Around 10 years of ecosystem development has left European high-growth companies in a much stronger position counter to their global rivals, according to new research from the FT and Statista dubbed the FT 1000. And in the realm of tech startups, they continue to create the software which is, famously, eating the world.
Despite trade wars, Brexit and a European economic slowdown, tech companies in Europe are still thriving. In fact, some are positively booming. Key companies named in the list include Deliveroo, Taxifym, Darktrac, Buzzoole and Perkbox.
As the report implies, tech is simply in a different economy to the normal economy, and the reasons are simple: Disrupters are better protected even if economic conditions deteriorate because many are created simply to take market share from incumbent businesses. Even as these incumbent businesses feel the headwinds of the real economy, tech companies are side-stepping them, whether it be via AI, automation or just sheer faster growth.
The lowest ranked company to make the list had a compound annual growth rate in revenue of 37.7 percent, up from 34.6 percent last year.
Speaking to the FT, Toby Coppel, partner at London-based Mosaic Ventures, said the ecosystem is maturing: “There are many more successful companies like Spotify where the next generation of founders are trained and then leave to start-up the next company, often with former colleagues [to start something new].”
Ophelia Brown, founder of Blossom Capital, said founders no longer up sticks and move to Silicon Valley, while Brent Hoberman of Founders Forum says they have counted 36 new unicorns in Europe and Israel last year.
However, Brexit is clearly having an effect: U.K. startups are seeking licenses and opening HQs or major offices elsewhere in Europe to offset the risks of talent or funding becoming scarcer in Brexit Britain. Plus, there is very little data on the startups and entrepreneurs that have simply decided to stay away from the U.K. during this chaotic Brexit period.
As Philippe Botteri of Accel says: “The Brexit impact will be people.”
Other issues tech companies face in Europe will sound familiar to U.S. ears: The “techlash” by regulators and privacy concerns to name two. But others, like accessing a large single market, remain a challenge for Europe to pull together, and are not problems U.S. startups have to face nearly as much.
However, European tech companies are also in an equally good place as concerns the hottest new technology trend, such as the growing use of big data in fintech and healthcare, robotics and food delivery, AI and quantum computing.