Darktrace tops billion-dollar leaderboard in Europe's record year of tech investment


05-07-2018

Incisive new research looks at the growth of Europe’s tech ecosystem in what has been a record year of tech investment. A new report, Titans of Tech, analyses more than 400 European startups that have raised over $20m since 2014 to identify the top 50 companies with the most potential to become Europe’s billion-dollar superstar tech companies over the next two years. Cambridge-based Darktrace tops this list.

The report includes a perspective from Poppy Gustafsson, CEO EMEA at Darktrace, discussing Darktrace’s journey to date, and the challenges the company faced in its early years.

Titans of Tech also reveals that the UK is leading the way in the creation of billion-dollar businesses despite Brexit fears.

The UK has: 

  • Added six billion-dollar companies worth $12.4bn in the past year – more than any other European market
  • Produced the highest number of billion-dollar companies in Europe since 2000 – 26 in total
  • Contributed the most to Europe’s $240bn ecosystem of billion-dollar tech companies - $64bn in total

However - while the UK is currently leading the way in the creation of billion-dollar businesses, and has contributed the most value to European’s $240bn billion-dollar tech ecosystem, it has failed to produce any companies of a sufficient size to compete with the world’s biggest tech businesses – Facebook, Baidu, Ant Financial, Uber, Didi Chuxing, and Tesla.

 

UK leads the race in Europe’s record year of tech investment

The UK’s tech industry is leading the way in the creation of billion-dollar businesses despite Brexit fears, according to research released today by technology investment bank GP Bullhound.

In the past year, the UK has added six billion-dollar tech companies worth $12.4bn to its club of 26, more than any other European market, and has produced the highest number of billion-dollar companies in Europe since 2000 – contributing $64bn to Europe’s $240bn ecosystem of billion-dollar tech companies.

New entrants from the UK in the past year include digital banking startup Revolut and robotic process automation software firm Blue Prism.

The report from GP Bullhound, Titans of Tech: European Tech Comes of Age, finds that, of the 50 businesses expected to become Europe’s next billion-dollar businesses, half are in the Enterprise SaaS, Fintech and Transportation industries, while close to two thirds are in the UK, France and Israel.

Fintech continues to be a fertile industry for up and coming start-ups in the UK despite the challenges presented by Brexit. Germany, on the other hand, is leading the way in transportation tech.

Manish Madhvani, Managing Partner at GP Bullhound, commented: “The UK’s tech ecosystem continues to present an attractive proposition to global investors, and British tech companies are driving up the ambition level and paving the way for the rest of Europe. The US and Asia may still dominate the market for billion-dollar tech businesses, but our report indicates a hugely optimistic outlook for the UK’s tech industry over the next decade.”

2017 marks the highest year of tech investment on record for European billion-dollar companies, with $20bn raised within Europe.

The report identifies mega rounds – rounds of $200m or more – as a key factor powering the growth of Europe’s biggest and brightest tech businesses. The number of mega rounds is on the rise in Europe, with 9 tech companies raising mega rounds in 2017 - including British companies Deliveroo, Transferwise, and Improbable - vs only 2 in 2013.

A growing proportion of this funding comes from strategic rather than financial investors. 42% of funding through mega rounds in 2017 and 75% to date this year has come from strategics such as BBVA, Naspers and Softbank, indicating a paradigm shift in the investor landscape as strategics take the place of traditional financial investment firms. Asian investors are most likely to invest, delivering 35% of mega round funding in 2017 and over half of all mega round funding to date this year.

The report indicates that several key players within Europe’s tech ecosystem demonstrate the strength and velocity to reach ‘titan’ status – a valuation of over $50 billion - within the next few years.

Since 2014, 5 ‘decacorns’ - companies worth $10bn or more - have emerged into Europe’s tech scene: Yandex, Zalando, Supercell, MobilEye and Spotify. Of these, Spotify has emerged as the frontrunner to reach the $50bn mark, with a valuation growth of 122% in the last twelve months, thanks to its recent IPO.

The European technology ecosystem is also generating an unprecedented number of billon-dollar businesses, with 14 new billion-dollar businesses emerging in the past year – the total number has more than doubled from 30 in 2014 to 69 today.

Looking ahead, GP Bullhound has identified ten key European companies set to enter the billion-dollar tech ecosystem within the next year, including British firm Darktrace and Sweden’s iZettle (which have both since achieved a billion-dollar valuation), French big data company Algolia, and German tour & activities booking platform GetYourGuide.

The report, Titans of Tech: European Tech Comes of Age, is available for download here. Along with analysis of Europe’s billion-dollar tech companies, it includes interviews with Pär-Jörgen Pärson, Partner at Northzone and Board Member of Spotify; Catherine Wines, Director & Co-Founder of WorldRemit Ltd; Poppy Gustafsson, CEO EMEA at Darktrace; Jason Kingdon, Chairman of Blue Prism; and Uri Levine, Co-Founder of Waze.

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