Biweekly VC Insights by Uniborn #37

Inside: Which startups are blowing up the market right now and which teams have unicorn potential
Barbara Krassner
🇬🇪 Uniborn Team
3 min read

TGIF! As we gear up for the weekend, let's take a quick rewind over the past fortnight and catch up on all that's been making waves in the European venture scene.

🔥 A brief overview of the current venture capital landscape 

What's been catching our eye lately, you may wonder? Well, company valuations are on the upswing, especially in the seed and early stages. We've also witnessed some big-ticket tech IPOs making waves, and it seems like investors are starting to get more optimistic — they're talking about it, at least.

But hold your horses; it's not quite the break of dawn yet. There are still plenty of challenges and concerns looming:

  • Venture capital deals are closing at a slower pace than usual. In the US, for example, in the first quarter of 2024, the deal activity hit its lowest quarterly average since 2017.
  • The mood among LPs is still uncertain, with fundraising numbers lagging behind. Just $9.3 billion was raised in the United States, a mere 11.3% of the total amount in 2023. Europe paints a slightly brighter picture with deals totaling $17.66 billion.
  • In the private markets overall, global exits in the first quarter of 2024 amounted to nearly $120 billion, falling short of the pre-2021 levels.

For more info, check out the PitchBook-NVCA report (note: these figures are preliminary estimates, with final numbers set to be unveiled next week).

🔥 These startups are setting the trends and leading the pack

First up, let's take a peek at the top 100 fastest-growing companies in the UK and Ireland ecosystems (the birthplaces of gems like Revolut, Starling, and Airtel ATN). We're talking about startups that have seen a surge in revenue growth over the last three fiscal years, ranked by their CAGR. 

Who's stealing the show? It's the Fintech projects (making up about a third of the list) and the B2B SaaS (with 25 startups out of a hundred).

Now, on to the latest buzz from Y Combinator's Winter Demo Day, where European startups are making their mark. Out of the 257 startups in the current batch, 14 are from Europe, representing 5% of the total cohort. And approximately 100 of the 592 successful founders are of European origin, representing 16% of the batch. By comparison, in last year’s ranking, Europeans made up 21%.

These rising stars (who have publicly announced their participation) are mainly from the vibrant hubs of Paris and London. More than half are diving deep into the realm of AI, while a third are in SaaS.

For more info, check out the Sifted ranking and article.

🔥 Another promising startup niche: Foodtech, namely Agritech

Europe is taking its place as a food technology powerhouse. With a 32% share of global investment in farm management, supply chain optimization, alternative proteins, and other innovative Agritech areas, Europe has surged from just 14% in 2020.

Of course, it's not all roses; investments in this sector worldwide have halved compared to 2022. Europe, too, has experienced a notable reduction, with a decrease of 35%.

It is also interesting that startups in this domain find it notably easier to secure funding in the early stages rather than in later Series B or C rounds.

Here are six megatrends in the food industry. (Image: DigitalFoodLab)
Here are six megatrends in the food industry. (Image: DigitalFoodLab)

For more info, check out the DigitalFoodLab data.

🔥 When seeking out future big exits, consider these founder qualities

The recent release of The Unicorn Founder DNA Report scrutinizes over 845 unicorn companies and 2,018 founders from the US and UK, yielding intriguing insights:

  • 70% of highly successful startups have women, immigrants, and people of color among founders
  • A mere 34% of unicorn founders worked for big brands before venturing out on their own.
  • More than half of victorious founders hold degrees from the top 10 universities worldwide, with 70% of their teams boasting STEM backgrounds.
  • Serial entrepreneurs constitute 50% of unicorn creators.
  • Sole founders accounted for only one in five unicorns.
Here's how the portrait of unicorns has evolved over the years in the context of immigration. (Image: DigitalFoodLab)
Here's how the portrait of unicorns has evolved over the years in the context of immigration. (Image: DigitalFoodLab)

For more info, check out the Defiance Capital research.

Also, take a look at our article How Angel Investors Can Spot the Next Unicorn 😉

Cover image: Unsplash

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