UK s leadership in European tech accelerates and extends beyond London

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1 UK s leadership in European tech accelerates and extends beyond London October 2018 Prepared for Tech Nation and the Government s Digital Economy Council by Dealroom.co

2 Summary Following the IPOs of Farfetch and Funding Circle, the UK currently has 15 unicorns - companies valued at more than a $1bn, with an estimated combined value of $28bn In total 60 unicorns have now been created in the UK. The pace has been accelerating in the last three years It s not just London that creates significant, fast-growing businesses. Major UK cities and capitals are competing successfully with other European capitals Oxbridge - the university cities of Oxford and Cambridge combined - have together produced nine unicorns, more than Paris which has produced five Manchester has created five unicorns of its own, the same number as Amsterdam and Paris The UK is also creating more potential future unicorns than any other European country and Israel The UK has 54 potential unicorn companies valued at $250m to $1bn. Germany and France have created 28 and 27 potential unicorns respectively Source: Dealroom. See methodology page for more info. 2

3 The United Kingdom leads with 60 unicorns created (35% out of 169 in Europe & Israel) Cumulative number of companies by year in which $1 billion valuation mark is crossed 60 United Kingdom 51 Germany Israel Netherlands Sweden 24 France Switzerland Spain Russia Rest of Europe Source: Dealroom. See methodology page for more info. 3

4 Since 2016 more new unicorns were created in the UK than in Germany, France, Sweden and the Netherlands United Kingdom Germany, France, Sweden, Netherlands Number of new unicorns Number of new unicorns United Kingdom The Hut Group Oxford Nanopore Deliveroo TransferWise Mimecast Global Switch Skyscanner Metro Bank OakNorth Bank Improbable Blue Prism Brewdog Alfa PurpleBricks Matchesfashion Host Europe Group Revolut Greensill Darktrace SumUp On The Beach Callcredit FNZ Autolus Monzo Trivago 1&1 Internet Coolblue Takeaway.com Evolution Gaming Flixbus Bambora Paradox Interactive N26 BioNTech About You Celonis NuCom Group Gitlab Elastic izettle Germany Netherlands Sweden OVH Exclusive Group Deezer France Source: Dealroom. See methodology page for more info. 4

5 The UK also continues to lead Europe by number of potential future unicorns Combined value of companies valued $250M to $1B Selected potential future unicorns United Kingdom $18.6B 54 companies Germany Israel France $8.8B $8.1B $7.7B Switzerland Ireland Spain Russia Sweden Netherlands Austria Finland $3.5B $2.6B $2.6B $2.1B $2.0B $1.5B $1.0B $0.9B Source: Dealroom.co 5

6 London Berlin Unicorns Unicorn stats 36 unicorns worth $132B 8 unicorns worth $32B Investment per capita $610 $490 Top universities Imperial College London (#8) London School of Economics and Political Science (#25) Humboldt University of Berlin (#62) Accelerators Unicorns: number of companies founded since 1990 that reached $1 billion valuation. Investment per capita based on investment in 2017 and city population. University rank as per Times Higher Education. 6

7 Cambridge & Oxford Paris Unicorns Unicorn stats 9 unicorns worth $57B 5 unicorns worth $10B Investment per capita Top universities $ 1,800(Cambridge) $650 (Oxford) University of Oxford (#1) University of Cambridge (#2) $700 Paris Sciences et Lettres (#74) Grenoble Alpes University (#301) HEC Paris, ESSEC Accelerators Unicorns: number of companies founded since 1990 that reached $1 billion valuation. Investment per capita based on investment in 2017 and city population. University rank as per Times Higher Education. 7

8 Manchester Amsterdam Unicorns Unicorn stats 5 unicorns worth $13B 5 unicorns worth $29B Investment per capita $490 $400 Top universities University of Manchester (#54) University of Amsterdam (#59) Accelerators Unicorns: number of companies founded since 1990 that reached $1 billion valuation. Investment per capita based on investment in 2017 and city population. University rank as per Times Higher Education. 8

9 Uniquely, the UK has six tech hubs in which already two or more unicorns have been created London: 36 unicorns Berlin: 8 Hamburg: 2 Stockholm: 8 Munich: 6 Cambridge: 5 Oxford: 4 Paris: 5 Copenhagen: 4 Amsterdam: 5 Manchester: 5 Madrid: 3 Leeds: 2 Edinburgh: 2 Barcelona: 2 Dublin: 2 Source: Dealroom.co Note: Cities with two or more $1B+ companies created since

10 Summary slide London Oxbridge Berlin Paris Manchester Amsterdam Edinburgh Dublin Leeds Unicorns created Population 8.2M 290K 3.5M 2.2M 510K 821K 489K 565K 780K Investment per capita $610 $1,150 $490 $700 $490 $400 $100 $490 $33 Highest ranked university 8 1 & Number of accelerators Unicorns: number of companies founded since 1990 that reached $1 billion valuation. Investment per capita based on investment in 2017 and city population. University rank as per Times Higher Education. 10

11 Appendix: overview of UK unicorns Realised unicorns: 45 Unrealised unicorns: 15 Future unicorns: 54 Source: Dealroom.co 11

12 About Dealroom.co Intelligence, trusted by world-leading clients Dealroom is a global company information database & research firm Its software, database and bespoke research enable its clients to stay at the forefront of innovation, discover promising companies and identify strategic opportunities Among its clients are world-leading strategy consulting firms, investment banks, multinationals, technology firms, venture capital & buyout firms and governments The most comprehensive European data source Number of European VC rounds tracked in 2017 (1) Selected publishers of Dealroom data Not disclosed in official report Europe s most comprehensive database of promising companies and investment Growth metrics like product usage, funding and valuation momentum (web, ios, Android) Selected Dealroom clients Track team size, background, composition and growth Discover potential unicorns, long before others do Industry taxonomy and database structure designed for innovative technology startups & scaleups Stay at forefront of innovation and investment trends Source: Dealroom.co 1. Verified rounds excluding secondary, ICOs, debt and other non-equity rounds. 12

13 Methodology & definitions Investment numbers refer to venture capital investment rounds such as seed, series A, B, C,. late stage, growth equity rounds. It excludes debt or other non-equity funding, lending capital, grants and ICOs Buyouts, M&A, secondary rounds, and IPOs are treated as exits: excluded from funding data, but included in exit data A unicorn is defined as an independent private company (i.e. not publicly listed) that has reached a $1 billion valuation, on the basis of a funding round or -retrospectively- on the basis of an acquisition or IPO There are some notable edge-cases: - Companies that IPO-ed at or above $1 billion but subsequently dipped below that valuation, are still included (e.g. Alfa, Rovio, edreams) - Some companies have at some stage reached a $1 billion but subsequently raised, IPO-ed or were acquired below that value. In this case the company is not counted as a unicorn (examples: Blippar, Home24, ironsource, Fanduel, Ulmart, Conduit, Wonga, VE Interactive, Powa) - If a unicorn moved HQ, the company is counted in the country where it reached unicorn status. Occasionally companies received dual HQ status (1) This report focuses on companies that have crossed the $1 billion mark in the post-internet age, i.e. after Most but not all unicorns are venture backed Companies in the included in the analysis are tech-driven. Industries include software, ecommerce, online marketplaces, hardware, ICT infrastructure. The full industry & business model taxonomy can be found online via app.dealroom.co/heatmaps/funding/industries Increasingly, innovative models are scaling offline or via hybrid online-retail models. Examples are beer brand Brewdog which innovated distribution and marketing, by leveraging viral marketing and crowdfunding to build a brand and Metro Bank, a retail-first challenger bank Dealroom s proprietary database and software aggregate data from multiple sources including processing of public news-flow, data feeds, web scraping, crowd-sourced contributions (verified by Dealroom) and manual research Data is verified and curated with an extensive manual process, augmented by data processing Most underlying data from the report is available online. For more info please visit dealroom.co or contact support@dealroom.co Source: Dealroom.co. 1. Examples include: King.com (UK/Sweden), Intercom (USA/Ireland), Sitecore (Denmark/USA), Cybereason (Israel/USA).

14 Tech Nation - The UK Network for Ambitious Tech Entrepreneurs Tech Nation empowers ambitious tech entrepreneurs to scale faster through digital entrepreneurship skills, a visa scheme for exceptional talent, building networks and connections, and by championing the UK s digital sector through data, stories and media campaigns. Founded in 2011 (as Tech CIty originally), Tech Nation s programmes cater for businesses of all growth stages, from initial idea and early stages (The Digital Business Academy, Founders Network and Rising Stars), right through to the mid and late stages (Upscale and Future Fifty). It also recently launched its first ever sector-specific programme, for fintech companies, with more in the pipeline. Some of the UK's biggest tech success stories have taken part in Tech Nation's growth programmes, from Just Eat, Deliveroo, Not On The High Street, and Skyscanner, to Farfetch, Unruly, Zoopla and Darktrace. Check out all alumni companies. #WeAreTechNation