The definitive take on European tech in partnership with Proudly supported by Co-authors and hosts Tom Wehmeier Sarah Guemouri Niklas Zennström Atomico Corinne Vigreux TomTom Tony Blair Tony Blair Institute for Global Change Fireside talks Hiro Tamura Atomico Karl Lokko Black Seed Sebastian Siemiatkowski Klarna Janneke Niessen CapitalT Linda Griffin Kry Ilkka Paananen Supercell Miki Kuusi Wolt Marianne Vikkula Wolt Riku Mäkelä Wolt Industry leaders and experts Our data partners Our report partners State of European Tech 2021 01 Europe a global tech force Capital Invested in 2021 $100B+ 98 100 A groundbreaking year for European tech $3T+ New $1B+ Companies in 2021 Total Ecosystem Value Investment at a whole new level Cumulative month-by-month capital invested ($B) Note: All Dealroom.co data excludes Israel and the following: biotech, secondary transactions, debt, lending capital, and grants. 2021 figures show data up to November 2021. Source: 2020 2021 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 75 50 25 0 100 $B Note: All Dealroom.co data excludes Israel and the following: biotech, secondary transactions, debt, lending capital, and grants. 2021 is annualised based on data to September 2021. Led by “mega” megarounds Capital invested ($B) by round size and by year Source: 2017 <$100M >$100M 2021E $60B 10x Capital invested in $100M+ rounds $6B $16B $42B Waking up to European tech of rounds with US investor participation versus 19% in 2019 28% 1 in 3 # of investors investing in $100M+ rounds in 2021 versus 2019 $100M+ rounds involved a crossover investor versus 5% in 2019 3.1x Note: Founder respondents only. Numbers do not add to 100 as respondents may have mentioned keywords assigned to multiple themes. Source: Capital invested per capita ($) by country quartile Europe is not even close to its full potential 2020 2021 Third quartile countries $184 Note: All Dealroom.co data excludes Israel and the following: biotech, secondary transactions, debt, lending capital, and grants. 2021 is annualised based on data to September 2021. Population data from UN, with data shown for countries with >300,00 inhabitants. Source: Bottom quartile countries Second quartile countries Top quartile countries $497 $152 $52 $5 $10 $1 $1 cities 98 countries 28 Great European tech companies can come from anywhere A record number of unicorns and decacorns 40 $10B+ 321 $1B+ companies The era of European big tech is upon us $178B 2020 $352B First VC-backed $100B company is on the horizon $97B $59B 2020 Source: Note: S&P Capital IQ Platform, as of date 5 November 2021, for illustrative purposes only. A watershed year for European tech exits Total enterprise value ($B) by route to liquidity (2021) M&A IPOs & Direct Listings SPACs All VC-backed $275B $62B $140B $112B $101B Note: S&P Capital IQ Platform for IPOs, direct listings and SPACs is as of date 15 November 2021, for illustrative purposes only. Dealroom data for M&A is based on data up to September 2021. Source: A step change in valuations globally in 2021 Note: 2021 figures are as of 16 November 2021. Source: $45M $115M Median pre-money valuation $24M $9M EARLY STAGE LATE STAGE 2019 2020 2021 2019 2020 2021 EARLY STAGE LATE STAGE 2019 2020 2021 2019 2020 2021 A step change in valuations globally in 2021 Note: 2021 figures are as of 16 November 2021. Source: $95M Median pre-money valuation $25M $100M $505M 75th percentile pre-money valuation EARLY STAGE LATE STAGE 2019 2020 2021 2019 2020 2021 EARLY STAGE LATE STAGE 2019 2020 2021 2019 2020 2021 European tech is creating value faster than ever Total enterprise value ($T) of European tech $3T Dec 2018 Dec 2020 Aug 2021 $2T $1T 8 months $1T added in just 8 months Note: All Dealroom.co data excludes Israel and the following: biotech, secondary, transactions, debt, lending capital, and grants. Based on private markets valuation of European tech companies as of September 2021 and S&P market capitalisation of public European tech companies as of 15 November 2021. Source: The macro context is not lost on the industry… Higher interest rates and inflation 53% 41% Public market sentiment and performance Loss of competitiveness due to policy decisions 53% Note: Founder respondents only. Numbers do not add to 100 as respondents may have mentioned keywords assigned to multiple themes. Source: What are the three main macro risks that you see that could lead to an overall slowdown of VC activity in Europe over the next 5 years? Powerful and irreversible tailwinds European flywheel Technology adoption Animation test dropping here Talent is betting on tech Founders and Operators 02 Founders and leaders with the best credentials Multi-generational experience 38% With experience at a $1B+company 19% Note: Based on Dealroom's analysis of 38,000 unique founders and leaders as defined in the methodology. Source: Today’s unicorn mafias already have a big impact; tomorrow’s will be even bigger Distribution of alumni founders and of $1B+ companies by founding decade % of alumni founders % of $1B+ companies Note: Based on Dealroom's analysis of 5,997 founders who previously worked for a $1B+ European companies. Source: 28% 4% 1980s 2010s 1990s 2000s 2% 18% 41% 25% 38% 44% Cohorts of $1B+ companies by founding year and by years of reaching $1B+ milestone European tech gets better with each ‘vintage’ 2000 2010 2015 2018 15 5 0 20 10 8 4 6 2 10 Note: Source: The strongest ever pipeline of early-stage companies Share of capital invested for deals <$5M by region Europe United States 2010 2021 2015 Note: All Dealroom.co data excludes Israel and the following: biotech, secondary transactions, debt, lending capital, and grants. 2021 figures show data up to September 2021. Source: 75% 54% 35% 33% 18% 26% 12% % of women founders % of ethnic minorities founders % of white men founders In your opinion, is it easier or harder to raise venture capital in Europe than it was 12 months ago? 14% Much harder Somewhat harder Unchanged Easier 4% 10% 8% 18% Note: Founders only. Numbers do not add to 100 as respondents selected up to three options. Source: It’s never easy to raise capital Share of total capital raised to date (pro-rated) by companies who raised a round since January 2020 in Europe Expanding the talent addressable market 89.1% 66.4% 22.7% 1.8% 1.1% 0.7% White founders White men founders White woman founders Black founders Black men founders Black women founders Note: Based on Extend Ventures analysis of a sample of 4,684 tech companies headquartered in Europe that have raised more than $2M of total funding since 1st of January 2020. Source: Tech is the engine for European growth Source: EU economy European startups and scaleups 19.4% 0.4% Employment growth rate (%), 2021 versus 2019 Note: Europe employment growth rate sourced from EuroStat. Start-up employment data sourced from Dealroom. ~50x higher What if anything do you see as the greatest challenge facing the European tech ecosystem in the next 12 months? The greatest challenges facing European tech Funding 29% 18% Regulation Talent 21% Note: Founder respondents only. Numbers do not add to 100 as respondents may have mentioned keywords assigned to multiple themes. Source: Young, talented women leaders Share of leaders by gender and years of experience Men Women Note: Based on Dealroom’s subset of 11,000 unique leaders as defined in the methodology with perceived gender attribute Source: O-5 years 5-10 years 10-15 years 15-20 years 20+ years 25% 50% 75% 100% 16% 29% 24% 21% 19% Better ideas, better companies 03 European entrepreneurs are shaping their own path Moonshots