLOSSOM CAPITAL OMERS VENTURES, MUBADALA VENTURES, TARGET GLOBAL, SALESFORCE VENTURES, MERIAN CHRYSALIS PUBLICLY LISTED GENERAL CATALYST, STRIPE, COATUE MANAGEMENT FOUNDED: 2012 EMPLOYEES: C.590 SECTOR: FINTECH FOUNDED: 2015 EMPLOYEES: C.200 SECTOR: FINTECH FOUNDED: 2008 EMPLOYEES: C.350 SECTOR: FINTECH FOUNDED: 2015 EMPLOYEES: C.180 SECTOR: FINTECH $1.0BN $1.0BN $1.0BN $1.0BN CYBERSECURITY COMPANY THAT OFFERS SAFETY, ACCESSIBILITY, PRIVACY, AUTHENTICITY, AND SECURITY SERVICES CYBERSECURITY FIRM HELPING FIND AND FIX VULNERABILITIES IN OPEN SOURCE DEPENDENCIES AND CONTAINER IMAGES E-COMMERCE FRAUD-PREVENTION AND CONVERSION SOLUTIONS FOR ONLINE RETAILERS COMPANY DEVELOPING VIDEO AND IMAGE EDITING MOBILE APPS, KNOWN PARTICULARLY FOR ITS SELFIE-EDITING APP, FACETUNE GOLDMAN SACHS STIPES GROUP, SALESFORCE VENTURES, COATUE MANAGEMENT, TIGER GLOBAL MANAGEMENT, ACCEL PARTNERS GENERAL ATLANTIC, PITANGO, FIDELITY MANAGEMENT & RESEARCH, WINSLOW CAPITAL MANAGEMENT INSIGHT PARTNERS, GOLDMAN SACHS, CALTECH, VIOLA VENTURES FOUNDED: 2008 EMPLOYEES: C.1,325 SECTOR: SOFTWARE FOUNDED: 2015 EMPLOYEES: C.300 SECTOR: SOFTWARE FOUNDED: 2012 EMPLOYEES: C.500 SECTOR: SOFTWARE FOUNDED: 2013 EMPLOYEES: C.260 SECTOR: SOFTWARE $2.0BN DIGITAL PROPERTY AND CASUALTY INSURANCE PLATFORM POWERED BY AI SOFTBANK, ALLIANZ, GENERAL CATALYST, GV, OURCROWD, THRIVE CAPITAL FOUNDED: 2015 EMPLOYEES: C.325 SECTOR: FINTECH $1.1BN $1.0BN BUSINESS INTELLIGENCE SOFTWARE AND ANALYTICS PLATFORM THAT ENABLES NON-TECHNICAL USERS TO JOIN AND ANALYSE LARGE DATA SETS WEB-BASED SPEND AND SUPPLIER MANAGEMENT SOLUTIONS INSIGHT PARTNERS, BATTERY VENTURES, BESSEMER VENTURE PARTNERS, DFJ GROWTH KOHLBERG KRAVIS ROBERTS, TIGER GLOBAL MANAGEMENT, ARDIAN FOUNDED: 2005 EMPLOYEES: C.800 SECTOR: SOFTWARE FOUNDED: 2000 EMPLOYEES: C.530 SECTOR: SOFTWARE VALUATION RECENT INVESTORS KEY INFORMATION ABOUT MOMENTUM CHAPTER 1 ENTERPRISE SOFTWARE FINTECH MARKETPLACES OTHER DIGITAL MEDIA ENTERPRISE SOFTWARE FINTECH MARKETPLACES OTHER DIGITAL MEDIA 19 18 EXPERT VIEW PETER MCKAY Expert view: Snyk PETER MCKAY CEO OF SNYK Having a new CEO can be challenging for any company. Guy Podjarny, Snyk’s Founder, and I became friends 18 years ago when I was CEO of a company that acquired a company which Guy was involved with. Over the years, Guy and I worked on various ventures and I invested early in Snyk because I loved its unique model to address challenges in the security space. The business has grown consistently, has tremendous product-market fit, and is incredibly scalable. When he asked me to come on as CEO, I knew it would be a challenge and I also knew that our team would work really well together and the business is benefiting from that. Cybersecurity has seen tremendous growth, largely driven by more companies digitalising their businesses. More traditional industries such as oil and gas, healthcare, financial services and media are all shifting to becoming more technology oriented. With this digital transformation, more software means more software risk. Simply put, cybersecurity solutions cannot keep up with the pace of change. The application security tools used in the past are not scalable enough to solve today’s cybersecurity issues at scale. We empower developers by embedding security in the application development lifecycle. We provide an end-to-end security suite for developers, and increasingly more of the top software companies around the world are using our platform as their main solution. This space is extremely fragmented, and our vision is to expand our product roadmap both organically and inorganically. The past two fundraising rounds, which were pre-empted by our investors, and those who joined our board, have all been incredibly valuable in driving and scaling the business. We believe this outside view of the broader ecosystem is critical to positioning ourselves in the market. Snyk has always been financially responsible and with our latest fundraise we are fortunate enough to have a robust balance sheet. Since the beginning of the pandemic, we have shifted our focus away from those industries that were affected the most, such as airlines, hospitality and travel, to those benefitting from the acceleration of digital transformation. Our model has also proven its resilience: we are virtual, with low-cost sales, and by leveraging our open source community model, our speed and agility have allowed us to get ahead of the crisis. With this, we should be able to accelerate our product roadmap faster and distance ourselves from our competitors. One of the most important processes at Snyk is recruitment; we want top talent that fits our culture. As we continue to grow, our goal is to maintain our organisation’s diverse, multicultural, global mind-set, where people work well together, care deeply about each other, and have fun on this journey. My advice for entrepreneurs is to start with the problem and focus on solving it rather than starting with great technology and looking for a problem to solve. CEOs should balance technological innovation that solves real issues with a unique, efficient go-to-market strategy; today’s consumers want innovative products that are easy to try with a frictionless sale. 21 20 Champions league BILLION-DOLLAR STABLES Source: Capital IQ, Mergermarket, Pitchbook, Crunchbase, press releases, and GP Bullhound analysis Note: Cut-off date for inclusion in report 31 March 2020; valuations correct as of 14 May 2020. The UK is still leading the way, being #1 by number and value of unicorns Germany adds $31bn in value to its ecosystem, driven by performance of public cohort, the successful IPO of Teamviewer and four new additions crossing the $1bn valuation mark Israel is growing fast, adding $17bn in value and 11 companies in 2020 Europe’s tech factories Source: Capital IQ, Mergermarket, Pitchbook, Crunchbase, press releases, and GP Bullhound analysis Note: Cut-off date for inclusion in report 31 March 2020; valuations correct as of 14 May 2020. Israel has generated the most billion-dollar companies in the last year, adding 11 to its collection of 20 Wide distribution of new additions, with unicorns from new countries such as Vinted in Lithuania NEW BILLION-DOLLAR COMPANIES NEW BILLION-DOLLAR COMPANIES BY GEOGRAPHY CUMULATIVE VALUE # OF BILLION $ COMPANIES RISING STARS # OF BILLION $ COMPANIES CUMULATIVE VALUE NET EVOLUTION VERSUS PREVIOUS YEAR 10 $70BN +2 4 $54BN - 20 $48BN +11 30 $87BN +3 16 $71BN +3 $14.8BN 11 $11.0BN 6 $6.0BN 4 $7.0BN 3 $3.4BN 3 $4.6N 2 $1.0BN 1 $1.0BN 1 $1.0BN 1 MOMENTUM CHAPTER 1 23 22 Vinted, a social marketplace where consumers can buy and sell second-hand fashion, recently raised $141m and passed the billion-dollar valuation mark, making it one of the biggest startups to come out of the Baltics Home to over six million people, the Baltic countries – Estonia, Latvia and Lithuania – are launching forward-looking initiatives to help founders create and develop some of Europe’s category leaders Lithuania’s first unicorn: Vinted EUROPE’S LARGEST & FASTEST GROWING PRE-LOVED FASHION MARKETPLACE Source: Dealroom, Mium, Techcrunch, and Forbes. All metrics were public as of the date of the latest fundraise, November 2019 Innovation in hardware CPU, including on-device mobile processors, has enabled the development of a wide array of content creation tools at scale In-app AI and machine learning algorithms allow consumers to have the creative freedom that previously required labour-intensive specialist designers The democratisation of content creation FROM SPECTATOR TO ACTOR Source: Source: Capital IQ, Mergermarket, Pitchbook, Crunchbase, press releases, and GP Bullhound analysis In 2008, Vinted was founded as a second-hand clothing marketplace with a community edge, capitalising on the rise of the ‘circular economy’ and the growing rejection of fast fashion In 2016, the company shifted away from mandatory sales fees into a free product with the option of additional paid services, distancing itself from the eBay’s of the world with incredible results FOUNDING THE PIVOT TODAY 25M USERS 180M PRODUCTS 11 MARKETS $1BN VALUATION €1.3BN GMV $260M RAISED Meero provides its customers with enhanced photography services, so they can focus on creativity This is thanks to an AI-driven photograph enhancement software It reduces post-production work from up to four hours to just a few seconds Lightricks is a consumer-focused photo editing applications All the apps are designed to be easy to use Just launched BoostApps – a suite of new mobile apps aimed at small businesses that want professional content creation tools One of the first app developers to pioneer the subscription model on the App Store PHOTO EDITING AND CREATION AT YOUR FINGERTIPS ON A MISSION TO MAKE PHOTOGRAPHY SEAMLESS +230% INCREASE IN MONTHLY SALES +5X GROWTH IN REVENUE MOMENTUM CHAPTER 1 $1BN VALUATION $205M RAISED TO DATE 3M PAYING SUBSCRIBERS 200M+ DOWNLOADS $1BN VALUATION $293M RAISED TO DATE 10.5M PHOTOS TAKEN 31K CUSTOMERS 25 24 CHAPTER 2 SECTOR INSIGHTS Sector insights We track Europe’s tech leader trends year-on-year to serve not only as a barometer of the health of the European ecosystem, but also to shine a light on the latest trends. This year we note the resilience of listed European tech through the COVID-19 pandemic, the dominance of security within the new cohort of Enterprise Software billion-dollar companies, and the clear growth of Marketplace models in the long-term battle for consumers. Economic crises typically bring highly valued stocks back to earth. The flight-to-quality that follows usually hurts companies with stretched valuations the most, as investors worry about a collapse in the growth rates that have supported high valuations to date. The technology sector has proven very resilient, outperforming the wider market in the recent market correction. Major indices such as the EURO STOXX are down c25% YTD, with the tech-heavy Nasdaq down c2% YTD as at time of writing (1). However, our cohort of public billion-dollar companies has proven incredibly resilient, up by 19% YTD. We note continued growth in the number of Enterprise Software companies reaching the $1bn mark, with 16 out of 32 total new additions (2). Within this cohort there is a clear lean towards security, as 50% of the new enterprise software unicorns provide storage or cybersecurity solutions. Protecting the digital world has major challenges due to the complexity caused by the rapid growth in number of systems and multiple locations, with enterprises betting big on hybrid and multi-cloud as they continue to invest in multiple cloud platforms. All of this in a world of increasingly sophisticated hackers requires next-generation security solutions in order to allow businesses to embrace digital transformation whilst keeping sensitive data safe. As worldwide lockdowns challenge the usual way of working in offices, many experts anticipate that the largest-ever remote work experiment could give rise to a variety of data management challenges, supercharging the storage and cybersecurity industry in the process. In the past six years, the growth in value generated by Marketplace models has significantly outpaced E-commerce due to the inherent network effects and possibility to deliver services as well as goods; we note a 4.1x increase in the value of our marketplace billion-dollar cohort between 2014 and 2020 (3). Most of the sector’s value has historically been concentrated in classifieds, restaurant and travel marketplaces, but recently there has been huge growth in vertically integrated marketplaces 2.0 (fashion, restaurants, etc.) and services (mobility, healthcare, and leisure). Classifieds have materially declined as a proportion of total value, as they monetise less of the transaction and offer a less compelling customer experience. At the same time, behavioural trends are reshaping the next generation of consumption as consumers move from general browsing towards a task-to-be-done mentality, starting with the specialisation of search. Driven by consumer demand for specialisation we have tracked the rise of customer-centric marketplaces offering a more complete end- to-end offering. (1) As of 14 May 2020 (2) See page 28 of this report for more information and sources (3) See page 32 of this report for more information and sources 27 26 Significant increase in Enterprise Software companies with 16 new additions in the last year Considerable investment in Storage and Cybersecurity, accounting for c.50% of new additions Security dominates NEW ENTERPRISE SOFTWARE BILLION-DOLLAR COMPANIES Source: Capital IQ, Mergermarket, Pitchbook, Crunchbase, press releases, and GP Bullhound analysis Note: Cut-off date for inclusion in report 31 March 2020; valuations correct as of 14 May 2020. Source: Capital IQ, Mergermarket, Pitchbook, Crunchbase, Flexera State of the Cloud (2020), press releases, and GP Bullhound analysis Note: Cut-off date for inclusion in report 31 March 2020; valuations correct as of 14 May 2020. Enterprises betting big on multi-cloud CLOUD STRATEGIES CONTINUE TO EVOLVE Enterprise companies investing in multiple cloud platforms, with public cloud continuing to grow Growth in number of devices and complexity of systems that enterprises must now manage creates the need for next-generation Storage and Cybersecurity solutions The workplace is changing fast, particularly with remote working, and initial expectations suggest that the COVID-19 pandemic will continue to affect companies’ cloud usage over the longer-term as there is a shift towards a ‘working anywhere’ culture NEW ENTERPRISE SOFTWARE COMPANIES BY VALUE ENTERPRISE CLOUD STRATEGY CHANGE FROM PLANNED CLOUD USAGE DUE TO COVID-19 SIGNIFICANTLY LOWER SLIGHTLY LOWER SLIGHTLY HIGHER SIGNIFICANTLY HIGHER 2% 2% 2% 8% 9% 4% 31% 29% 37% 26% 30% 13% TOTAL ENTERPRISE SMB 16 NEW COMPANIES $25BN+ IN VALUE c.50% are providing storage and cybersecurity solutions 13% 13% 17% 4% 6% 7% 10% 30% STORAGE CYBERSECURITY COMMUNICATION FINANCE DATA ANALYTICS COLLABORATION MARKETING CONTENT SINGLE PUBLIC SINGLE PRIVATE MULTI-CLOUD HYBRID CLOUD MULTIPLE PUBLIC 1% 6% 93% 87% 6% CHAPTER 2 SECTOR INSIGHTS 29 28 EXPERT VIEW Expert view: Acronis SERGUEI BELOUSSOV CO-FOUNDER & CEO OF ACRONIS Our founding mission was to compute with confidence – providing reliable data protection and fast recovery from any data loss. As IT has become mission-critical for every business and individual, our mission has evolved to protect all data, applications and systems. Today, Acronis provides complete cyber protection, addressing all Five Vectors of Cyber Protection; we refer to these as SAPAS: Safety, Accessibility, Privacy, Authenticity, and Security. As an entrepreneur, wherever I see challenges, I see opportunities. There have been various challenges for our business over the years, but I believe the most difficult is to stay self-disciplined, healthy, hard-working, and to do the right things for the company. There will always be challenges, but if you can manage yourself, then you manage other things. COVID-19 presents one of the exciting challenges, and we see the following effects on the business: 1) Neutral short-term: I would expect this first phase to be over by summer. Digitisation and migration to the Cloud are accelerating in many companies and employees are working from home, etc., so the need for cyber protection solutions is also increasing. We are growing very fast, and it remains to be seen if this is because of the pandemic or our execution. 2) Positive long-term: The impact is more difficult to predict. Information technology is about people being more productive in a certain way, and people will simply behave differently as a result of the pandemic. However, in any case, IT stays mission-critical and cyber protection offered by Acronis is in high demand. I believe the company strategy informs culture. We are still evolving from being a data protection vendor to a cyber protection company and from an infrastructure application to an infrastructure platform company, and that has carried a cultural shift. The five main tenets of our entrepreneurial culture are 1) stay alert, 2) never give up, 3) be attentive to details, 4) be responsive, and 5) make decisions. This has enabled us to react quickly to today’s circumstances. We are a pure technology company and we always have to be ready to change. We are still growing very rapidly, and we want to grow to $500m–1bn by 2022. As raising capital is generally a complicated process, I have never looked at fundraising as the primary way to develop the business. Although many companies in the space heavily rely on raising capital to continue growing their businesses, we focus on growing profitably, improving our products, working with partners, and marketing and promoting our brand, our products and our technology vision. We may not have grown as fast as we could have with external capital, but Acronis has always been cash-flow positive and we want to be in a position to create value this way. We recently took on investment to allow us to accelerate our growth and continue on our mission, as well as to help our partners to be profitable and grow their business together with us. My advice for entrepreneurs is that you need to be ready, and have experience and contacts. I believe you need a great business idea and it needs to be differentiated, and you need to make decisions with a lot of attention to detail – no one will spend as many hours on your idea as you. Moreover, there is no universal formula for a successful business – every company is unique. SERGUEI BELOUSSOV 31 30 Source: Capital IQ, Mergermarket, Pitchbook, Crunchbase, press releases, and GP Bullhound analysis Note: Cut-off date for inclusion in report 31 March 2020; valuations correct as of 14 May 2020. Marketplaces winning in the consumer battle GROWTH IN MARKETPLACES OUTPACES E-COMMERCE Growth in value generated by Marketplace models has significantly outpaced E-commerce Marketplaces have accelerated due to inherent network effects and possibility to also deliver services Source: Capital IQ, Mergermarket, Pitchbook, Crunchbase, press releases, and GP Bullhound analysis Note: Cut-off date for inclusion in report 31 March 2020; valuations correct as of 14 May 2020. The rise of customer-centric marketplaces EXPANSION OF VERTICALS AND ONLINE ADOPTION DRIVES SECTOR GROWTH Most of the value in the sector was historically concentrated in classifieds, restaurant and travel marketplaces; however, recently, there has been huge growth in vertically integrated marketplaces 2.0 (fashion, restaurants, etc.) and services (mobility, healthcare, and leisure) Classifieds have materially declined as a proportion of value, as they monetise less of the transaction and offer a less compelling customer experience, driven by consumer demand for specialisation of search, with marketplaces offering a more complete set of specialised products E-COMMERCE MARKETPLACE (ALL VERTICALS) VALUATION OF MARKETPLACE AND E-COMMERCE BILLION-DOLLAR COMPANIES SPLIT OF MARKETPLACE BILLION-DOLLAR COMPANIES BY VALUATION RESTAURANT CLASSIFIEDS SERVICES MOBILITY AUTOMOTIVE FASHION TRAVEL 4.1X INCREASE IN VALUE OF MARKETPLACE BILLION-DOLLAR COHORT 2017 2014 2018 2019 2015 2020 2016 8 COMPANIES $18BN IN VALUE 44% 5% 8% 9% 33% 22 COMPANIES $75BN IN VALUE 48% 4% 5% 9% 10% 7% 18% 2015 2020 CHAPTER 2 SECTOR INSIGHTS 33 32 EXPERT VIEW Expert view: Glovo OSCAR PIERRE CO-FOUNDER & CEO OF GLOVO At the beginning, I did not imagine Glovo would become so big. In my first entrepreneurial venture, I wanted to build a project from scratch that I could lead and I liked the concept of Postmates in the US, where anything in your city could be quickly delivered to your door. After spending more time with our Co-Founder Sacha Michaud, who had a lot of experience and saw the business really accelerating, we increasingly began to see the huge potential of the business. Two key inflection points contributed to this. First, Glovo was initially just an app where you could order anything you wanted with the touch of a button, and was not really growing fast. After we decided to build a marketplace, the hard work to bring McDonalds on the platform transformed the business. The profile of the business was boosted, we saw a lot of organic traffic, and lowered our delivery fee to one euro. It all skyrocketed after that. The second inflection point was realising that our model could work in multiple cities, in other countries. We had built significant market share in the delivery space in Spain and Italy by late 2017. While we could have stayed a smaller project in Europe or sold the business, we aimed higher as we realised that this was a project with unique potential. In 2018, we launched in about 14 countries. We start from zero, build at the city level and then see synergies countrywide. We easily entered Latin America, with a similar language and culture, and other countries we thought attractive. We learned many lessons along the way: it is a very local business, so competitive dynamics matter at the city and state level, do not enter a region if you are not the first mover unless you have a lot of cash or local operators are poor, and quickly shut down if things are not working. Usually the economics do not work if you are not the market leader. For us, food delivery is a massive entry point of user acquisition and it generates a lot of engagement. Our vision is to be relevant on many more categories related to local services. For example, we quickly expanded our grocery delivery programme as a response to the lockdowns in our cities, and are looking at opening in new categories, for example in events and ticketing. Our goal is offering more services, making the life of every citizen easier. We had many challenges over the years, and one of the biggest has been fundraising. We were a small company from Barcelona when Spanish venture capital was still early, and the investor mind-set was extremely different from the US. Our focus has not been on maximising valuations, but on partnering with teams that can really help the business. Another challenge was strengthening our tech brand positioning. We have massive product development and need to attract top engineers internationally. We are actively hiring from all over the world, and we need to continue hiring to get where we want to be. Our culture is very important to us and has remained the same so far: we are transparent and as the underdog remain humble and believe in intuition. We also care a lot more about the upside than the potential downside. Cultural fit is paramount, and we see that individuals who do not fit these values are quickly rejected by the rest of the team. As many entrepreneurs, two things excite and motivate me: impact and building. We have 100,000 couriers and millions of users across the world, and it is exciting to build products for them. I do not think everyone should be an entrepreneur; it is difficult and even if you have an amazing team, you need luck. With the ongoing COVID-19 crisis, I think governments will look at our platform in a different way and our model can evolve to continue fulfilling our mission: to deliver anything anywhere. OSCAR PIERRE 35 34 CHAPTER 3 Europe’s Next Generation EUROPE’S NEXT GENERATION How did we do? Source: Capital IQ, Mergermarket, Pitchbook, Crunchbase, LinkedIn, press releases, and GP Bullhound analysis 70% of the companies we ranked in 2018 as the most likely to become a unicorn have reached a >$1bn valuation in the past 48 months THE 2018 TOP 10 CONTENDERS The following chapter considers the businesses that are nearing the billion-dollar threshold. We aim to highlight the companies that are demonstrating the greatest ambition and taking the largest risks, as well as the countries and sectors that are set to propel the most companies into the billion-dollar category. We analysed more than 700 European startups that have raised over $20m since 2014 to obtain the top 50 companies with the most potential to become billion-dollar companies in the next three years. Our analysis considered three important factors. The first was scale – the amount of capital raised and the company’s headcount. The second was velocity – growth in capital raised and headcount. Finally, we looked at sentiment – we ran a survey among top European VCs to choose the companies they believe to have the highest potential of reaching billion-dollar status. So, how did we do compared to 2018? Looking back, 70% of the top contenders of 2018 are unicorns today and many of our other predictions are on a clear path to reaching the billion-dollar mark. Among this cohort were notable Enterprise Software companies such as AppsFlyer, and Fintech giants such as N26 or iZettle. The unicorns of tomorrow will continue to be drawn from a diverse spread of sectors and geographies. We predict that certain sectors and countries will continue to have an edge in the creation of unicorns; however, we believe that regions such as Israel or the Baltics will keep growing fast. Enterprise Software and Fintech continue to lead the charge towards Titan status in terms of sectors on the rise. Meanwhile, the UK and France, as well as Germany would likely remain the country hotspots where the Titans of tomorrow find their feet. ALL COMPANIES ANALYSED COMPLY WITH THE FOLLOWING CRITERIA: TECH COMPANIES ONLY, WITH A BIAS TOWARDS INTERNET / SOFTWARE (CLEANTECH AND BIOTECH ARE EXCLUDED IN OUR ANALYSIS) HEADQUARTERED IN EUROPE (INCL. ISRAEL) FOUNDED IN 2000 OR LATER RAISED $20M+ OR HAD AN ENTERPRISE VALUE OF $400M+ FROM 2014 ONWARDS EXCEPTIONS MADE FOR SEVERAL FAST-GROWING COMPANIES OUR FORMULA TO ASSESS THE CONTENDERS IS DATA-DRIVEN: SCALE (1/3): CAPITAL RAISED OVER THE LAST THREE YEARS AND HEADCOUNT AS AT MARCH 2020 VELOCITY (1/3): GROWTH IN CAPITAL RAISED IN 2020 VS. 2019 AND GROWTH IN HEADCOUNT BETWEEN MARCH 2017-20 SENTIMENT (1/3): CROWDSOURCED FROM THE EUROPEAN VC COMMUNITY AND THE GP BULLHOUND TEAM 2020 7/10 ARE NOW UNICORNS 2018 TOP 10 $3.5bn $1.6bn $1bn $1.6bn $2.3bn $2.2bn OUR BILLION-DOLLAR CONTENDERS $2.5bn 37 36 Source: Capital IQ, Mergermarket, Pitchbook, Crunchbase, LinkedIn, press releases, and GP Bullhound analysis The GP Bullhound team analysed more than 700 European startups that have raised over $20m since 2014 to identify the top 50 companies with the most potential to become billion-dollar companies in the next three years All of these companies were assessed by GP Bullhound’s team for scale, velocity and sentiment, from which we have generated a top 50 ranking of the most promising European startups Europe’s most promising startups THE 2020 TOP 50 CONTENDERS Source: Capital IQ, Mergermarket, Pitchbook, Crunchbase, LinkedIn, press releases, and GP Bullhound analysis The next European billion-dollar company? THE 2020 TOP 10 CONTENDERS From our ranking of Europe’s top 50 contenders, the top 10 European startups that have the potential to become billion-dollar companies in the next three years are highlighted below For the sentiment, scores for the top 10 companies are rebased as a percentage of the leading company of that metric (100%) 100% 99% 97% 97% 92% 91% 91% 91% 84% 80% RANKING BY SENTIMENT SCORE CHAPTER 3 EUROPE’S NEXT GENERATION 2020 OVERALL RANK 39 38 The next European billion-dollar company? BY GEOGRAPHY AND SECTOR We analysed the top 50 contenders and plotted them by sector and geography to create a heat map that sheds light on which countries or industries are most likely to produce the next billion-dollar companies Enterprise SaaS, Fintech and Cybersecurity, and the UK, France, DACH, and the Nordics appear to be the most represented Source: Capital IQ, Mergermarket, Pitchbook, Crunchbase, LinkedIn, press releases, and GP Bullhound analysis EXPERT VIEW - CONTENDERS Expert view: Contenders TIM SADLER JEAN-CHARLES SAMUELIAN ALEXANDRE PROT CO-FOUNDER & CEO TESSIAN CO-FOUNDER & CEO ALAN CO-FOUNDER & CEO QONTO “My co-founders and I started Tessian in 2013. We saw that organisations were spending billions of dollars on cybersecurity solutions to protect their networks and devices, but did not make that same investment in protecting the human element. Our Human Layer Security platform uses machine learning to automatically protect employees on email from risks such as data exfiltration, accidental loss and phishing attacks. We believe the most effective security solutions empower people to work safely, without impeding productivity. Since 2013, we’ve raised $60m in funding from investors such as Sequoia and Accel, opened offices in London and San Francisco, and were fortunate enough to have our investors’ guidance to help us continue growing. Europe is a hotbed for tech superstars, with a wealth of talent to support tech start-ups like Tessian continue to innovate, and there is much opportunity for European tech start-ups to be successful globally.” - TIM SADLER, CO-FOUNDER & CEO, TESSIAN “We co-founded Alan in 2016 with Charles Gorintin, after experiencing both personal and professional frustration with the healthcare system. Some of the pain points we saw included difficulties in accessing information and finding the right specialist due to cumbersome administrative systems. With technology we believe healthcare can be frictionless, fair and friendly for everyone. Our focus is a human-centric, preventative, digital and transparent model that allows full ownership of the patient’s wellbeing. We were the first digital health insurance company in Europe, the first independent provider licensed in France since 1986, and we are expanding in Spain and Belgium. Today we cover 80,000 members from 5,000 companies, and offer services beyond insurance, such as proactive care, finding the right doctor, and quicker responses. The COVID-19 pandemic has reinforced our vision, as the increasing demand for digital, compliant and compassionate health services has started to drive a big shift that we think we are very well positioned to lead with our international team.” - JEAN-CHARLES SAMUELIAN, CO-FOUNDER & CEO, ALAN “The idea for Qonto came from our frustration with traditional banks: pricing lacked transparency, services were not seamless, and while some neobanks addressed consumer banking, there was no adequate solution for businesses. Focussing on these issues and the needs of SMBs, we started Qonto in 2017. My co-founder and I have known each other since secondary school, but most importantly together started our previous business, smok.io; we clearly faced challenges in dealing with traditional banks with that company. Although businesses in Europe face different regulations and environments in the various countries, fintech startups have the benefit of single license banking, which makes operating in Europe similar to that of a large single market, such as the US. We operate in France, Italy, Spain and Germany using one license that can be passported according to EU regulations. I believe Covid-19 has expedited the adoption to fully digital banking services. While larger banks often need M&A to expand, we have the advantage of starting with a clean slate and offer comparable services to everyone where we operate. With our localised approach, the mission remains: seamless services, more transparency, and lower costs. - ALEXANDRE PROT, CO-FOUNDER & CEO, QONTO CHAPTER 3 41 40 EXPERT VIEW Expert view: Vivatechnology JULIE RANTY MANAGING DIRECTOR OF VIVATECHNOLOGY VivaTech is Europe’s biggest startup and tech event. Our main mission is to gather under one roof all the actors of innovation, corporates, VCs and startups to collaborate and foster innovation for the common good. Today, the Covid-19 crisis is having a short-term negative impact on the cash flow of many tech players. However, at the end of the 2009 financial crisis, it was the tech sector that revived the real economy by becoming the largest contributor in terms of jobs in Europe. I am convinced that this trend will be even more apparent in this crisis. In my opinion, this crisis will push tech companies to seek to be profitable more quickly and also to be more meaningful. However, the current crisis also highlights the issue of European digital sovereignty even more clearly. European tech is at a crossroads: it has tremendous advantages with a highly skilled workforce and is leading the pack in areas such as AI, but it is also facing obstacles in terms of unifying the European market and attracting capital, which is needed to create champions. One of the most notable developments among people doing business is this generation’s quest for meaning, which is true of founders as well as of the talents who join them. We have also seen that 100% tech4good projects have the ability to scale up; for example, BackMarket and Ynsect. Since the first edition of VivaTech, we have been keen to promote tech4good initiatives, to help them grow by connecting them to corporates, investors and talents and by giving them maximum visibility. In my opinion, the Covid-19 crisis is an opportunity to accelerate these trends because it corresponds deeply to the expectations of society. This will take a lot of effort, however, because there is still a lack of available funds. Diversity in tech is also not progressing positively at the moment. Less than 10% of founders are women and less than 3% of funding is raised by women. The same is true for social diversity today. I see four concrete pathways to improving things: identify role models to encourage vocations of all kinds, help finance projects set up by female entrepreneurs and connect them with investment funds, make tech education available from an early age, and implement the extension of paternity leave. At VivaTech, we take these subjects very seriously. We launched the Female Founder Challenge two years ago, for example, and we set an objective to have 40% women speakers. We showcase very innovative startups in terms of social inclusion. We also work with Nos quartiers ont des talents to enable thousands of young people from all walks of life to discover digital professions. Europe may be the Next Big Thing. The tech4good trend is on the upswing and the number of scaleups is growing rapidly. However, VivaTech’s goal must be twofold: to support the growth of the European ecosystem, and at the same time to ensure that this growth is responsible, sustainable and inclusive. JULIE RANTY 43 42 CHAPTER 4 Late-stage funding Late-stage funding (rounds of more than $50m) is crucial in helping companies generate sufficient growth and market share to compete on a global scale. One of the historical weaknesses in the European tech ecosystem has been the lack of late-stage financing available for Europe’s technology leaders – but not anymore, as access to capital is no longer a constraint. In 2019, we note a 2.3x increase in value of late-stage funding flowing to Europe’s tech leaders, with $18.9bn invested across 135 transactions (1). Despite COVID-19, the funding environment remains robust and in 2020 YTD at time of writing, the number of transactions is double that in 2018 and in line with 2019 (2). Investors continue to be more confident than ever, deploying large sums of capital to European leaders. Where are investors putting their money? Of the cumulative $24bn invested across 2019 and 2020 YTD (183 transactions in total), the largest share of funding went to Enterprise Software (35%) and Fintech (33%) (3). Notable rounds include $200m each for Enterprise Software leaders EcoVadis, Cybereason and SentinelOne, and $500m for challenger bank Revolut (to become the jointly most valuable fintech in Europe alongside Klarna) (4). That is not to say B2B is stealing the show. Across this period, 20% was invested into Marketplaces (5). This includes $550m for Babylon Health to continue its mission of delivering affordable and accessible healthcare and $141m for Vinted to grow its sustainable pre-loved fashion marketplace (6). There are now multiple established pools of capital investing in Europe, with investments from a diverse mix of investors (from growth funds, corporates, alternative / public equities, to sovereign wealth funds) from all regions. In our view, this clearly demonstrates the level of innovation and ambition of European startups and founders with the ecosystem playing a meaningful role in bringing innovation to the market globally. This record level of investment bodes well for the future of European tech. Well-funded leaders now have robust balance sheets to continue pursuing growth and expansion, whilst others have the required access to capital to stay the course through the COVID-19 pandemic. LATE-STAGE FUNDING (1) See page 46 of this report for more information and sources (2) See page 47 of this report for more information and sources (3) See page 50 of this report for more information and sources (4) See pages 10-11 for sources (5) See page 50 for sources (6) See page 24 for sources 45 44 Significant growth in late-stage funding rounds in Europe, with a 2.3x increase in combined value from 2018 to 2019 Availability of capital is no longer a constraint in Europe 130% growth in late-stage funding SIGNIFICANT INCREASE IN CAPITAL FOR EUROPEAN TECH LEADERS Source: Capital IQ, Mergermarket, Pitchbook, Crunchbase, press releases, and GP Bullhound analysis Note: Investments greater than $50m between 1 January 2017 and 31 December 2019. $100M+ ROUNDS $50M+ ROUNDS NUMBER OF DEALS $6.8BN $8.1BN $18.9BN 2017 2018 2019 53 73 135 2.3X INCREASE IN VALUE OF LATE-STAGE FUNDING IN EUROPE CHAPTER 4 Despite the COVID-19 pandemic, activity levels and capital raised remain robust year-to-date Investors remain confident in deploying capital to European leaders 2020 year-to-date is double 2018 FUNDING ENVIRONMENT IN EUROPE REMAINS ROBUST THROUGH MAY 2020 Source: Capital IQ, Mergermarket, Pitchbook, Crunchbase, press releases, and GP Bullhound analysis Note: Investments greater than $50m between 1 January 2017 and 14 May for each year. 24 44 48 2018 2019 2020 $6.6BN $5.1BN $2.7BN CAPITAL RAISED AND NUMBER OF DEALS BETWEEN 1 JANUARY AND 14 MAY LATE-STAGE FUNDING 47 46 EXPERT VIEW Expert view: Intercom DES TRAYNOR CO-FOUNDER & CHIEF STRATEGY OFFICER OF INTERCOM In 2011, my Intercom co-founders and I worked together at Contrast, a design consultancy agency that we also co-founded. We built products on the side, one of which was a developer toolkit, Exceptional. As an internet business, we struggled to personally connect with our customers. After building a small speech bubble feature into Exceptional that popped up when people logged in, we realised this tool solved a universal problem all internet businesses faced: talking to and building relationships with customers. We then sold Exceptional and focused on that product, which is now Intercom. Our vision is to develop technology that would let internet businesses build great relationships with their customers in a personal and engaging way, all real-time. When we founded Intercom back in 2011, companies such as WhatsApp and Facebook Messenger started to emerge, and we saw consumers’ preference for chat and messaging come to life. We did not believe this preference was only contained to C2C communication and we wanted to build something that would let people and businesses talk to each other in the same way. This is effectively the second business my team and I co- founded and I believe that having a shared vision, values, and ambition is the glue that keeps us together. We want to build a generational company that fundamentally changes the way businesses connect with customers. This is obviously a very broad ambition, and our founding team is united on the problem we are trying to solve, and the size, scale and type of business we are building. Today, we cater for companies of 500 or more people with support and sales teams in multiple regions. Atlassian, Scottish Power, New Relic and others are making big bets on our platform, which is incredibly exciting. We have invested heavily in automation, both on the workflow level and in the more common form of chat-bots, which has become a new differentiator for us. We first opened our platform to third-party developers in 2014 and in 2018 we enabled developers to build apps that appear in the UI of the Intercom Business Messenger, making us the first business messenger to power more than just live chat. We recently launched our new App Partner Program, allowing us to collaborate on sales and marketing opportunities with our app partners, including Slack, HubSpot, Stripe, and others. Our ecosystem is record-strong, with 250+ apps, over 100,000 installs, and three out of four Intercom customers are using these apps every week. Their adoption of these apps and our APIs shows us that our messenger is the place where business happens. As we continue to move upmarket, interoperability is important. To seamlessly plug into the tools our larger customers rely on, we are improving our existing integrations with CRMs and CDPs, such as Salesforce. Larger customers also rely on targeting to prioritise conversations and make sure their interactions with priority businesses are personal. Our integrations with Clearbit, Marketo, and others allow customers to leverage data for segmenting and targeting customers and prospects. We are also bolstering our APIs so app partners can build deeper integrations, and our customers can develop tailored solutions for their businesses. From a customer journey standpoint, we are the only company offering a Conversational Relationship Platform that helps businesses build relationships with their customers and drive growth at every stage: from converting website visitors, to onboarding, engaging and supporting customers. Having started in Ireland and then expanding to San Francisco, the biggest differentiator in 2011 between Europe and San Francisco was access to capital. In the Valley, $1M on $6M could be raised with a good deck and evidence you could build a product. In the 2011-European VC world, customers, revenue, fast growth, etc., were needed to approach that valuation. As a result, we and many other promising startups of our generation ultimately incorporated in the US instead of Europe. Today, there are many more ambitious funds in Europe willing to pay top prices. Similar to our industry peers, we are seeing challenges arise out of the economic impacts of this global crisis. While it is difficult to predict all the ways our business will be impacted by COVID in the future, we are confident that there is significant opportunity. Businesses more than ever need a platform that enables personalised messenger-based experiences at every stage of the customer journey, without sacrificing efficiency or scale. DES TRAYNOR 49 48 Concentration of investment in Enterprise Software, Fintech and Marketplace companies Many of Europe’s category leaders have attracted significant late-stage funding in the last 18 months Where are investors putting their money? $24BN INVESTED IN 2019 AND 2020 YTD ACROSS 183 TRANSACTIONS Source: Capital IQ, Mergermarket, Pitchbook, Crunchbase, press releases, and GP Bullhound analysis Note: Investments greater than $50m between 1 January 2019 and 14 May 2020. Chart presented based on value raised. Selected company logos only; this is not an exhaustive list of all transactions. 35% 33% 20% 9% 3% 1% CHAPTER 4 ENTERPRISE SOFTWARE FINTECH MARKETPLACES OTHER DIGITAL MEDIA E-COMMERCE A diverse mix of investors are investing in Europe – access to capital is no longer a constraint Ecosystem plays a meaningful role in bringing innovation to the market globally Multiple established pools of capital ALL INVESTOR TYPES & REGIONS ARE INVESTING IN EUROPE Source: Capital IQ, Mergermarket, Pitchbook, Crunchbase, press releases, and GP Bullhound analysis Note: Investments greater than $50m between 1 January 2018 and 14 May 2020, where lead investors are publicly disclosed – investment total divided equally between identified lead investors. Selected investor logos only; this is not an exhaustive list of all investors. 69% 15% 11% 5% GROWTH INVESTORS CORPORATES ALTERNATIVE/ PUBLIC EQUITY SOVEREIGN WEALTH FUNDS LATE-STAGE FUNDING 51 50 EXPERT VIEW Expert view: Babylon DR ALI PARSA FOUNDER & CEO OF BABYLON In founding Babylon, we wanted to create an organisation that could make healthcare accessible and affordable by delivering it to devices people already have – today there are 2.5bn+ smartphones globally. That is why we are leveraging the power of AI to increase access, put more information in the hands of people, ensure earlier opportunities for intervention and as a result improve treatment outcomes and help to reduce costs. Salaries for doctors and nurses make up two-thirds of all healthcare costs almost anywhere in the world. With COVID-19, many telemedicine companies have boasted of doubling or tripling the number of doctor consultations, or a massive hiring of doctors, but this has not solved the affordable accessibility problem. A doctor on their mobile phone costs the same as in their office and is just as busy, so this does not help to reduce the strain on healthcare professionals. At Babylon, this pandemic has shown us what we can do. With the significant surge in demand and shortage of clinical resources, we built a COVID-19 Care Assistant solution to give the most appropriate care by the most appropriate resource, while safeguarding our clinicians for the patients who need them most. Our emphasis has been on giving patients access to quick, reliable medical information and answers so that in most cases they can take the necessary action without having to speak to a doctor. Thus, while we have tripled the number of patients, we have only increased the number of doctors by 25% because 80% have already been supported. Our app has automated tools for patients to access information. By using our human-operated live chat support application, we are able to automate some of the pattern of repetition with a bot. From these tools, if need be, we can still connect a patient with a doctor for a virtual consultation to ensure their specific needs are met. The simple rethinking of solutions like this will result in meaningful change, making healthcare more affordable and accessible, including the billions previously left behind. It is time these solutions are applied to assist with significant challenges, such as management of chronic conditions, from diabetes to mental health. Now that we have seen what can be done in meeting one crisis, there is no excuse to ignore the chronic crises that we struggle with. Some of the most significant healthcare costs relate to timing and prevention versus treatment, as almost 70% of healthcare money goes into predictable preventable diseases. Seeing a problem early on could mean a $10 solution rather than $4,000 by seeing it too late. By helping people to better monitor and manage their health, we can gather more insights that can help to predict or identify issues earlier, meaning we provide a better model of healthcare. This can be done in even the poorest countries in the world. For example, in Rwanda we already serve one-third of the population and we recently announced a new long-term relationship with the government to create a nationwide primary healthcare service. The government is helping to make healthcare available and affordable for everyone, and like Rwanda, any other country can improve its healthcare through our technology. My advice to entrepreneurs is ensure you have investors with a long-term horizon to back your big dreams. At Babylon we are lucky to have found such investors, which is rare. I am proud of our investors as I think it takes a lot of guts to solve a long-term problem such as healthcare in a fundamental way. DR ALI PARSA 53 52 CHAPTER 5 On the path to Europe’s first Tech Titan Eight Tech Titans currently walk the globe – the most ever – and up from six last year. Baidu has left the club, whilst Tesla has seen its valuation increase by 270% year-on-year to $149bn at time of writing (1), valuing the company more than Volkswagen, the world’s biggest car maker by volume. With incredible valuation growth over the last 12 months, we welcome two new marketplace entrants from Asia: Pinduoduo and Meituan-Dianping. Founded in 2015, Pinduoduo is one of the fastest growing marketplace startups in the history of China, reaching $15bn of GMV in only two years, a milestone that took incumbents Alibaba and JD.com five and ten years, respectively, to accomplish (2). Despite such large established competitors, Pinduoduo achieved its incredible growth by successfully gamifying the shopping experience for mundane everyday products with a browsing-centric rather than search-centric model, driving engagement and user retention. Still unprofitable, many are sceptical of the company’s long-term sustainability, but the stock has gone from strength-to-strength in the public markets since IPO in July 2018. While the US and Asia remain hotspots on the Titan landscape, we believe Europe is on the cusp of its first Titan. Emerging European Titans include Adyen, Spotify, Delivery Hero, JustEat Takeaway.com (formed from the mega-merger this year of JustEat and Takeaway.com), and Zalando. For many years, Spotify has led the charge towards becoming Europe’s first Tech Titan, but this year Adyen has overtaken Spotify as the highest valued tech company in Europe. In 2006, Adyen was founded as a fledgling operation with a team of around a dozen. Fast forward a decade and Adyen is a global company with over 1,200 employees across more than 20 offices. In the past decade, Adyen saw the continued rise of e-commerce in an increasingly globalised world, acceleration in innovation across the financial services industry, and ever- changing consumer expectations between online and offline activities. Profitable since 2011 and now processing more than €240bn in transactions per annum (3), it is likely to benefit from the recent acceleration of online retail. Streaming giant Spotify now accounts for c.80% (4) of all music consumption in key markets, such as the US, with 286m monthly active users globally, up 31% from one year ago (5). Spotify remains the biggest of all streaming platforms, but its well-capitalised competition is also growing. That said, this does not seem to be slowing Spotify down, with Q1 2020 being the third consecutive quarter of year-on-year growth in monthly active users above 30% (6). Despite the turbulence in the markets, we believe Spotify and Adyen have the potential to reach a valuation of $50bn or more. ON THE PATH TO EUROPE’S FIRST TECH TITAN (1) See page 56 of this report for more information and sources (2) Natanson, E. (2019, 4 December) The Miraculous Rise Of Pinduoduo And Its Lessons. Forbes. Retrieved from www.forbes.com. (3) See page 59 of this report for more information and sources and (4) Perez, S. (2020, 26 February) Streaming services accounted for nearly 80% of all music revenue in 2019. TechCrunch. Retrieved from www.techcrunch.com. (5) Spotify’s financial results for Q1 2020 (6) Spotify’s financial results for Q1 2020. 55 54 There are currently eight Tech Titans in the world Baidu has left the club due to its valuation falling below $50bn and two new marketplace entrants from Asia have joined: Meituan-Dianping and Pinduoduo While the US and Asia remain hotspots on the Titan landscape, we believe Europe is on the cusp of its first Titan The Tech Titans WHO ARE THEY? Source: Capital IQ, Mergermarket, Pitchbook, Crunchbase, press releases, and GP Bullhound analysis Note: Cut-off date for inclusion in report 31 March 2020; valuations correct as of 14 May 2020. +14% +272% = +114% = +202% (9%) = (37%) $589BN$149BN$150BN$91BN$75BN$73BN$57BN$56BN$33BN$518BN$40BN$150BN$43BN$75BN$24BN$62BN$56BN$53BNCY VALUATION LY VALUATION FACEBOOK TESLA ANT FINANCIAL MEITUAN DIANPING BYTE DANCE PINDUODUO UBER DIDI CHUXING BAIDU CHAPTER 5 Pinduoduo is one of the fastest growing marketplaces in China, achieving a GMV of $15 billion only two years after its founding. It took incumbents Alibaba and JD.com five and 10 years, respectively, to achieve this (1) Unlike most marketplace platforms, Pinduoduo’s platform search bar is located at the bottom of the front page, making it browsing-centric rather than search-centric Pinduoduo is still unprofitable, mainly because of its heavy marketing spending to fuel growth, but its valuation has increased from its last private valuation of $13.6bn to $72.8bn in the public markets A disruption case study PINDUODUO: GAMIFYING THE SHOPPING EXPERIENCE Source: Capital IQ, Mergermarket, Pitchbook, Crunchbase, press releases, Pinduoduo Annual Report (2019), and GP Bullhound analysis Note: Valuation correct as of 14 May 2020. (1) Natanson, E. (2019, 4 December) The Miraculous Rise Of Pinduoduo And Its Lessons. Forbes. Retrieved from www.forbes.com. HIGHER VOLUME AND SALES LOW PRODUCTION AND SUPPLY CHAIN COSTS MORE SAVINGS TO USERS MORE VALUE- FOR-MONEY PRODUCTS MORE USERS MORE SAVING MORE FUN VALUATION MORE INTERACTIONS AMONG USERS BETTER UNDERSTANDING OF USERS BETTER USER EXPERIENCE MORE TRUST AND RECOGNITION $13.6BN $72.8BN APR-2018 SERIES D MAY-2020 NASDAQ “TOGETHER, MORE SAVINGS, MORE FUN” KEY PERFORMANCE METRICS REVENUES $1,908M $268M $4,329M 2017 2018 2019 ON THE PATH TO EUROPE’S FIRST TECH TITAN 57 56 Europe’s emerging Titans LEADING THE CHARGE Source: Capital IQ, Mergermarket, Pitchbook, Crunchbase, press releases, and GP Bullhound analysis Note: Cut-off date for inclusion in report 31 March 2020; valuations correct as of 14 May 2020. (1) versus 13 May 2019 (2) as of 14 May 2020 (3) Adyen Annual Report (2019) (4) Spotify Annual Report (2019) (5) DelieryHero website (6) combination of equity raised by both companies before merger (7) Yandex website and (8) Zalando website. Five multi-billion dollar European companies are frontrunners to become Europe’s first tech titan Adyen overtakes Spotify as the highest valued European tech leader, with its valuation increasing +50% versus last year (1) ORIGIN FOUNDED RAISED (TO DATE) (2) VALUED AT (2) FACTS €240BN PAYMENTS VOLUME PROCESS IN 2019 (3), 51% YOY GROWTH 1,200 FTE ACROSS MORE THAN 20 OFFICES (3) 29% YOY PREMIUM SUBSCRIBERS GROWTH, TO 124 MILLION (4) 50M+ TRACKS AND 700K+ PODCASTS (4) TAKEAWAY.COM ACQUIRED JUST EAT IN JAN-2020 FOR $8.3BN (7) 4.2BN SITE VISITS IN 2019, 33% YOY GROWTH (8) €6.5BN IN REVENUES 2019, 20% GROWTH VERSUS 2018 (8) 666M ORDERS IN 2019, 80% YOY GROWTH (5) €1.4BN OF REVENUES GENERATED (5) PETER VAN DER DOES 2006 DANIEL EK AND MARTIN LORENTZON 2006 N.A. 2000 ROBERT GENTZ AND DAVID SCHNEIDER 2008 NIKLAS OSTBERG, KOLJA HEBENSTREIT, MARKUS FUHRMANN AND LUKASZ GADOWSKI 2011 $1.3BN $2.3BN $1BN (6) $1BN $1.4BN $32.1BN $28.3BN $15.4BN $14.2BN $17.7BN CHAPTER 5 On the path to becoming Europe’s Titan Source: Capital IQ, Mergermarket, Pitchbook, Crunchbase, press releases, Adyen Annual Report (2019), GP Bullhound analysis, and Lunden, I. (2015, 30 September) Ayden Adds New Funding From Iconiq, Values Dutch Payment Group At $2.3B. TechCrunch. Retrieved from www.techcrunch.com. Note: Valuation correct as of 14 May 2020. Founded in 2006, Adyen operates as a global payments platform, integrating the full payments stack – gateway, risk management, processing, acquiring, and settlement In the past decade, Adyen has seen the continued rise of e-commerce in an increasingly globalised world, an acceleration in innovation across the financial services industry and ever-changing consumer expectations between online and offline activities Profitable since 2011 and now processing more than €240bn of transactions per annum, Adyen is likely to benefit from the acceleration of online retail as a result of the COVID-19 pandemic ADYEN: BUILDING THE FUTURE OF PAYMENTS VALUATION 2006 2016 €66BN 2014 2017 2018 €159BN NET REVENUES €349M €218M €497M 2017 2018 2019 2015 2019 €240BN $1.5BN VALUATION $2.3BN $8.3BN $24.5BN $2.3BN $32.1BN SEPT-2015 STILL PRIVATE MAY-2020 EURONEXT AMSTERDAM KEY PERFORMANCE METRICS PROCESSED VOLUME ON THE PATH TO EUROPE’S FIRST TECH TITAN €32BN FOUNDED 2011 1ST YEAR AS A PROFITABLE COMPANY UNICORN STATUS INVESTMENT INVESTMENT JUNE 2018 IPO 31 DEC 2019 MARKET CAP OBTAINED EUROPEAN BANKING LICENSE €108BN 59 58 METHODOLOGY Methodology OUR METHODOLOGY AND SOURCES AUTHORS WE HAVE INCLUDED: Tech companies only, with a bias towards Internet / Software (Cleantech and Biotech excluded). Companies falling into the following macro-sectors: E-commerce (e.g. sale of goods or services), Audience (e.g. monetisation through ads and lead gen), Software (e.g. license of Software), Gaming (including gambling), Fintech, Marketplaces and Augmented Reality / Virtual Reality (AR/VR). Headquartered in Europe (1). Founded in 2000 or later. (1) Including Israel; and companies which were founded in Europe and later relocated to different geographies With an equity valuation of $1bn+ in the public or private markets (including acquired companies). FIRST CAVEAT: Our sources only include public data (e.g. data platforms such as Capital IQ, Pitchbook, press articles, etc.), and the accuracy of our dataset is limited to the disclosed data. SECOND CAVEAT: For this year’s report, companies are tracked for inclusion as billion-dollar companies until 31 March 2020 with valuations updated as of 14 May 2020, unless otherwise stated, which has obvious limitations related to, for example, the state of equity markets, recent company performance, etc. We crunched the data on the European billion-dollar technology companies founded since 2000, with the aim of analysing what it takes to create a outstanding success ALESSANDRO CASARTELLI EXECUTIVE DIRECTOR ALON KUPERMAN EXECUTIVE DIRECTOR IMAN CRISBY EXECUTIVE DIRECTOR MARKETING JENNIFER ELLER RESEARCH EDITOR ANDREA LÓPEZ DESIGN COORDINATOR MANISH MADHVANI MANAGING PARTNER ADAM PAGE VICE PRESIDENT ALEXIS MAJOS ANALYST MARIA MACIAGOWSKA ANALYST SANDRA NÚÑEZ GRAPHIC DESIGNER (1) League table data represents selected transaction advisors. Time period is 2016-Q4 2019. Global M&A transactions between $10m and $300m ABOUT US About Us Our Marquee Credentials GP BULLHOUND GP Bullhound is a leading technology advisory and investment firm, providing transaction advice and capital to some of the best entrepreneurs and founders. Founded in 1999, the firm today has offices in London, San Francisco, Stockholm, Berlin, Manchester, Paris, Hong Kong, Madrid and New York. MERGERS & ACQUISITIONS CAPITAL TRANSACTIONS INVESTMENTS INSIGHTS & EVENTS We are the no. 1 global advisor (1) to leading technology companies in competitive international sale and acquisition processes. The firm has completed 420 successful M&A transactions to date, worldwide, with a total value of over $18bn. We are a leading global advisor to companies and their owners on capital related transactions including venture capital, growth capital, acquisition funding, secondary block trades and initial public offerings. 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