The state of European unicorns: 2022 wrapped up | Popgen Tech
In the midst of a rocky time for European technology, a sturdier but smaller unicorn herd emerged this year, as only Europe’s top companies managed to graze enough healthy capital to navigate the VC downturn.
47 companies crossed the $1 billion valuation threshold for the first time in 2022, up from 69 the previous year. The decline was inevitable as overall funding fell by around 23% year-on-year. Although still more than three times as much as was minted in 2020, the unicorn fall is symptomatic of dark conditions in most European tech ecosystems.
Sifted took a deep dive into the data for this year’s group of Europe’s mythical beasts.
👉 Check out our complete, up-to-date tracker of all of Europe’s unicorns.
From north-south divide to convergence
Last year’s unicorn spread across the continent revealed some worrying trends around the ecosystem. At the time, 75% of unicorns were minted exclusively in the top three ecosystems – the UK, France and Germany – while a shy portion were spread across the Nordics and the Netherlands.
All other countries saw only a handful of $1 billion+ companies, and despite peak levels of VC funding, others simply never grew a horn.
This year’s group showed some improvements in distribution, with countries such as Italy minting its first unicorns, Croatia making a comeback and Spain piling on its five-strong unicorn count.
But on the downside, the unicorn share of Europe’s top three ecosystems fell around 20 percentage points, as top dogs were hit hardest by shaky VC environments.
Although still ahead, the UK produced just 11 unicorns – 23% of this year’s herd, down from 55% last year. France and Germany managed 14 between them, compared to 29 in 2021.
The people behind the horns
Sifted tracked down a total of 98 founders for the 2022 cohort.
Solo founders take up the bulk of them, including from the likes of Satispay, Paddle and Rimac Automobili, named after its Croatian founder Mate Rimac.
34% of new unicorns had two founders, 26% had three and only two had four. An average of two co-founders is generally consistent across unicorns of all ages.
Screened analysis found that only 3.1% of all unicorn founders in the 2022 cohort were female – a 0.7 percentage point drop from 2021. Only three female founders reached the $1 billion valuation mark – Johanna Småros of Relex Solutions, Sinead Fitzmaurice from TransferMate and Insider’s Hande Cilingir.
Formerly a researcher at the Helsinki University of Technology, Småros took on the role of CMO when the company was founded in 2005 – Relex is the oldest unicorn on this year’s list. This month, Småros, her co-founders and an early employee launched a €100 million charitable foundation to donate to groups fighting climate change and working to reduce inequality.
Fitzmaurice is Ireland’s first $1 billion+ female founder and has spent around 30 years in audit and finance.
Cilingir is co-founder and CEO of Istanbul-based marketing tool Insider, launched in 2012.
With 14 new unicorns this year, almost a third of the total, fintech comes out as the top sector again. Enterprise software comes in second with six new unicorns, while security and energy tie for third place with four new unicorns each.
This year also saw the first unicorns in emerging subsectors, such as carbon capture (Switzerland’s Climeworks) and carbon accounting (France’s EcoVadis), showing that climate technology companies continue to grow in size and impact.
Look ahead to 2023
There’s hardly ever been a tougher time for predictions, and this year’s cohort confirmed that while unicorns aren’t dead, their stay isn’t granted.
Reduced valuations should come as no surprise for later stages and follow-on rounds as expectations are recalibrated around new risks and rewards.
Some current unicorns may lose their status by large margins – just look at former unicorn Oda as a cautionary tale – but others will still get the chance, as large amounts of dry powder have yet to be deployed at some high-level events.
Some movement on the M&A side can also be expected along the lines of the recent Getir-Gorillas saga, and the outlook for European unicorns eyeing IPOs remains bleak.
For a more in-depth data journey of 2022’s unicorns, check out our Pro Briefing here.
Federico Scolari is an intelligence analyst at Sifted. Amelie Bahr is a senior intelligence analyst at Sifted.
*Sifted defines a unicorn as a privately held, VC-backed company valued at $1 billion. To be considered unicorns, startups must: have reached a valuation of $1 billion on any round before IPO or acquisition, have been founded after 2005 and be established and based in Europe. Companies valued at $1 billion at IPO but never in any previous funding round are not considered unicorns as they are no longer privately held at that valuation