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Unicorns

Europe’s unicorn herd grows bigger and faster in 2021

This year has seen a record number of European startups achieve unicorn status as the increased participation of US investors pushes up valuations.

Increased US participation in European VC deals has driven up valuations for companies across the continent. (Nay Sakdi Chay Kay Kaew/EyeEm/Getty Images)


When Paris-based crypto security startup Ledger raised $380 million in a Series C led by 10T Holdings last week, it became the latest in a growing cohort that has made 2021 a record year for unicorns.

In total, 23 companies in Europe and Israel have become unicorns so far this year, easily beating 2020’s total of eight, according to PitchBook data. Despite the ongoing effects of the pandemic, a record amount of VC capital has continued to flow to European startups, with €32.5 billion (around $39.3 billion) invested so far, putting the year on track to surpass last year’s €37.6 billion.

The increasing participation of US-based investors has been a factor in the increase of investment. Nearly half of the top 10 backers of European unicorns in terms of deal count are based across the Atlantic including the likes of Accel and Insight Partners. US firms have been actively targeting Europe’s tech startups, which tend to have lower valuations than their US counterparts, offering more opportunities for higher growth rates.

“We believe the effects of robust investment into Europe-based unicorns could create much larger valuations in future years,” said Nalin Patel, a private capital analyst at PitchBook. “We expect transatlantic capital flows to continue to increase and strengthen valuations in Europe, as cash-rich US investors seek new companies showing strong potential that could be introduced to the US market.”

 


The UK accounts for the most unicorns overall. Its new entrants include London-headquartered Blockchain.com, which raised $120 million at a reported $3 billion valuation in February and secured a further $300 million a month later, pushing its value to $5.2 billion.

German startups have also done particularly well this year for unicorn creation. Eight companies from the 2021 herd are based in Germany including digital wealth manager Scalable Capital, which last week was valued at a reported $1.4 billion after raising over $180 million in a round led by Tencent. In March, Berlin-based online grocery delivery startup Gorillas secured unicorn status with a $290 million Series B, according to a PitchBook estimate.

Europe’s decacorns (companies worth over $10 billion) have also had a bumper year. Swedish fintech startup Klarna became the continent’s most valuable VC-backed company in March at $31 billion, up almost triple from September when it was valued at $10.65 billion. Klarna already held the title in September but was replaced by Checkout.com in January when the online payments company gained a $15 billion valuation.

  • leah-hodgson-photo.jpg
    Written by Leah Hodgson
    Leah Hodgson is a London-based senior reporter for PitchBook covering venture capital across Europe and the Middle East. Leah graduated from the University of Surrey with a BA in international politics with French. She has previously been a radio reporter in France. She later turned to financial journalism, covering the wealth management industry. She joined PitchBook in 2018.
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