Macro Econom I A

In Partnership with &
The State of
European Tech 2018
Contents
00 2018 Key Findings 3
01 The State of European Tech 2018 7
02 Tech & the European Economy 14
03 Diversity & Inclusion 26
04 Europe’s Got Talent 43
05 Tech Hubs 62
06 Research & Development 82
07 Regulation 90
08 Investors & Investment 102
09 Great European Companies 126
10 Challenges 138
11 Mythbusting 141
12 Predictions 145
13 About 151
14 Appendix 159
2 In Partnership with & www.thestateofeuropeantech.com

2018
Key Findings
What’s changed for It’s been another record year for investment in European
tech and the sector is powering growth in Europe’s
European tech in the

stagnant economy. Yet not everyone is benefitting from the
boom. The gains are not being democratized by investors.
Companies need to address diversity and inclusion tools
past 12 months? and unlock hidden talent pools.
KEY FINDINGS
01 Another record year for investment into the European

tech ecosystem
02 Europe urgently needs to fix its diversity & inclusion

problem
03 Europe’s tech industry is the best hope for growth for

a stalling European economy
04 The gains from Europe’s tech boom are not yet being
democratised
05 Mobilising Europe’s hidden tech talent pool can unlock

huge upside
06 Europe is producing $B+ companies at a level that is

15x+ higher than a decade ago
07 Top highlight statistics for Europe
In Partnership with & www.thestateofeuropeantech.com

2018 Key Findings
Another record year for investment into

the European tech ecosystem
CAPITAL INVESTED
$ 23B
Record sums invested in Europe’s technology
ecosystem- $23bn in 2018 up from just $5bn in 2013.
TECH IPO COMPANIES
4X $5B
There were four tech IPOs or direct listings of European tech
companies in 2018 that reached valuations of more than $5B
on opening day, including Europe’s largest ever venture-
backed publicly-listed tech company, Spotify. In total, Europe
contributed three of the top 10 largest tech IPOs globally of 2018.
Europe urgently needs to fix its diversity

& inclusion problem
CAPITAL INVESTED
93%
93% of all funds raised by European VC-backed
companies went to all-male founding teams in 2018.
GENDER DISCRIMINATION
46%
Almost half of women reported that they have experienced
discrimination in the European tech sector. This is a point
of clear tension with the 75% of respondents who think the
culture at their European startup is inclusive. In European
tech, discrimination appears to be someone else’s problem.

2018 Key Findings
Europe’s tech industry is the best hope for

growth for a stalling European economy
TECH INDUSTRY GROWTH
5X
Europe’s tech (software) industry is growing 5x faster than
the rest of the European economy in terms of Gross Value
Added, a level that has accelerated in recent years.
Eurostat
EMERGING TECH HUBS
4%
The European tech workforce grew 4% in 2018 (source:
LinkedIn), a significant difference to overall EU employment
growth of 1.1%.
European Commission
The gains from Europe’s tech boom are not

yet being democratised
PENSION FUNDS INVESTMENT
45X
Pension funds are not yet democratising Europe’s tech sector
boom - over the last five years, pension funds have invested just
$1.7B in European VC, but have invested 45x more in European
buyout funds, equivalent to more than $75B over that period.
HNW INVESTMENT
$ B5
European tech growth and record success has not gone
unnoticed by family offices and high net-worth individuals
(HNWs). Over the last five years they have invested over $5bn
in European venture capital funds. Only government agencies
have invested more in European VC in that same period.

2018 Key Findings
Mobilising Europe’s hidden tech talent

pool can unlock huge upside
PROFESSIONAL DEVELOPERS
5.7M
Europe’s ecosystem is more distributed
and more interconnected than ever - there
are now 5.7m professional developers
in Europe, up by 200,000 on 2017. This
compares to the 4.4m in the US, a number
that stayed flat year on year.
EMERGING TECH HUBS
15
Still more European tech hubs will
emerge. Cities such as Cologne, Warsaw
and Vienna all have larger developer
populations than Stockholm and active
local tech communities, but have yet to
attract as much investment. In fact, there
are 15 European cities with professional
developer populations of 50,000+ that
have seen less than $1B in total capital
investment since 2013.
Europe is producing $B+ companies at a

level that is 15x+ higher than a decade ago
$B+ COMPANIES
61
European $B+ companies founded in the past 15 years, including
a record 17 new companies that first surpassed the milestone in
2018. Europe has also now produced 12 companies with a $5B+
valuation, of which 5 have grown to more than $10B.
SUCCESS GROWTH
15X
Two companies founded in the 2000s had reached $B+ by 2008.
Compare that to 31 founded in the 2010s that reached that
milestone by 2018 - an increase of 15.5x. Where will the 2010s
end up by 2028?

The State of
European Tech
2018
Back once again like This is the fourth edition of the State of European Tech
report, the single, most comprehensive data-driven story
the renegade...er...
of European technology today. We’ve gathered data from
world-class data partners and a survey of 5,000 members
of the tech ecosystem, from founders to students,
data analysers! investors to researchers. We’ve tried to tell the most
important stories. We cover diversity and inclusion, talent,
regulation, investment, research and development, and the
great, global disrupters out of Europe.
ARTICLES
01.1 Welcome to the State of European Tech 2018
01.2 Executive Summary

Welcome to the
State of European Tech 2018
We’re proud to present the 2018 edition of the State

of European Tech report, which is once again the
single, most comprehensive data-driven story of
European technology today.
It’s been another incredible year We write this report to shine a light that this report is a lot longer than in
for European tech - but there are on the issues that matter in the previous years. This was a deliberate
some significant challenges too European ecosystem. We aim to enrich decision. Our data is open, and our
conversations, highlight challenges, hope is as many people as possible will
and support more informed decision use it to help tell the stories that matter
making by closing the knowledge gap to them in Europe.
between perception and reality.
Each year we aim to produce a

resource that is more comprehensive
than the last. To this end, you’ll notice

Photo: Anrietta Kuosku
Executive Summary
For the past four years, we’ve produced an exhaustive deep dive into
the European tech ecosystem by analysing the rich insights of our data
partners. Every year the data busts another myth about our ecosystem:
from pointing out that Europe actually has more developers than the US,
to quantifying European advances in deep tech.
Another record breaking This year we’re at risk of sounding like a $23 billion - up from $5 billion just five
broken record about breaking records years ago. European founders created
year for European tech - but we can’t dispute the data. In 17 billion-dollar companies. And in
another extraordinary year, investment 2018, Europe produced three of the ten
in European tech reached a record biggest venture backed public listings.
Technology has become At a macro-level, Europe’s technology faster than the rest of the European
sector is booming as the wider economy. This year’s report suggests
a motor for growth in the economy is stuck in the doldrums. that for a number of reasons, this
European economy As of Q3 2018, European growth was motor will only become more powerful.
flatlining at 0.2%, the lowest rate for The importance of the tech to the
four years. Europe’s software industry overall economy will only increase.
is now growing at least five times
European tech Last year we found that Europe was This all contributes to ‘density’ -
experiencing a ‘Battle Royale’ for talent. which historically has been a crucial
achieving density This year was the year Europe figured precondition for explosive growth.
out how to effectively mobilise its Europe is certainly achieving density,
deep pools of talent. The tech sector is but it’s doing it its own way. What is
attracting more participants - whether interesting is that the developer pool is
measured by the healthy increase in growing fastest outside those countries
professional developers or the uptick that have historically attracted the most
in talented executives moving into tech investment: Turkey, Spain and Russia’s
from other sectors. The report shows pool of developers have been deepening
dense areas of talent coalescing around the most rapidly. All this will lead to a
universities, anchor tech companies, massive potential upside for the wider
and innovation hubs, leading in turn European economy as capital eventually
to increases in investment, and flows into these new communities.
growth in anchor tech companies.
Europe is a research This year’s report also shows science and tech converge further,
that we are only scratching the there is huge scope to strengthen
powerhouse surface of the potential of Europe’s the link between European STEM
research community, and not fully and startups. Europe has a research
harnessing our own cutting-edge community larger than U.S. and China
science. An analysis by CERN, one - we need to make sure this becomes
of this community’s most influential the hugely powerful differentiator it
members, demonstrates that as should be.

Photo: Kai Kuusisto
Let Europe be Europe A word to the naysayers: irrespective horizon periods. We believe this is a
of the huge strides European tech has bellwether for a changing landscape.
taken in the last few years, our tech Let’s not forget that 95% of the value
sector will continue to be compared to creation of today’s US tech sector
the performance of Silicon Valley. is from companies founded 15 years
ago or more, and that the early tech
And as the ecosystem accelerates, successes of ARM, Amadeus and Ocado
we are increasingly cool with that! For were not venture-backed. Given that
a long time, US VC has outperformed 21 European companies have been
European VC in terms of portfolio founded and scaled to billion-dollar-
returns, but that is increasingly untrue. plus valuations with the support of
The latest historical performance data venture capital since 2010 alone, we are
shows that European venture has been confident that Europe has caught up on
outperforming US venture in recent North America’s head start.
A big diversity and This year’s report also unearths several way behind where it needs to be. This
figures which are extraordinary for stark reminder of our shortcomings is
inclusion problem all the wrong reasons. The State of timely, and it’s important that we draw
European Tech has always highlighted the right conclusions.
the challenges Europe faces, but this
year, we’ve identified a particularly Reporting this data is a first step in the
serious problem: 46% of women told us right direction. Only by measuring the
they have experienced discrimination problem can you start to solve it. To
in the European tech industry. As our take on this challenge, we’ve worked
chapter on diversity and inclusion with Diversity VC to launch an industry-
shows, this statistic is the tip of the first resource: a practical and hands-on
iceberg. While most investment figures guide for technology entrepreneurs
in this report spell good news, the fact that will help them build companies
that all-male founding teams received that have diversity and inclusion at
around 93% of the capital and 85% of their core. It’s not a complete solution,
the deals speaks for itself. Women and but we hope it’s a contribution that
minorities are underrepresented at founders will find useful nonetheless.
every level of the ecosystem. Corporate You can find the toolkit at
policy on diversity and inclusion is still www.inclusionintech.com

But we can still learn from As Europe catches up, it is vital that we Niklas Zennström founded a streaming
make the most of our second mover company called Kazaa. Kazaa was a
the successes and failures advantage - both in the companies we failure, but a group of Swedes led by
of others build, and in our approach to building Daniel Ek were paying close attention,
them. European tech has escaped most and learned important lessons.
of the backlash which has engulfed Learning from the mistakes of the
big US technology companies and previous generation led to the creation
characterised media coverage this of Spotify. Spotify has unequivocally
last year. For this to continue, we’ll proven that today, European founders
need to learn from past failures, and can raise the right capital, hire the best
act ethically from day one. European talent, go the full distance, stave off
technologists have already shown we ferocious competition and win on a
can learn from the lessons of the past global stage. Spotify will now become
in terms of business strategy. Before the spur and inspiration for other
he founded Skype, Atomico’s CEO European breakout successes.
Another broken record: This report has consistently highlighted offices and high net worth individuals
the need to close the institutional have spent the last five years investing
Bridge the funding gap, investor funding gap. Over the last five $5 billion in venture capital. If pension
democratise European years, pension funds have invested just funds can rebalance their allocations
tech’s success $1.7 billion in European VC, but have away from legacy industries towards
invested 45x more in European buyout gamechanging technology instead, they
funds, equivalent to more than $75B can democratise access to the spoils of
over that period. Meanwhile, family European tech.
An ecosystem irreversibly The European ecosystem has levelled the seeds of success this year were
up. Today, as Spotify has shown us, planted a decade ago. That is why we
changed European founders have access to should expect even greater success
sophisticated investors, can hire the in the years to come. As long as we all
best talent, go the full distance, stave continue to learn from both success
off ferocious competition, go public and failure, will European tech reach
and win on the global stage. Europe is the heights we know it to be absolutely
now reaping the early rewards from the capable of.
transformation of its tech ecosystem-
Thank you to all our partners I’d like to dedicate my final words to them this report would not have been
thank all of our data partners and most possible.
importantly, Slush and Orrick. Without
Tom Wehmeier
Partner, Atomico

A Word from Slush

Scrolling through the figures of The problem of diversity that Europe,
the State of European Tech 2018 like the rest of the world, is having can
report, it is easy to feel a nice sense be turned into an opportunity. By lifting
of confirmation to what we’ve been up a more diverse set of role models will
seeing and hearing throughout the affect the decisions of to-be founders.
year in countless conversations with Emphasizing the role that humanities
entrepreneurs: European tech is and arts, in addition to STEM, will
graduating. Record numbers of both play in the future development of
raised funding and exits speak louder technological solutions should be done
than words, and they have interesting upfront if we want to gain an edge from
consequences. the magnificent creative industry in
Europe.
As the amount of successful scale-up
companies continues to rise on the One more additional thing that
continent, so does the need for ever Europe really stands to benefit from
greater amounts of top tier talent. is our strong academia. Nailing
the combination of bleeding-edge,
As the access to venture capital is hardcore research and practical, world-
no longer the biggest bottleneck for class company building should be one
European tech, our eyes are turning of our main targets for the upcoming
towards cultivating the next generation years.
of world-class talent for the current and
future tech companies that are set out Almost all businesses that want to
to solve some of the biggest challenges make it big in Europe have to think
on the planet. international or global from the
beginning. This is a mindset that
For this we need a diverse talent pool to we should utilise also in the next
be part of building the European tech generation of education for future
companies. entrepreneurs. Stay tuned!
Andreas Saari
CEO, Slush

A Word from Orrick

There has been a nearly five-fold innovation – as companies in every
growth in European venture capital sector recognize the need to adapt to
investment in the last five years. the tech transformation.
There are five times the number of
unicorns – with at least 17 new billion Altogether these trends point to a
dollar plus companies added in the robust future for European tech.
past year alone. The European tech
sector has produced nearly four times However, the Report’s purpose is
the job growth rate of the general to shine a light on all of “the issues
economy, resulting in a talent pool of that matter” in the European tech
programmers and STEM researchers ecosystem. We applaud Atomico for
surpassing that of the United States. highlighting some deeply troubling
ones: 46% of women in tech report
Tech and innovation is no longer on the experiencing discrimination and only
sidelines in Europe – it is driving the 7% of capital went to female founded
economy. That’s the clear take-away companies or mixed gender founding
from this year’s State of European Tech teams. That’s not right – and it’s not
Report. sustainable if Europe truly wants to
innovate. We also applaud Atomico’s
At Orrick, we see it in our practice collaboration with Diversity VC to
every day as we have helped founders, provide guidance to founder teams on
investors and corporate venture clients how to build a diverse and inclusive
raise or deploy more than $3.7 billion culture. Awareness and education
across Europe over the past year. are a key first step. Investors have an
essential role to play. The good news
As a global tech law firm, we’re not is that there’s an incredible amount
surprised to see investors from around of unfunded talent out there. Let’s all
the world chasing strong returns from participate in the conversation about
their European investments. While U.S. how to dramatically improve next year’s
investment returned to 2016 levels after results.
another record-breaking performance
last year, investment from Asia We’re grateful to Atomico for the
continued to grow. opportunity once again to help provide
this data to the tech community in
We’re encouraged by corporate venture Europe and globally. We hope you
investment growth, particularly from find it as useful as we do in seeing the
outside traditional tech industries. patterns and opportunities in this rich
This affirms the strong demand for and promising ecosystem.
Chris Grew
Partner,
Technology
Companies Group
Orrick

Tech & the
European Economy
Continuing to drive While Europe’s overall economy and traditional industries
are stuck in the doldrums, booming tech represents
the best hope for growth. Tech firms are powering job
significant growth creation and ambitious founders are tackling some of the
world’s biggest problems. All of that has members of the
ecosystem optimistic - except in the U.K. where sentiment
is not at the same levels as elsewhere.
ARTICLES
02.1 Powering Workforce Growth
02.2 Tech: The Motor for GDP Growth
02.3 Heritage as opportunity
02.4 Smiles (almost) all round in European techv
02.5 Tech for Good: A European Opportunity?

Powering Workforce Growth
Employment growth TheinEuropean

European tech industry continues
economy as a wholeto power remarkable
is stalling. workforce growth, leading to a signi cant acceleration
The European
in the rate of change in 2018. Europe's tech workforce grew 4% in 2018, up materially from 2.6% in 2017. More
Commission’s latest forecast for 2018 employment growth implies a drop to just
importantly, Europe's tech workforce is now growing at 3.6x the rate of employment growth in the European
1.1% year-on-year growth,
economyaasmaterial
a whole decline from the level seen in 2017.
EU employment growth, 2016-2018

1.5%
1.5
LEGEND 1.3%
EU employment YoY growth
1.1%
YoY growth (%)

1.0
0.5
0.0
2016 2017 2018
Note:
Source: European Commission.
European Commission
It is worth comparing EU employment growth rate TECH WORKER POPULATION GROWTH

to the remarkable worker population growth that
4 %
powers the European tech industry. Europe’s tech worker population grew
4% in 2018.
The French tech worker population is growing

The French tech worker population is growing signi cantly
significantly fasterfaster
than than
in Germany and the UK.
in Germany and the UK
Tech worker population growth in France,

Germany and the UK in 2018 France 7.3%
LEGEND
YoY tech worker population growth (%) in 2018
Germany 4.0%
United Kingdom 3.3%
0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0

YoY growth (%)
Note:
Based on an analysis of sample pool of LinkedIn members and
the difference between those in 2018 working in the Tech Source:
Sector in each country from this sample pool.

02.1 Powering Workforce Growth
France’s tech worker population grew at the fastest WORKFORCE GROWTH

rate of any European country in 2018
7.3 % French tech workforce growth in 2018,

based on a comparison of the size of
the workforce in October 2018 versus
October 2017.
The rate of tech workforce growth across Europe

The rate of tech workforce growth across Europe is not equally distributed with workforces in some countries
is not equally distributed, with workforces in some
growing much faster than others. France, for example, hit 7.3% growth in 2018, making it comfortably the fastest-
countries growing much faster than others.
growing tech workforce in Europe
Finland 3.9%
YoY growth in the worker population of the
Top 20 largest tech workforces by country in Italy 3.5%
2018
Sweden 3.4%
DATASET : 1 1- 20
United Kingdom 3.3%
LEGEND
Denmark 3.3%
2018
Romania 3.1%
Netherlands 3.0%
Bulgaria 2.8%
Czech Republic 1.9%
Hungary 1.1%
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0

YoY growth (%)
Note:
Based on an analysis of sample pool of LinkedIn members and
the difference between those in 2018 working in the Tech Source:
Sector in each country from this sample pool and those in 2017.
Photo:Jussi Ratilainen
Tech: The Motor for GDP Growth
There is an ever-widening gap in the indexed growth rates of the tech (software) and non-
The implication of this sustained difference in growth rates is starkly visible when looking at indexed growth of the
tech parts of the European economy.
tech (software) Over the
and non-tech past
parts 15European
of the years, tech (software)
economy. Over thehas grown
past to tech (software) has grown to
15 years,
hit 194% of its relative value
hit 194% in 2002.
of its relative value in
Chain linked volumes of tech and non-tech 200 194

188
GVA (indexed 2002-2016)
Chain linked volumes (indexed 2002-2016)

173
175
LEGEND 163
Tech 155
Non-tech 146
150 141 141
136 136
133 133
130 128 129
124 125 126
121 123
125 118
112
107
100 100
100
75
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Note:
2016 is the most recent year for which full NACE breakdowns of Source: Eurostat
European GVA are available. Tech refers to the European
software industry, or NACE J62-63. Non-tech is everything Eurostat
else.
Europe’s software industry growth dramatically ECONOMIC GROWTH

outpaces the rest of the European economy
5x
Latest figures show Europe’s
software industry Gross Value Added
is growing 5x faster than the rest of
the European economy
Eurostat
While the long-term historical trend in relative growth rates has been impressive, more
While the long-term historical trend in relative growth rates has been impressive, more recently the speed of
recently the speedgrowth
of growth between
between tech
tech and and non-tech
non-tech has divergedhas diverged
even even further.
further. Today, Today,
the European tech (software) industry is now
the European techgrowing
(software) industry is now growing 5x
5x faster than the rest of the economy faster than the rest of the economy
% Growth YoY of tech and non-tech

3.1%
contribution to European economy by GVA 3.0
(2016 versus 2015)
LEGEND
YoY growth (%)
YoY growth (%)

2.0
1.0
0.6%
0.0
Tech* Non-tech
Note:
*Tech refers to the European software industry, or NACE J62- Source: Eurostat
63 Eurostat

Over the last 10 years, many of these traditional industries upon which the European
economy is so dependent have either stagnated or declined, undermining the overall
Over the last 10 years, many of these traditional industries upon which the European economy is so dependent
rate of growth in European
have eitherGross Value
stagnated or Added
declined, undermining the overall rate of growth in European Gross Value Added
146
Chain linked volumes of tech and selected 142
traditional industries GVA (indexed 2007-
140
2016)
Chain linked volumes (indexed 2007-2016)

131
123
L EG END 117 118 118
120
Tech 112 111
110 109 110
107
Real estate activities 103 103 103 103 103
102
100 100
Wholesale and retail trade, transport, accommodation 98
100 94 95 94 95
and food service activities
89 90 89 90
88 87
Industry 85 85
83
Financial and insurance activities
80
Construction
Telecommunications
60
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Note:
European GVA are available. Tech refers to the European Eurostat
software industry, or NACE J62-63.
Yet the European economy today remains heavily dependent on traditional

Yet the European economy today remains heavily dependent on traditional industries, such as industrial
industries, such asmanufacturing,
industrial manufacturing, construction,
construction, retail retail and transportation
and transportation
21%
Share of total gross value added in Europe Industry (except construction)
19%
Wholesale and retail trade, transport,
19%
L E G E ND accomodation and food service
activities
% of total GVA (2002)
Public administration, defence, educa…
% of total GVA (2016) 19%
Real estate activities

11%
Professional, scientific and technical …

11%
6%
Construction
Financial and insurance activities

5%
Arts, entertainment and recreation; ot…

4%
Tech
3%
2%
Agriculture, forestry and fishing
2%
Telecommunications
1%
Publishing, motion picture, video, tele…
1%
Publishing activities
1%
Motion picture, video, television progr…
0 5 10 15 20
% of total gross value added
Note:
Europe is based on EU-28. 2016 is the most recent year for Source: Eurostat
which full NACE breakdowns of European GVA are available. Eurostat
Tech refers to the European software industry, or NACE J62-63

Photo: Kai Kuusisto
The European tech (software) industry contributes around $400 billion to the
European economy today, though it remains just a fraction of total European
The European tech (software) industry contributes around $400 billion to the European economy today, though it
Gross Value Added,remains
accounting for justof2.5%
just a fraction of total European
total European Gross ValueGVA
Added, accounting for just 2.5% of total European GVA
Tech industry contribution to the European 400.0

$376.0B
economy by total Gross Value Added ($B) and
2.4
% of total (2002-2016) $335.0B
$300.0B
300.0
L EGEND
Gross Value Added ($B)
$2.1B
$264.0B $263.0B 2.2 Tech as % of total GVA
Tech
$234.0B $2.0B
Tech as % of total GVA $208.0B
200.0 $194.0B $1.9B
$1.9B 2.0
$1.8B
$1.8B
$1.8B
100.0
1.8
0.0 1.6
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Note:
European GVA are available. Tech refers to the European Eurostat
software industry, or NACE J62-63
At ~$400 bllion, Europe’s software industry ECONOMIC GROWTH

is still just a fraction of overall European
2.5 %
Gross Value Added Latest data shows Europe’s software
industry accounts for 2.5% of total
Gross Value Added in Europe, up from
1.9% 10 years ago
Eurostat

Heritage as Opportunity
There is huge equity value locked up in TRADITIONAL INDUSTRY

traditional industry in Europe
$8.8T Total value by market cap of European

companies from traditional industries in
the S&P Global 1,200
S&P Global Market Intelligence
As technology becomes an increasingly more transformative force across all parts of

the economy, there is a huge opportunity to digitise and reignite Europe’s traditional
As technology
industries with trillions becomes
of dollars an increasingly
of value in play. Themore transformative
combined market force across all parts of the economy, there is a huge
capitalisation
opportunity to digitise and reignite Europe's traditional industries with trillions of dollars of value in play. The
of European constituents of the S&P Global 1,200 equates to $8.8 trillion in just the top
combined market capitalisation of European constituents of the S&P Global 1,200 equates to $8.8 trillion in just
10 most valuable traditional industries.
the top 10 most valuable traditional industries.
Energy $1,270B
Total market cap of European public
companies in S&P Global 1,200 by industry Financial Services $1,231B
group ($B)
Bio & pharma $1,150B
LEGEND Materials $924B
Total Market Cap ($B) Food & Drink $893B
CPG $777B
Retail $734B
Industry $648B
Insurance $608B
Mobility $523B
0 200 400 600 800 1,000 1,200 1,400

Total market cap ($B)
Note:
Based on an analysis of the industry breakdown by market cap, S&P Global Market
Source:
revenue, market cap/revenue multiple and age of the 328 Intelligence
constituents of the S&P Global 1,200 Index from Europe. Data
as of October 2018. S&P Global Market Intelligence
Those same 300 or so European companies control more than $6.9 trillion in annual
Those same 300 or so European companies control more than $6.9 trillion in annual revenue and represent a giant
revenue and represent a giant
potential potential
opportunity opportunity
for any for companies
European tech any European techtocompanies
that seek take on those incumbent giants in their
that seek to take on those incumbent
traditional industries. giants in their traditional industries
Energy $1,642B
Total revenue of European public companies
in S&P Global 1,200 by industry group ($B) Mobility $1,012B
Materials $906B
LEGEND
Total revenue ($B) Insurance $843B
CPG $589B
Financial Services $537B
Food & Drink $422B
Industry $375B
Bio & Pharma $344B
Retail $269B
0 250 500 750 1,000 1,250 1,500 1,750

Aggregate LTM revenue ($B)
Note:
Source:
revenue, market cap/revenue multiple and age of the 328 S&P Global Market Intelligence
Intelligence
as of October 2018.

02.3 Heritage as Opportunity
Europe’s most valuable public companies - 95% TRADITIONAL INDUSTRY

of which come from traditional industries - have
102
demonstrated remarkable endurance until now Median age in years of the 348 European
companies that are constituents of the
S&P Global 1,200 index. This compares to
64 for North American companies. Do the
old have the speed it takes to respond to
tech-enabled change?
Interestingly, the median age of the incumbent companies in these

industries is well over 100 years. In the battle of incumbent versus startup,
Interestingly, the median age of the incumbent companies in these industries is well over 100 years in most cases.
it is not the young who
In thebeats the
battle of old or the
incumbent large
versus who beats
startup, it is notthe
thesmall. It isbeats the old or the large that beats the small. It
young that
those who are fastisthat are
those more
that likely
are fast thattoare
succeed against
more likely the slow.
to succeed against the slow.
Insurance 155
Median age in years of European public
companies in S&P Global 1,200 by industry Financial Services 154
group
Industry 4.0 135
LEGEND Food & Drink 130
Median Age of Companies (years) CPG 125
Materials 113
Mobility 102
Biology 2.0 92
Retail 66
Energy 62
0 25 50 75 100 125 150 175

Median age (years)
Note:
Source: S&P Global Market Intelligence
revenue, market cap/revenue multiple and age of the 328 Intelligence
as of October 2018.

Photo: Joonas Linkola
Smiles (almost) all round in
European tech
Europe’s tech ecosystem remains characterised by a strong level of growing optimism

Europe's
about the future. This tech ecosystem
increase remains
in optimism characterised
is most evident by
in aEastern
strong level
andofSouthern
growing optimism
Europeabout the future. This
where there is real momentum. The UK, perhaps unsurprisingly, registered the largest momentum in building the local
increase in optimism is most evident in Eastern and Southern Europe, where real
tech ecosystems is evident. The UK, perhaps unsurprisingly, registered the largest downturn in optimism by a wide
downturn in optimism by a wide margin.
margin.
Are you more or less optimistic about the Central Europe & Baltics
future of European technology today than
you were 12 months ago? DACH
LEGEND Eastern Europe
More
France & Benelux
About the same
Less
Nordics
Southern Europe
UK & Ireland
0 20 40 60 80 100
% of respondents
Source:
There continues to be a very strong sense of EUROPEAN TECH OPTIMISM

optimism across the European tech ecosystem
90
of the European tech community is either more
optimistic about the future of European tech, or
maintain the same levels of optimism compared
to 12 months ago. This remains the same as
2017, when 91% of respondents were more
optimistic or the same.

02.4 Smiles (almost) all round in European tech
2018 has seen some strong wins for the European tech
ecosystem and we are resoundingly optimistic and
excited by the opportunity set we see emerging.
“ 2018 has seen some strong wins for the European tech ecosystem and
we are resoundingly optimistic and excited by the opportunity set we
see emerging. There were several large IPOs in the region signalling
that the sector is maturing while still generating opportunities to
partner with emerging, disruptive companies that combine market
leadership, multiplying network effects and data-driven approaches
to create transformative businesses. Enhanced access to early
growth capital is also a hugely positive market driver, enabling more
Munish Varma companies to scale rapidly while still prioritising innovation.”
SoftBank Vision Fund
The factors that are driving optimism around the future of European tech are many and
The factors that are driving optimism around the future of European tech are many and varied. But when asked to
varied. But when asked to state
state the the mostgrounds
most important important grounds to
to be optimistic, be optimistic,
respondents gave arespondents
clear number one reason: the people that
gave a clear number oneupreason:
make the tech the people that make up the tech ecosystem
ecosystem
What, if anything, makes you feel optimistic People 27%
about the state of the European tech

Growth & Momentum 25%
ecosystem?
Startup Ecosystem 11%
LEG END
% of respondents European Collaboration & Diversity 11%
Capital Availability 9%
Tech Innovation 7%
Regulation & Political Climate 6%
Values & Ethics 5%
0 5 10 15 20 25 30
% of respondents
Note: Source:
Based on respondents that gave explicit responses only.
I’m definitely more optimistic than 12 months ago. I

think we’re seeing a marked shift in ambition in Europe,
and crucially, that’s being matched at an investor level.
“ I’m definitely more optimistic than 12 months ago. I think we’re seeing
a marked shift in ambition in Europe, and crucially, that’s being
matched at an investor level. What’s more, the increased cost of living
and hiring competition seem to have taken the blinkers off a lot of
Valley-bound entrepreneurs. This can only benefit Europe.”
Rosie Dallas
Fat Llama

Tech for Good:
A European Opportunity?
There is strong agreement across all survey respondents, including within the public
There is strong agreement across all stakeholders, including within the public sector, that European tech
sector, that European tech entrepreneurs will have a bigger impact than European
entrepreneurs are changemakers for a better world and that they will have a bigger impact on helping to important
governments
global when
problems than it comes
Europe's to solving important global challenges.
governments.
European technology entrepreneurs will do

Founder or startup/scale-up employee
more to address societal challenges
LEGEND
Agree Investor
Neither agree nor disagree
Disagree
Policymaker or public sector employee
Other
0 20 40 60 80 100
% of respondents
Source:
Round
Area of Focus City Country Selected Investors
Date
Selected early-stage European tech
companies with a strong focus on solving a Cambridge Glycoscience Biology 2.0 Cambridge UK 3Q18 Y Combinator
major global or societal challenge that have Cytera CellWorks Biology 2.0 London UK 3Q18 Y Combinator
raised in the past year from top investors
Lifebit Biology 2.0 London UK 3Q18 Connect Ventures, Pentech Ventures, Tiny VC
GTN Limited Biology 2.0 London UK 2Q18 Octopus Ventures, Pentech Ventures
Digital Health &

Quit Genius London UK 2Q18 Force Over Mass Capital, Village Global, Y Combina tor
Wellness
Propel Capital, STING, Seedcamp, The Nordic Web

TPH.co Future of Retail Stockholm Sweden 2Q18
Ventures, Wave Ventures
Veratrak Biology 2.0 Oxford UK 2Q18 Seedcamp
Carbo Culture Future of Energy Helsinki Finland 1Q18 Wave Ventures, Lifeline Ventures, Starlight Ventures
Digital Health &

Disior Helsinki Finland 1Q18 Maki.vc
Wellness
Future of Food &

KisanHub Cambridge UK 1Q18 IQ Capital Partners, Notion Capital
Drink
Sixfold Bios cience Biology 2.0 London UK 1Q18 Y Combinator, LombardStreet.io Ventures
Digital Health &

ThinkSono London UK 1Q18 AI Seed, WestTech Ventures
Wellness
Future of Food &

WeFarm London UK 1Q18 Localglobe, True Ventures, ADV, Norrsken Foundation
Drink
Fat Lama Future of Retail London UK 4Q17 Blossom Capital, Greylock Partners, Atomico, Y Combinator
Sweden
Hygglo Future of Retail Stockholm 4Q17 Norrsken Foundation, Schibsted Growth
(SWE)
LabGenius Biology 2.0 London UK 4Q17 Acequia Capital, Kindred Capital, System.One
Source:

02.5 Tech for Good:A European Opportunity?
There is a strong level of conviction in the power of ENTREPRENEURS AS CHANGEMAKERS

European tech entrepreneurs to be changemakers
64 %
for a better world % of public sector and policymaker
respondents who agree that European
technology entrepreneurs will do more to
address major societal challenges than
European governments
There is clear evidence that those working in European technology pay

close attention to the social and ethical impact of the companies for
There is clear evidence that those working in European technology pay close attention to the social and ethical
whom they work - this is reflective
impact of a global
of the companies trend.
for whom they work - this is re ective of a global trend.
100
The potential social and ethical impact of a
company plays a signi cant role in my
decision to invest in or work for that
75
company
% of respondents
LEGEND
Female, Agree 50
Male, Agree
Female, Neither agree nor disagree
Male, Neither agree nor disagree 25
Female, Disagree
Male, Disagree
0
Female Male Female Male Female Male
Venture capitalist Angel investor Other investor
Source:
Compared to US, we seem to be a bit further ahead

when it comes to sustainability. Especially when it
comes to food waste and climate consciousness, both
among consumers and within the food industry...
“ Compared to US, we seem to be a bit further ahead when it comes

to sustainability. Especially when it comes to food waste and
climate consciousness, both among consumers and within the
food industry...Compare this with President Trump’s decision to
withdraw from the Paris agreement a year ago...One thing that has
influenced us at Karma is that we’ve had mission driven, competent
and successful entrepreneurs, such as Niklas Adalberth founding
Norrsken Foundation, drive the agenda of using entrepreneurship to
Elsa Bernadotte build technologies that can solve social challenges on a global scale.”
Karma
The social impact of a company plays an important SOCIAL & ETHICAL IMPACT OF INVESTMENT
role in how VCs invest, especially female VCs
83 % % of European female VCs who agree that

the potential social and ethical impact
of a company plays a significant role in
their decision to invest in a company. This
compares to only 61% of male VCs.

Diversity
& Inclusion
Perception and Reality While the vast majority in Europe’s tech ecosystem
agrees diversity is a good thing, the community has
a major diversity problem. Women and minorities are
underrepresented at every level of the ecosystem.
Corporate policy on diversity and inclusion still lags.
ARTICLES
03.1 We’ve Got a Problem
03.2 We’re All Part of the Problem
03.3 Accelerating Change

We’ve Got a Problem
No single question in the survey received a stronger level of agreement than this one.
When asked if having a diverse team is a benefit to company performance, almost 90% of
No single question in the survey received a stronger level of agreement than this one. When asked if having a
respondents agree. If theteam
diverse European
is a benetech
t toecosystem wants to almost
company performance, achieve itsoffull
90% potential,agree.
respondents thenIf the European tech
diversity and inclusion has to
ecosystem be attoits
wants core.its full potential, then diversity and inclusion has to be at its core.
achieve
Having a diverse team is a bene t to

company performance
Female
LEGEND
Agree
Disagree
Male
0 10 20 30 40 50 60 70 80 90 100
% of respondents
Source:
The European tech community is dominated by men. Women account for just 22% of
The European
participants in tech-related tech community
Meetup events inisthe
dominated
region.by men. Women
Notably, account for
the industry isjust 22%to
failing of participants in tech-related
Meetup events in the region. Notably, the industry is failing to make any meaningful progress, having seen an
make any meaningful progress, having seen an increase of just a single percentage point in
increase of just a single percentage point in the level of female participation at European tech community events
the level of female in
participation at European tech community events in the past two years.
the past two years.
25
Share of female attendees in tech-related
22%
Meetup events in Europe 21% 21%
20
LEG END
Total in Europe (%)
% of female attendees
15
10
0
2016 2017 2018
Note: Source:
% of the reported gender of attendees only.
Diversity is one of our core values.

It’s vital to our business and has
been embedded from the beginning.
Diverse teams are better for
business, and better for creativity. Pip Jamieson
The Dots

The gender imbalance of the tech communities within different countries follows the
European-wide picture, though there are leaders and laggards. The top 10 countries for
female participation at tech-related Meetup events across the region is dominated by
countries from Eastern Europe, though it should be noted that female participation in the
Women are not equally present in tech communities in any
number one country, Albania, only reaches 33%.
European country
Albania 33%
Share of female attendees in tech-related
Meetup events by country Lithuania 28%
DATASET: TOP 10 CO UNTRIES Romania 28%
LEGE ND Bulgaria 26%

2018
Latvia 26%
Serbia 26%
Bosnia and Herzegovina 25%
Ukraine 25%
Portugal 25%
Sweden 25%
0 5 10 15 20 25 30 35
% of female attendees
Note:
% of the reported gender of attendees only. Only countries
with 100+ reported female attendees included.
Source:
We found only 1 female CTOonly

We found out1 female
of 175 CTO
CTOs outthat work
of 175 CTOsatthat
VC-backed
work at VC-backed European tech companies that raised a Series
A or Seriesthat
European tech companies B in raised
the pastayear.
Series A or Series B in the past year
Gender composition by job title for Chief Executive Officer 6% 94%
Executive-level positions of selected

Chief Technology Officer 1% 99%
European Series A and B venture-backed
companies
Chief Operating Officer 11% 89%
LEGEND Chief Financial Officer 20% 80%

Female
Chief Marketing Officer 21% 79%
Male
Chief Revenue Officer (or similar) 9% 91%
Chief Product Officer 9% 91%
CxO Other 19% 81%
0 20 40 60 80 100
% of Executives
Note:
Based on a sample of executives in CxO positions at 270
European VC-backed tech companies that raised a Series A or Source:
B round between 1 October 2017 and 30 September 2018.
The ‘class of 2018’ The 'class of 2018'European

of VC-backed of VC-backed European
tech tech companies
companies shows no
shows no improvement compared to similar analysis from
improvement compared2017.
to similar analysis from 2017
Share of women by position of senior leaders

9% 9%
and founders of selected European Series A
and B venture-backed companies (2018
versus 2017)
LEGEND 6% 6% 6%
2017
5%
2018
2%
1%
% of CEOs % of CTOs % of Founders % of all CxO leaders
Note:
Based on a sample of Founders and executives in CxO
positions at 270 European VC-backed tech companies that Source:
raised a Series A or B round between 1 October 2017 and 30
September 2018. 2017 data is based on a similar sample.

Europe is not necessarily tangibly better or worse than other

tech hubs – however, given that Europe is such a diverse range of
geographies and people this should be a key strength.
“ Lack of diversity is driven by a combination of factors that affect the

pipeline of talent in STEM subjects, the availability of diverse role
models, access to expertise and capital, social mobility and a range
of other issues. Europe is not necessarily tangibly better or worse
than other tech hubs – however, given that Europe is such a diverse
range of geographies and people this should be a key strength. I
am encouraged to see the subject of diversity and inclusion appear
Check Warner on the agenda of more tech companies and more VCs over the last
Diversity VC 12 months and to see so many funds participating in initiatives led
by Diversity VC and others. I hope that this translates to sustained
and impactful change – the first step though is understanding the
situation as it is today, which is why Atomico’s commitment to this
subject is so encouraging.”
The European tech industry's lack of diversity could not be more stark when it comes to how funding is allocated in
The European techTheindustry’s
European lack of diversity could not be morenotstark when it
the region. It istech industry's
arresting to seelack ofmale
that diversity could
founders and be more
founding stark
teamswhen it comes
receive 95% oftothe
how funding
capital is allocated
invested and in
comes to how funding
the is allocated
region. It is in the
arresting region.
to see It
that is
malearresting
founders to
and see that
founding all-male
teams
account for 90% of deals,. It is even more stark to see that the these shares receive
have95%
notof the capital
changed invested
in the last yearand
founding teams receive
account93% of the
for 90% capital
of deals,. invested
It is even moreand account
stark for the
to see that 85% of deals.
these shares have not changed in the last year
It is even more stark to see that these shares have not changed in the last years.
Capital Raised
Capital raised and # of deals by founding Capital Raised
DATASET: CAPITAL RAISED
100
Capital
team raised(%)
gender and # of deals by founding 100 92%
95% 94% 93% 93% 93%
95% 94%
team gender (%) 92% 93% 93% 93%
(%) (%)
LE GEND
of deals
75
LE GEND
/ #deals
Male 75
Male
Female
/ # of
(%) (%)
Female 50
Mixed
raised
50
Mixed
raised
Capital
25
The European tech industry's lack of diversity25could not be more stark when it comes to how funding is allocated in
Capital
the region. It is arresting to see that male founders 2%

and6%founding4% teams receive
2% 4%
95% of the capital
3% 4% 2%
5% invested5%
2%
and
6% 1%
account for 90% of deals,. It is even more stark0 to see
2% that the
2013
1%these shares
2014
4% 2% 4%have not
2015
3% changed
2016
4% 2%in the last
2017
5%
2%years.
2018
5%
0
2013 2014 2015 2016 2017 2018
Source:
Source:
DATASET:
# of deals # OF DEALS
85% 86% 86% 85% 85% 85%
75
Capital raised (%) / # of deals (%)
50
25
9% 9% 9% 9% 10% 10%
5% 5% 5% 6% 5% 5%
0
2013 2014 2015 2016 2017 2018
Source:

There is shocking imbalance in the flow of capital FUNDING DIVERSITY

to male versus female founders
93 % of all funds raised by European VC-backed

companies in 2018 went to all-male
founding teams.
The importance of diversity and inclusion has unquestionably gained an elevated

prominence in the news narrative around the tech industry in Europe. But the
level of discussionThe
around this topic
importance palesand
of diversity intoinclusion
insignificance relative to
has unquestionably other
gained an elevated prominence in the news narrative
core tech topics. Inaround
fact, the techpast
in the industry in there
year, Europe.have
But the levelmore
been of discussion
articlesaround this topic pales into insigni cance relative
devoted
to other core tech topics. In fact, in the past year, there have been more articles devoted to discussion of crypto
to discussion of crypto than to diversity and inclusion in Europe. We have an
than to diversity and inclusion in Europe. We have an opportunity to shine a much brighter spotlight on the
opportunity to shine a much brighter spotlight on the problem.
problem.
Share of total tech news narrative by topic 43.6%

Fundraising
area and region 34.0%
LEGEND 11.8%
Exits (IPOs & M&A)
European news sources
11.5%
US news sources
11.9%
Blockchain
8.1%
19.9%
Artificial Intelligence
16.7%
10.6%
Diversity & Inclusion
7.4%
Note:
Based on ~3,000 stories across 843 European news sources
(primarily UK focused) and ~2,700 stories across 1,103 US news Source:
sources from Septemeber 2017 to September 2018.

Photo: Petri Anttila
Each node represents an article. Links connect articles sharing similar language. Clusters
form when many articles share strong similarity, revealing topics.
Blockchain: 11.91%
Fundraising: 43.58%
Diversity, Discrimination,
Harassment, Pay Equity, Women:
10.62%
Diversity: 3.8%
Discrimination: 1.2%
Harassment: 1.3%
Pay Equity: 0.3%
Women: 7.4%%

The narrative
Interestingly, the reporting wearound
do seediversity and inclusion
on diversity is driven by
and inclusion inUS techincompanies,
tech Europeanleaving
newsa huge vacuum in terms of
European voices stepping up into the discussion. In the absence of European voices taking part in the discussion,
sources is driven by US tech companies. There’s a huge vacuum of European voices
does this leave an opportunity for leadership from European tech companies to help drive the discussion in a
stepping into the discussion.
positive way?We all have a responsibility to do and say much more.
Google 157
Top 10 most discussed companies in
European news stories focused on diversity Facebook 88
and inclusion in the tech industry
Twitter 45
LEGEND Microsoft 37
# of mentions Apple 35
Salesforce 30
PwC 24
IBM 23
McKinsey 21
Amazon 20
0 25 50 75 100 125 150 175

# of unique articles primarily talking about the company
Note:
Based on ~3,000 stories across 843 European news sources,
primarily UK focused, from September 2017 to September Source:
2018.
Compared to other tech-related topics that gain large amounts of coverage in European
news sources, it is notable that articles related to diversity and inclusion are more likely to
Compared to other tech-related topics that gain large amounts of coverage in European news sources, it is notable
be led by a negativethat
sentiment.
articles related to diversity and inclusion are more likely to be led by a negative sentiment.
Share of total stories per topic by sentiment Fundraising

summary
LEGEND Exits (IPOs & M&A)

Positive
Neutral
Blockchain
Negative
0 20 40 60 80 100
% of total stories
Note:
(primarily UK focused) from Septemeber 2017 to September Source:
2018.

03.1 We’ve Got a Problem Photo: Samuli Pentti / Sami Valikangas
Many stories on diversity and inclusion have a negative sentiment and they are more likely
to drive more engagement on social media. In fact, news articles related to diversity and
inclusion that are classified
Many storieswith a negative
on diversity sentiment
and inclusion havedrive 42%sentiment
a negative of all social
andengagement
they are more likely to drive more
around the topic asengagement
a whole, despite
on socialthose
media.same
In fact,stories accounting
news articles fordiversity
related to just 11% ofinclusion
and everything
that are classi ed with a
negative
written on the topic. Are wesentiment
sendingdrive 42% of
enough all socialmessages
positive engagementto around the topic as a whole, despite those same stories
underrepresented
communities to joinaccounting
the techfor just 11% of
industry, oreverything
are we inwritten
danger onof
thefurther
topic. Are we sendingthe
reinforcing enough positive messages to
deeply
underrepresented communities to join the tech industry, or are we in danger of further reinforcing the deeply
entrenched stereotypes that have made tech so unwelcoming to these groups?
entrenched stereotypes that have made tech so unwelcoming to these groups?
Share of total social engagement per topic by Fundraising

sentiment summary
LEGEND Exits (IPOs & M&A)

Positive
Neutral
Blockchain
Negative
0 20 40 60 80 100
% of total sentiment
Note:
(primarily UK focused) from Septemeber 2017 to September Source:
2018.
The entire ecosystem as a whole needs to challenge

itself to make concrete commitments and change.
“ Europe’s VC industry is missing out on returns because we are lacking

in diversity. Startups are missing out on performance because
they lack diversity. That means both diversity in our teams and the
founders that we back. This means diversity not just of gender,
but in terms of background, race, ethnicity, physical and cognitive
differences. The entire ecosystem as a whole needs to challenge
itself to make concrete commitments and change.”
Niklas Zennström
Atomico

We’re All Part of the Problem
Despite many voices in the industry taking a negative view on the level of inclusion in
Despite many voices in the industry taking a negative view on the level of inclusion in Europe's tech industry,
Europe’s tech industry, people are much more likely to believe that the culture in their own
people are much more likely to believe that the culture in their own companies is inclusive. In fact, more than three
companies is inclusive. In of
quarters fact, moreorthan
founders three-quarters
employees of founders
at Europe's private or employees
tech companies perceiveattheir company's culture to be
Europe’s private tech companies perceive their company’s culture to be inclusive.
inclusive.
The culture at my tech company is inclusive DATASET: OCCUPATION

Occupation
Founder or startup/scale-up employee

L EG E ND
Agree
Investor
Disagree Policymaker or public sector employee
Other
0 20 40 60 80 100
% of respondents
Source:
DATASET: GENDER
Gender
Female
Male
0 20 40 60 80 100
d % of respon ents
Source:

Photo: Petri Anttila
People in the European tech ecosystem are split in their views on whether it is inclusive.
While a majority of men think it is inclusive, only 38% of women agree. Female investors
People
on the other hand, whoinare thearguably
European able
tech ecosystem are split inview
to take a broader theirgiven
views on
thewhether
number it is
ofinclusive. While a majority of men
think it is inclusive, only 38% of women agree. Female investors on the other hand, who are arguably able to take a
companies they meet, are much less positive, with 45% disagreeing that the industry is
broader view given the number of companies they meet, are much less positive with 45% disgreeing that the
inclusive versusindustry
36% that agree.
is inclusive versus 36% that agree.
The European tech industry is inclusive DATASET: GENDER
LE GE ND Female
Agree
Male
Disagree
People in the European tech ecosystem are split in their views on whether it is inclusive. While a majority of men
think it is inclusive, only 38% of women agree. Female investors
0
on the 20
other hand,
40
who are60arguably80able to take
% of respondents
100
a
broader view given the number of companies they meet, are much less positive with 45% disgreeing that the
industry is inclusive versus 36% that agree.
DATASET: FOUNDER/INVESTOR
Source:
The European tech industry is inclusive Female founder or startup/scale-up

DATASET: FOUNDER S/ INVESTOR S employee
LEG END
People
Agree in the European tech ecosystem are split in their views on whether it is inclusive. While a majority of men
Female investor
think it isagree
Neither inclusive,
nor disagreeonly 38% of women agree. Female investors on the other hand, who are arguably able to take a
broader
Disagreeview given the number of companies they meet, are much less positive with 45% disgreeing that the
industry is inclusive versus 36% that agree.Male founder or startup/scale-up

employee
The European tech industry is inclusive

Male investor
DATASET : EXP ER IE NC ED D ISC R IM I NAT IO N
L EGE ND
0 20 40 60 80 100
Agree
% of respondents
Disagree
DATASET: EXPERIENCED DISCRIMINATION
Source:
Experienced discrimination
Not experienced discrimination
0 20 40 60 80 100
% of respondents
Source:
The industry’s perception of its own inclusiveness is undermined by what survey

The industry's perception of its own inclusiveness stands is undermined by what survey respondents shared about
respondents shared about their individual experiences of discrimination while working
their experiences with discrimination while working in European tech. 46% of women state that they have
in European tech. 46% of women
experienced state that they have experienced discrimination.
discrimination.
32%
Have you ever experienced discrimination Central Europe & Baltics
10%
while working in the European tech industry?
62%
DACH
22%
LEGEND
35%
Female Eastern Europe
26%
Male 49%
France & Benelux
12%
39%
Nordics
18%
42%
Southern Europe
14%
50%
UK & Ireland
15%
0 10 20 30 40 50 60 70
% of respondents
Source:

Women are experiencing an alarming level of DISCRIMINATION IN THE EUROPEAN TECH INDUSTRY
discrimination in the European tech industry
46 % of female respondents have

experienced some form of
discrimination while working in the
European tech industry
“ Diversity is a key challenge facing the tech ecosystem here in Europe,

and it is ironic that more companies are not looking to address that
Companies are not looking challenge when talent is also such a key issue for them. Companies
are not looking widely and deeply enough for diverse talent. Founders
widely and deeply enough for need to take ownership of this as they scale.”
diverse talent. Founders need
to take ownership of this as Baroness Martha Lane Fox
they scale. Doteveryone
Discrimination based on gender might be the most visible and quantifiable, but it is not the
only form of discrimination that exists at worrying levels in the European tech ecosystem.
A meaningful number Discrimination based on
of respondents gender
have might be thediscrimination
experienced most visible andbased
quanti on
able,
agebutand
it is from the only form of
discrimination that exists at worrying levels in the European tech ecosystem. Meaningful numbers of respondents
ethnicity too. The survey can’t accurately quantify the level of discrimination based on
have experienced discrimination based on age and ethnicity too. The survey can't accurately quantify the level of
disability or sexualdiscrimination
orientation, based
but theon data points
disability to these
of sexual being very
orientation, prevalent
but the here
data points too. being very prevalent here too.
to these
40%
Types of discrimination experienced by Age
39%
people who have experienced any form of it
when working in European tech 90%
Gender
32%
LEGE ND
6%
Sexual orientation
Female 12%
Male
11%
Ethnicity
32%
1%
Disability
5%
3%
Religion
11%
0 20 40 60 80 100
Source:
% of respondents that have experienced each form of discrimination
Note:
The respondents' mix in self-identi ed ethnicity: 84% White,
5% Asian, 1% Black/African/Caribbean, 3% Mixed/Multiple, 2%
Other, 4% Prefer not to say.
The underrepresentation of people from less privileged

socio-economic backgrounds or persons with disabilities
seems to be missing from the conversation entirely.
“ In Europe we have blindly imported Silicon Valley’s conversation

on diversity and inclusion, which is often too narrow in scope, and
further marginalises other underrepresented groups or leaves
itself vulnerable to accusations of identity politics. For example, the
underrepresentation of people from less privileged socio-economic
backgrounds or persons with disabilities seems to be missing from
the conversation entirely.”
Steve O’Hear
TechCrunch

This is exemplified by the fact that people of Black, African or Caribbean

ethnicity that are working in the European tech ecosystem are more
This is exempli ed by the fact that people of Black, African or Caribbean ethnicity that are working in the European
likely to have experienced discrimination
tech ecosystem thantonot.
are more likely have experienced discrimination than not.
Share of respondents who have experienced Asian 35%

discrimination by self-de ned ethnicity
LEGEND Black/African/Caribbean 55%

% of respondents who have experienced
discrimination
Mixed/Multiple 33%
Other 39%
White 22%
0 10 20 30 40 50 60
% of respondents who have experienced discrimination
Note:
The sample size for all ethnicities is not large, but this fact Source:
itself tells a story of its own.

Photo: Kai Kuusisto / Petri Anttila
Accelerating Change
In the wake of high profile stories of discrimination in the tech industry, the issue of
diversity and inclusion has seen an increased focus. According to many respondents,
In the wake of high pro le stories of discrimination in the tech industry, the issue of diversity and inclusion has
this changed how many now behave. 45% of women and 36% of men agree that
seen an increased focus. This has, according to respondents, changed how many now behave. 45% of women and
they’ve made changes to their
36% of men behaviour
agree in the
that they've last
made 12 months.
changes to their behaviour in the last 12 months.
I have changed my behaviour as a result of

increased focus on diversity and inclusion
LEGEND Female
Agree
Disagree
Male
0 10 20 30 40 50 60 70 80 90 100
% of respondents
Source:
“ At Klarna, we now have over 80 nationalities, with over 55 in our

Stockholm HQ alone. I am amazed that we have somehow managed
to attract such talented people from across the globe to this small
Diversity of thinking and city in the north with dark winters. Most of our employees have
experience fuels innovation moved for their job and if the culture is not open or enabling people
and drives market growth. to speak their voice and feel like they can make an impact, diversity
does not matter alone, if it’s simply not inclusive and people will not
To put it simply, diverse stay or thrive. To scale and stay competitive in the tech industry, we
teams create better benefit massively from experiences of people from many different
products and solutions types of backgrounds in building solutions. Diversity of thinking
and experience fuels innovation and drives market growth. To put it
simply, diverse teams create better products and solutions.”
Sebastian Siemiatkowski
Klarna
“ By investing outside of the homogeneous networks of traditional

venture capital we believe we can make great return and also drive
change in society. The key to diversity is giving more entrepreneurs
The key to diversity is giving the right keys to grow their companies because it will create new
employers, role models and owners.”
more entrepreneurs the
right keys to grow their Sara Wimmercranz / Susanne Najafi
companies because it will Backingminds
create new employers, role
models and owners.

03.3 Accelerating Change Photo: Anrietta Kuosku
One way to explore the extent to which the European tech industry is tackling diversity and
inclusion is by examining
One waythe level of
to explore theadoption of different
extent to which policies
the European techthat can ishelp
industry to enable
tackling a and inclusion is by
diversity
One way to the
examining explore
levelthe extent toof
ofculture.
adoption which the European
different techcan
policies that industry
help toishas
tackling
enable diversity
a more and and
diverse inclusion is bycompany
inclusive
more diverse and inclusive company Flexible working, for example, a high level
examining
culture. the level
Flexible of adoption
working, for of different
example, has apolicies
high that
level of can help to
adoption enableEuropean
among a more diverse
tech and inclusive company
companies.
of adoption amongculture.
European tech
Flexible companies.
working, for example, has a high level of adoption among European tech companies.
My company has a exible working policy

My company has a exible working policy DATASET: ALL RESPONDENTS
DATASET: ALL RESP OND ENTS
DATASET: ALL RESP OND ENTS
LEG END All respondents 91% 9%
LEGYes
END All respondents 91% 9%
Yes
No 0 10 20 30 40 50 60 70 80 90 100
OneNoway to explore the extent to which the European 0 tech10 industry
20 is30 tackling
40 % ofdiversity 60 and70
respondents
50 inclusion
80 is90by 100
examining the level of adoption of different policies that can help to enable a% ofmore diverse and inclusive company
respondents
culture. Flexible working, for example, has a high level of adoption among European tech companies.
Source:
Note:
DATASET: INDUSTRY
Source:
Company size only includes founder and startup/scale-up
Note:
My company
size onlyhas
employees.
Company a exible
includes working
founder and policy
startup/scale-up
employees. Tech
DATASET: INDUSTRY 92% 8%
LEGEND
Yes
Non-tech 90%
No 10%
One way to explore the extent to which the European tech industry is tackling diversity and inclusion is by
examining the level of adoption of different policies0that can
10
help
20
to enable
30 40
a more 50
diverse
60
and
70
inclusive
80
company
90 100
culture. Flexible working, for example, has a high level of adoption among European
% of respondentstech companies.
My company has a exible working policy DATASET: COMPANY SIZE BY # OF EMPLOYEES

Source:
DATASE T: C OMPANY SI ZE BY # OF EMPLOYEE S
L E GE ND
<=10 94% 6%
Yes
No
Note:
Company size only includes founder and startup/scale-up 11-100 92% 8%
employees.
100+ 88% 12%
0 10 20 30 40 50 60 70 80 90 100
% of respondents
Note:
Note:
Company size only includes founder and startup/scale-up Source:
employees.
employees.

Similarly, founders and employees of Europe’s private tech startups and scale-ups report
high levels of adoption of dedicated
Similarly, parental
founders and employees leave policies,
of Europe's though
private techthere is a
startups marked
and scaleups report high levels of adoption of
difference based on company size. In fact, nearly 40% of companies that are still
dedicated parental leave policies, though there is a marked difference based fewer
on company size. In fact, nearly 40%
than 10 employeesofhave yet to that
companies put in
areplace a parental
still fewer leave policy
than 10 employees have yet to put in place a parental leave policy
My company has a parental leave policy DATASET: ALL RESPONDENTS
L EG E ND All respondents 78% 22%

Yes
Similarly,
No
founders and employees of Europe's private tech startups and scaleups report high levels of adoption of
dedicated parental leave policies, though there is a0marked
10 difference
20 30 based
40 on 50company 60 size.
70 In fact,
80 nearly
90 40%
100
of companies that are still fewer than 10 employees have yet to put in place a%parental
of respondentsleave policy
DATASET: INDUSTRY
My company has a parental leave policy
DATAS E T : I ND U ST RY
Tech 74% 26%
L E GE ND
Yes
Non-tech 87% 13%
Similarly,
No
Note: founders and employees of Europe's private tech startups and scaleups report high levels of adoption of
dedicated
employees. parental leave policies, though there is a marked difference based on company size. In fact, nearly 40%
of companies that are still fewer than 10 employees 0have yet 10 to20put in30place40a parental
50 leave70policy80
60 90 100
% of respondents
My company has a parental leave policy DATASET: COMPANY SIZE BY # OF EMPLOYEES

DATASET: COMPANY SIZE BY # O F EMPLOYE E S
LEGEND <=10 62% 38%
Yes
No 11-100 75% 25%
Note:
Company size only includes founder and startup/scale-up 100+ 88% 12%
employees.
Note: 0 10 20 30 40 50 60 70 80 90 100
employees. % of respondents
Flexible working and parental leave policies are important steps towards enabling a
more diverse workforce,
Similarly,but may not
founders and be sufficient
employees on their
of Europe's own.tech
private Interestingly,
startups andascaleups
large report high levels of adoption of
percentage of companies,
dedicated especially smaller
parental leave policies,ones,
thoughhave
therenot
is ayet implemented
marked an overall
difference based on company size. In fact, nearly 40%
diversity and inclusion policy. that are still fewer than 10 employees have yet to put in place a parental leave policy
of companies
My company has a diversity & inclusion policy DATASET: ALL RESPONDENTS
L E GE ND All respondents 53% 47%

Yes
Similarly,
No founders and employees of Europe's private tech startups and scaleups report high levels of adoption of
dedicated parental leave policies, though there is a0 marked
10 difference
20 30 based
40 on50 company 60 size.
70 In 80
fact, nearly
90 10040%
of respondents leave policy
DATASET: INDUSTRY
DATASE T : I ND U ST RY
Tech 48% 52%
L EG END
Yes
Non-tech 62% 38%
Similarly,
No
dedicated
employees. parental leave policies, though there is a marked difference based on company size. In fact, nearly 40%
50 leave
60 policy80
70 90 100
% of respondents

DATAS E T: CO MPA NY S I Z E BY # OF E MP LOYEE S
LE G END <=10 41% 59%
Yes
No 11-100 42% 58%
Note:
employees.
Note:
Company size only includes founder and startup/scale-up 0 10 20 30 40 50 60 70 80 90 100
employees.
% of respondents

Even more targeted initiatives,

Similarly, such
founders andas specificofdiversity
employees & inclusion
Europe's private hiring policies,
tech startups arereport
and scaleups still high levels of adoption of
uncommon amongdedicated
European tech companies. It is clear here too that many companies appear
parental leave policies, though there is a marked difference based on company size. In fact, nearly 40%
to delay putting in place specific
of companies thatD&I
are policies
still feweruntil they
than 10 scale to
employees a large
have yet tonumber of aemployees.
put in place parental leave policy
My company has specific diversity DATASET: ALL RESPONDENTS

& inclusion hiring policies
L EG E ND All respondents 45% 55%

Yes
Similarly, founders and employees of Europe's private tech startups and scaleups report high levels of adoption of
No
dedicated parental leave policies, though there is a0marked
10 difference
20 30 based
40 on50 company 60 size.
70 In 80
fact, nearly
90 10040%
of respondents
leave policy
DATASET: INDUSTRY
DATAS E T : I ND UST RY
Tech 43% 57%
L E GE ND
Yes
Non-tech 51% 49%
No
Similarly,
dedicated parental leave policies, though there is a marked difference based on company size. In fact, nearly 40%
employees.
of companies that are still fewer than 10 employees0have yet 10 to20put in30place40 a parental
50 leave70policy80
60 90 100
% of respondents

DATASET : C O MPANY SI ZE BY # OF EMP LOYE ES
LEG END <=10 36% 64%
Yes
No 11-100 38% 62%
Note:
employees.
Note:
0 10 20 30 40 50 60 70 80 90 100
employees. % of respondents
The fact that suchdedicated
policies parental
remain leave
far from widespread
policies, in the
though there European
is a marked tech industries
difference may besize. In fact, nearly 40%
based on company
compounded by the of fact that few
companies that companies
are still fewerhave appointed
than 10 employeesdedicated D&Iinrepresentatives.
have yet to put place a parental leave policy
My company has a diversity & DATASET: ALL RESPONDENTS

inclusion representative
LE G E ND All respondents 35% 65%

Yes
No
dedicated parental leave policies, though there is a0 marked
10
difference
20 30
based
40
on50company 60
size.
70
In 80
fact, nearly
90
40%
100
of respondents
leave policy
DATASET: INDUSTRY
DATAS E T: INDU STRY
Tech 32% 68%
L EG E ND
Yes
Non-tech 44% 56%
No
Similarly,
dedicated parental
Company size only
employees.
leave
includes founder policies, though there is a marked difference based on company size. In fact, nearly 40%
and startup/scale-up
50 leave
60 policy80
70 90 100
% of respondents

DATAS ET : C OMPA NY SIZE BY # OF EMPLOYEE S
LEGEND <=10 26% 74%
Yes
No 11-100 24% 76%
Note:
employees.
Note:
Company size only includes founder and startup/scale-up 0 10 20 30 40 50 60 70 80 90 100
employees.
% of respondents

There are, of course, reasons to be optimistic about the possibility of

achieving positive change in the European tech ecosystem. In the last 12
months, for example, there has been strong momentum around initiatives
There are, of
focused oncourse, reasons
improving to be optimistic
Diversity about the
& Inclusion in possibility
the Europeanof achieving
tech positive change in the European
ecosystem.
tech ecosystem. In the last 12 months, for example, there has been strong momentum around initiatives focused
In the UK alone, Diversity VC has identified 28 separate initiatives that are all
on improving Diversity & Inclusion in the European tech ecosystem. In the UK alone, Diversity VC has identi ed 28
tacklinginitiatives
separate diversity and
that are inclusion in various
all tackling diversity anddifferent
inclusion inways.
various different ways.
Type of
Short description URL
Initiative
Selected Diversity & Inclusion Initiatives in
the UK AllBright Angel group Angel group and co-working club focussed on female founders https://www.allbrightcollective.com/
Angel Academe Angel group Angel group focused on female founders & angels http://www.angelacademe.com/
Astia Angels Angel group Angel group focused on female founders & angels http://astia.org/astia-angels/
Rare Seed Capital Angel group Angel group focused o n BAME invetsors https://www.rareseedcapital.com/
23 Code Street Coding school Teaching women in the UK and India http://www.23codestreet.com/
Collective / Focussing on promoting entreprenrship to BAME / female http://capitalenterprise.org/one-

One Tech
network entrepreneurs tech/
Hustle Crew Community Community for entrepreneurial women of colour http://www.hustlecrew.co/
People of Color in Tech Community Community for entrepreneurial people of colour https://peopleofcolorintech.com/
Techish Community Podcast / community showcasing diverse tech rolemodels http://www.techishpod.com/
YSYS Community Community group of diverse entrepreneurs https://www.thisisysys.com/
Born out of Founders Forum, consulting fast growth tech

Accelerate Her Company https://accelerateher.co/#/
companies
Inclusive Boards Company Helping recruit more ethnically diverse boards http://www.inclusiveboards.co.uk/
Success Talks Event series Platform and event series showcasing diverse speakers http://www.success-talks.co.uk/
Jane VC Fund Fund focused on female founders https://www.janevc.com/
Merian Ventures Fund Fund focused on female founders https://www.merianventures.com/
Voulez Capital Fund Fund focused on female founders https://www.voulez-capital.com/
Fund / Accelerator in the UK focussed on LGBT, people of colour and

Backst age Capital https://backstagecapital.com/
Accelerator female founders
Divinc Incubator Young Enterprise focused on inner city schools http://wearedivinc.com/
Muslamic Makers Meet-up group Meet-up group for Muslims in Tech https://muslamicmakers.com/
50/50 Pledge Network A pledge for events and conferences to be 50:50 represented http://www.5050ple dge.com/
FemStreet Newsletter Start-ups / VC https://www.femstreet.com/
30% Club Non-pro t Dedicated to increasing women on boards https://30percentclub.org/
Non-pro t teaching women how to code and helping them get work
Code First: Girls Non-pro t https://www.code rstgirls.org.uk/
in tech companies
Color in Tech Non-pro t Non-pro t promoting a fairer tech industry https://www.colorintech.org/
DevelopHer Non-pro t No n-pro t social enterprise promoting women in technology https://developher.org/
Dot Everyone Non-pro t Focused on tech companies https://doteveryone.org.uk/
Level 20 Non-pro t Focused mainly on women in the Private Equity and LP community https://www.level20.org/
Fearless Futures Training group Training focussed on Social Justice http://www.fearlessfutures.org/
Note:
This list is illustrative and not exhaustive. If you would like to
Source:
add your initiatives to this list, please contact us at
research@atomico.com and we will update the list.
Our users are at the core of

everything we do, and we’ve
hired a diverse team to reflect
our growing customer base. Sharmadean Reid
Beautystack

Europe’s
Got Talent
People, Competition One of European tech’s greatest strengths is its deep talent
pool. A growing number of tech hubs are distributed across
all corners of the region. They are connected by flows of
and Movement Europeans and non-Europeans alike. Finally, a bright, new
generation is emerging; European founders are returning
from the Valley, and students are seizing the opportunity to
found their own startups.
ARTICLES
04.1 People Power
04.2 People Flows
04.3 An Ecosystem Powered by Migratory Talent
04.4 Competing for & Compensating Talent
04.5 The Next Generation

People Power
TheThe
next generation
next of European
generation of Europeantech companies
tech from
companies hubs
from across
hubs the the
across region are being
built by experienced
region techby
are being built talent from previous
experienced generations
tech talent from previous generations
AMSTERDAM BARCELONA COPENHAGEN HELSINKI
Adeline Lee C. Bartek Kunowski Christian Holm Jussi Mäkinen

Director of Growth VP Product & Technology CTO CMO
Clue Tuenti, Amazon Citrix Rovio
Koen Bok Kritarth Chhabra Patrick Cournoyer Klaus Melakari

CEO Global Head of Business Dev. COO CTO
Facebook OnePlus, Uber FlightCar Microsoft, Nokia
Tom Watson Peter Van Kersen Phillip Chambers Tiina Nieminen

Director of Product VP People CEO Program Director
Pinterest, Facebook Foodora, Catawiki Citrix, Qype Microsoft, Nokia
LONDON MUNICH PARIS STOCKHOLM
Marina Theodosiou Frank Stephenson Odile Szabo Anna Fredrixon

Head of Credit Decision Science Head of Product Design VP Ecommerce & Marketing VP People
Aire, Funding Circle McLaren, Ferrari Vestiaire Collective, PriceMinister Truecaller, Capgemini
Meri Williams Remo Gerber Marty Ostermiller Peder Stahle

CTO CCO CFO Chief Product Officer
Moo, Marks & Spencer Gett, Groupon HireVue, Oracle (RightNow) iZettle, Vodafone
Tom Foster-Carter Meggy Sailer Pascal Gauthier Victoria Kopylov

Chief Operating Officer Global Head of Recruitment President General Counsel
Curve, Oscar Tesla Criteo Spotify, Mannheimer Swartling
Note: Note: This is intended as a representative selection of experienced talent that is

This is intended as a representative selection of experienced talent that is gained experience in
gained experience in previous European tech companies and is now helping to
Europe's professional developer talent pool is
The State of European Tech 2018 distributed
previous European techgeneration
build a new companiesof
should not be considered complete.
and is now helping
companies. to build not
It should a new
begeneration
consideredof companies.
complete. It
across all corners of the region
Europe’s professional developer

Europe's
Map of professional talent
professional
developer pool istalent pool is distributed
developer
distribution
distributedacross
across all corners
across
Europe of the
byallcountry
corners region
of the region
Map of professional developer distribution

across Europe by country
LEGEND
upto 1,000,000
LEGEND
800,000 to 900,000
upto 850,400
700,000 to 800,000
680,320 to 765,360
595,280 to 680,320
600,000 to 700,000
510,240 to 595,280
500,000 to 600,000
425,200 to 510,240
400,000 to 500,000
340,160 to 425,200
255,120 to 340,160
300,000 to 400,000
170,080 to 255,120
200,000 to 300,000
85,040 to 170,080
100,000 to 200,000
upto 85,040
upto 100,000
Source:

Source:
04.1 People Power
Europe’s professional developer workforce PROFESSIONAL DEVELOPER TALENT POOL

continues to grow strongly
5.7m
professional developers in Europe, which
represents growth of 200,000 compared
to 5.5 million in 2017. This also compares to
4.4 million in the US, a number that stayed
flat year on year.
Germany, Europe’s largest country by population, is also home to the region’s largest
Germany, Europe's
single market for professional largest
developer country
talent, by population,
followed is alsobyhome
very closely to the
the UK andregion's largest single market for profession
Germany, Europe's largest country by population, is also home to the region's largest single market for professional
developer
then France in a more distanttalent, followed very closely by the UK and then France in a more distant third place
third place
developer talent, followed very closely by the UK and then France in a more distant third place
851,000
Germany
# of professional developers 851,000
Germany
# of professionalby
developers
country (2018 and 2017) United Kingdom 830,500
by country (2018 and 2017) United Kingdom 830,500
TO P 10 491,800
France
TOP 10 491,800
France 407,100
LE GE ND Russia
LE GEND 407,100
2018 Russia 308,900
Italy
2018 2017 308,900
Italy 308,500
Spain
2017
308,500
Spain
Netherlands
310,000
Netherlands
Note: Poland 310,000
254,500
Where data for 2017 was not available,
Note: this is shown as blank Poland Ukraine 254,500 172,000
Where data for 2017 was not available,
this is shown as blank Ukraine Sweden 172,000
176,000
Sweden 0176,000
100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000
Note: # of professional developers
Where data for 2017 was not available, this is 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000
shown as blank # of professional developers
Source:
Source:
Europe is home to at least 30 different hubs with 50,000 or more professional

Europe is home to at least 30 different hubs with 50,000 or more professional developers. It's three largest hubs
developers. Its three
Europe forlargest
is home hubs
to at least
developers arefor
30 developers
different
London, Paris areAmsterdam,
hubsand
withLondon,
50,000 orParis
more
whichand Amsterdam,
professional
together developers.
are It's three
home to about largest
15% of hubs total
the region's
which together aredevelopers
home
for developers areto about Paris
London, 15% of the
and region’s total
Amsterdam, whichdevelopers.
together are home to about 15% of the region's total
developers
London 357,900
Top 30 European cities by # of
London 357,900
Top 30 European cities by developers
professional # of in 2018 Paris 268,600
professional developers in 2018 Paris 268,600
TO P 10 Amsterdam 216,800
TO P 1 0 Amsterdam 216,800
L E GE ND Cologne 165,900
L E G E ND Professional developers Cologne 165,900
Moscow 160,900
Professional developers
Moscow 160,900
Frankfurt am Main 120,700
Frankfurt am Main 120,700
Madrid 111,800
Madrid 111,800
Manchester 110,600
Manchester 110,600
Berlin 99,400
Berlin 99,400
Zurich 99,100
Zurich 99,100
0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000
0 50,000 100,000 150,000 200,000 # 250,000 300,000
of professional 350,000
developers 400,000
# of professional developers
Source:
Source:
Germany’s largest hubs for professional developers PROFESSIONAL DEVELOPER TALENT POOL
might surprise you
165,900
professional developers in Cologne, Germany’s largest
hub for engineering talent

People Flows
The UK is the number one destination for all international movers into the European
The UK is the number one destination for all international movers into the European tech ecosystem, but it is
tech ecosystem, but it is closely
closely followedfollowed now by
now by Germany Germany
and then France and then France.
United Kingdom 20.9%

Top 10 European destinations for all
international movers into European tech in Germany 15.2%
2018
France 11.1%
LE GE ND Netherlands 7.8%
Top 10 Destinations - 2018 Spain 6.7%
Ireland 4.4%
Switzerland 4.0%
Sweden 3.9%
Poland 3.0%
Belgium 2.6%
0.0 2.5 5.0 7.5 10.0 12.5 15.0 17.5 20.0 22.5
% of all international movers
Note:
All interpretations of the LinkedIn data are made by Atomico,
not LinkedIn. A 'mover' is de ned by LinkedIn as somebody now Source:
working in the tech industry that has moved country or
industry sector for their primary employment between 2018
and 2017.
For additional context, it is worth analysing a similar dataset covering tech talent
For additional context, it is worth analysing a similar dataset covering tech talent movement in 2017 provided by
movement in 2017 provided bylast
LinkedIn for LinkedIn for last
year’s State year’s State
of European Tech of European Tech.

Top 10 European destinations for all
international movers into European tech in Germany 13.8%
2017
France 9.1%
LE GE ND
Netherlands 7.4%
Comparison to Similar Data from SOET 2017
Spain 7.3%
Ireland 6.1%
Switzerland 4.1%
Sweden 3.3%
Poland 3.9%
0.0 2.5 5.0 7.5 10.0 12.5 15.0 17.5 20.0 22.5
% of all international movers
Note:
not LinkedIn. A ‘mover’ is de ned by LinkedIn as someone now Source:
working in the tech industry that has moved country for their
primary employment between 2017 & 2016. Belgium not
provided in 2017.
Germany and UK are now the joint top destinations MIGRANT TALENT IN EUROPEAN TECH
for migratory tech talent moving within the
14.6 %
European tech industry The same % of all-intra European
movers within the European tech
industry end in either Germany or the
UK as their destination country.

04.2 People Flows
Looking
Looking more closely more
at just closely at just migratory
intra-European tech tech
migratory talenttalent
movingmoving within
within Europe, Germany is now the joint #1 destination
the region, Germany is now the joint #1 destination together with the UK
together with the UK

Top 10 European destinations for intra-
European movers within European tech Germany 14.6%
industry in 2018
Spain 8.5%
LEG END France 8.1%
Top 10 destinations in 2018 Netherlands 7.7%
Switzerland 5.9%
Poland 4.2%
Ireland 4.0%
Sweden 3.4%
Italy 3.2%
0.0 2.5 5.0 7.5 10.0 12.5 15.0

% of intra-European movers
Note:
and 2017.
movement in 2017 provided by LinkedIn for last year’s State of European Tech.
LinkedIn for last year’s State of European Tech

Top 10 European destinations for intra-
European movers within European tech Germany 13.8%
industry in 2017
Spain 8.9%
LEG END
France 7.0%
Comparison to Similar Data from SOET 2017
Netherlands 7.0%
Switzerland 5.7%
Poland 5.3%
Ireland 6.9%
Sweden 2.9%
0.0 2.5 5.0 7.5 10.0 12.5 15.0

% of all intra-European movers
Note:
primary employment between 2017 & 2016. Italy not provided in
2017.
The US is the largest destination of European tech talent moving outside of the
The US is the largest destination of European tech talent moving outside of the region, but other destinations are
region, but other destinations are now important too, such as Canada and Australia.
now important too, such as Canada and Australia.
United States 31.9%

Top 10 non-European destinations for
European movers out of European tech in India 20.3%
2018
Canada 9.5%
LEG END Australia 8.6%
Top 10 Destinations - 2018 China 3.5%
United Arab Emirates 2.5%
Brazil 2.2%
Singapore 2.0%
New Zealand 1.8%
Japan 1.5%
0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0

% of tech movers
Note:
and 2017.

04.2 People Flows
movement in 2017 provided by LinkedIn for last year’s State of European Tech.
LinkedIn for last year’s State of European Tech
United States 36.4%

Top 10 non-European destinations for
European movers out of European tech in India 19.7%
2017
Canada 8.2%
LEGEND Australia 7.1%
Comparison to Similar Data from SOET 2017 China 3.1%
United Arab Emirates 3.1%
Brazil 1.8%
Singapore 3.1%
New Zealand 1.7%
Japan 1.4%
0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0

% of tech movers
Note:
not LinkedIn. A ‘mover’ is de ned by LinkedIn as somebody now Source:
primary employment between 2017 and 2016.
India and the US account for

India and themore than 50%
US account of the
for more thannon-European
50% of the non-
talent moving into the European
European talent tech industry.
moving into the European tech industry
India 39.4%
Top 10 non-European source countries for
movers into the European tech industry United States 16.9%
Brazil 7.5%
Tunisia 3.7%
Australia 3.3%
Morocco 3.2%
Canada 2.6%
China 2.0%
South Africa 1.5%
Other 1.5%
0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0
% of non-European tech movers
Note:
and 2017.
India and the US are more important sources of migratory talent moving into and
India and the US are more important sources of migratory talent moving into and within the European tech
within the European tech industry than any single European source country.
industry than any single European source country
India 21%
Top 10 source countries for all movers into
and within the European tech industry United States 9%
United Kingdom 7%
Germany 5%
France 4%
Brazil 4%
Spain 3%
Italy 3%
Netherlands 2%
Russia 2%
0 3 5 8 10 13 15 18 20 23
% of tech movers
Note:
and 2017.

04.2 People Flows
The UK has seen a huge increase in the % of COMPETITION FOR TALENT

software engineer job postings that are defined
42 %
as ‘hard to fill’ increase year-on-year in the % of software
engineer job postings in the UK that are
hard to fill, i.e. are posted for longer than
60 days in Indeed’s UK job site
As every company becomes a software company and

the need for software engineers and other tech roles
continues to grow, it will be even more crucial for
companies of all sizes look to solutions that will help them
hire quality candidates and to close the talent gap in tech.
“ People want to work at a company that has a mission they believe in.
No longer is talent just driven by compensation. Though we still see
that salary is a key factor candidates consider when evaluating an
offer, we also see candidates caring more about job location, work
flexibility, a good work environment, and meaningful work. As every
company becomes a software company and the need for software
engineers and other tech roles continues to grow, it will be even more
crucial for companies of all sizes look to solutions that will help them
Raj Mukherjee
hire quality candidates and to close the talent gap in tech.”
Indeed
World-class talent is moving to and returning to Europe from the

US to help build a new generation of European tech companies
Note:
This is intended as a representative selection of talent
that has moved to Europe from the US and should not be
considered complete.

04.2 People Flows
Europe is growing as a destination of choice for US software engineers searching for

software engineer roles overseas, and now accounts for more than 20% of all cross-border
Europe is growing as a destination of choice for US software engineers searching for software engineer roles
searches, up 20% compared with 2017.
overseas, and now accounts for more than 20% of all cross-border searches, up 20% compared with 2017.
European share (%) of US-originated cross-

20.8%
border searches containing 'software' and
European share (%) of US-originated searches

20.0
'engineer'
16.2%
LEGEND
15.0
Share of US-originated cross-border searches (%)
10.0
5.0
0.0
2018 2017
Source:
The UK is the clearThe

destination country of choice for USchoice
software USengineers searching for
TheUKUKisisthe
theclear
cleardestination
destination country of choice forUS
for softwareengineers
software engineers searching
searching forpotential
for potential job
job postings
postings in in
potential job postings
the in the European
theEuropean
European tech tech ecosystem.
techecosystem.
ecosystem.
13.96%
13.96%
%%share
shareby
bydestination
destinationcountry
country of
of US.-
US.- UK
UK
10.56%
10.56%
originated
originatedcross-border
cross-bordersearches
searches containing
containing
'software'and
'software' and'engineer'
'engineer' 2.74%
2.74%
Ireland
Ireland
1.73%
1.73%
L LE
EGGEND
E ND 1.46%
1.46%
Germany
Germany
2018 1.60%
1.60%
2018
2017
2017 0.84%
0.84%
Netherlands
Netherlands
0.88%
0.88%
0.42%
0.42%
France
France
0.36%
0.36%
0.35%
Spain 0.35%
Spain 0.24%
0.24%
0.30%
Italy 0.30%
Italy 0.41%
0.41%
0.29%
Sweden 0.29%
Sweden 0.18%
0.18%
0.15%
Belgium 0.15%
Belgium 0.06%
0.06%
0.10%
Denmark 0.10%
Denmark 0.09%
0.09%
0.10%
Portugal 0.10%
Portugal 0.03%
0.03%
0.08%
Austria 0.08%
Austria 0.07%
0.07%
0.00 2.50 5.00 7.50 10.00 12.50 15.00
0.00 2.50 5.00
Share (%) 7.50
by destination country 10.00 searches12.50
of US-originated 15.00
Share (%) by destination country of US-originated searches
Source:
Source:

An Ecosystem Powered by
Migratory Talent
By comparing the nationality of survey respondents with their country of residence, it’s
By comparing
possible to get a proxy the nationality
for the relative shareofofsurvey respondents
migrant with
talent in their country
different of residence,
regions it's possible to get a proxy for
in Europe.
the relative share of migrant talent in different regions in Europe. The UK and Germany, led by London and Berlin,
The UK and Germany, led by London and Berlin, are the two most dependent on migrant talent.
are the two most dependent on migrant talent.
Founders' and startup/scale-up employees' UK & Ireland 44% 56%

backgrounds by subregion of residence
DACH 44% 56%
LEGEND
Immigrant France & Benelux 25% 75%
National
Southern Europe 22% 78%
Nordics 19% 81%
Central Europe & Baltics 16% 84%
Eastern Europe 6% 94%
0 20 40 60 80 100
% of respondents
Note:
Founder and private tech startup and scaleup employee Source:
respondents only.
The UK tech ecosystem is the most heavily MIGRANT TALENT IN EUROPEAN TECH
dependent on migrant talent of any in Europe
44 % of founders and employees of private tech

start-ups in the UK are migrants, more than
any other region
European tech startups are highly dependent on MIGRANT TALENT IN EUROPEAN TECH
talent that has migrated to work for companies
28 %
outside their home countries of founders and employees of private
European tech startups who are working
outside of their home countries
Roughly half of the tech workforce has come

Roughly half of the tech workforce has come from abroad in
from abroad in fourfour
European
Europeanhubs.
hubs
Selected European hubs by share of Berlin 46%

immigrants in tech workforce
LEG END London 45%

Share of immigrants in the tech workforce (%)
Stockholm 24%
Paris 23%
Helsinki 14%
0 5 10 15 20 25 30 35 40 45 50
% of immigrants in tech workforce
Note:
Only respondents working in the tech industry. Cities with less Source:
than 100 respondents ltered out.

The UK is the #1 source of outbound talent leaving to move to

out of Europe, accounting for nearly 2.8x as much outbound
The UK issource
talent as the next largest the #1 source of outbound
country talent leaving to move to another country within Europe, accounting for nearly
in Europe.
2.8x as much outbound talent as the next largest source country in Europe

Top 10 European source countries for non-
European destinations in 2018 France 12.3%
Germany 8.8%
LEG END
Top 10 Sources - 2018 Netherlands 4.6%
Spain 4.3%
Russia 3.8%
Ireland 3.7%
Sweden 2.6%
Switzerland 2.6%
Ukraine 2.5%
0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0

% of tech movers
Note:
and 2017.
For additional context, it is worth analysing a similar dataset

covering tech talent movement in 2017 provided by LinkedIn
for last year’s State of European
LinkedIn Tech.
for last year’s State of European Tech

Top 10 European source countries for non-
European destinations in 2017 France 12.4%
LEG END Germany 7.5%
Comparison to Similar Data from SOET 2017 Netherlands 4.2%
Spain 3.7%
Ireland 5.1%
Sweden 2.7%
Switzerland 2.4%
Ukraine 3.2%
0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0

% of tech movers
Note:
primary employment between 2017 % 2016. Russia not
provided in 2017.
Skilled immigration difficulties are taking a toll on

Europe’s scaleups, and we are in bad need of more
openness in terms of talent acquisition.
“ I see two major threats, the first one being education and talent.
Europe is among the top in terms of talent & research, but it shouldn’t
be taken for granted. The challenge is that if we don’t see forward-
thinking, long-term and brave investments in the field of education,
we might lose this edge that’s keeping Europe on the surface. Skilled
immigration difficulties are taking a toll on Europe’s scaleups, and
we are in bad need of more openness in terms of talent acquisition –
Rasmus Ekholm startup visas being great initiatives towards solving this problem.”
Slush

The UK is the #1 source country for tech talent that is moving within and out of Europe, but it has
The UK is the #1 source country for tech talent that is moving within and out of Europe, but it has a much larger
a much larger share of those moving
share of those movingoutside ofthe
outside of the European
European techtech ecosystem
ecosystem thanit within it.
than within
15.1%
United Kingdom
Top 10 European source countries of 34.9%
European movers in 2018 Germany 9.6%
8.9%
France
LEGEND 12.3%
7.0%
Moving Inside Europe Spain
Moving Outside Europe Italy 5.8%

n/a%
4.8%
Netherlands
Russia 4.4%
4.3%
Poland
n/a%
3.9%
Ireland
Turkey 3.1%
n/a%
0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0

% of tech movers
Note:
All interpretations of LinkedIn data made by Atomico, not
LinkedIn. A 'mover' is de ned by LinkedIn as someone now Source:
working in tech industry who has moved country or industry
sector for primary employment between 2018 & 2017. PL & TR
outside not provided.
The UK is today the #1 destination for non-European talent, but faces strong challenges as
The UK is today the #1 destination for non-European talent, but faces strong challenges as the destination of
the destination of choice as the range of viable alternative hubs across Europe expands,
choice as the range of viable alternative hubs across Europe expands, especially in Germany, France and the
especially in Germany,
Netherlands and the Netherlands.
France

Top 10 European destinations for non-
European movers into European tech Germany 15.7%
industry in 2018
France 13.9%
LEGEND Netherlands 7.9%
Top 10 destinations in 2018 Spain 5.1%
Ireland 4.7%
Sweden 4.3%
Portugal 2.9%
Belgium 2.5%
Switzerland 2.1%
0.0 5.0 10.0 15.0 20.0 25.0 30.0

% of non-European movers
Note:
and 2017.
“ I remain optimistic about the future of European tech - never before

For London to retain its have we come as close to creating the next global tech giant. Of
title as Europe’s fintech course the uncertainty surrounding Brexit is a challenge. Lots of
fintechs like TransferWise will be opening additional offices across
capital we must continue the continent to mitigate Brexit risk, and there will certainly be
hubs like Berlin, Paris and Amsterdam that benefit from start-up
to attract talent, and jobs coming to their cities. For London to retain its title as Europe’s
make it easy for that fintech capital we must continue to attract talent, and make it easy
for that talent to come here. We hire to our headquarters from all
talent to come here. over the world, roughly 50% of our London office were not born in the
UK. Engineers and product managers are vital, but we recruit from
overseas across all our teams. Regulation must be flexible enough to
encompass rapidly evolving technical and marketing specialist roles.“
Taavet Hinrikus
TransferWise

LinkedIn
For additional context, it isfor
For additional last
worth year’
context,s State
analysing ofaEuropean
similar
it is worth Tech
dataset
analysing covering
a similar tech talent
dataset covering tech talent movement in 2017 provided by
movement in 2017 provided
LinkedIn forby LinkedIn
last forof
year’s State last year’s Tech
European State of European Tech.
Top 10 European destinations for non- United Kingdom 32.6%
European movers into European tech

Top 10 European destinations for non- United Kingdom
Germany 11.7% 32.6%
industry in 2017
European movers into European tech
Germany 11.7%
industry in 2017 France 10.7%
LEG END
Comparison to Similar Data from SOET 2017 France
Netherlands 6.2% 10.7%
LEG END
Comparison to Similar Data from SOET 2017 Netherlands
Spain 6.2%
5.5%
Spain
Ireland 5.5%
5.0%
Ireland
Sweden 3.5%5.0%
Sweden
Switzerland 3.5%
2.3%
Switzerland 0.0 2.3%5.0 10.0 15.0 20.0 25.0 30.0 35.0

% of non-European movers
0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0
Note: % of non-European movers
All interpretations of LinkedIn data made by Atomico, not
LinkedIn.
Note: A ‘mover’ is de ned by LinkedIn as someone now Source:
working in tech industry
All interpretations who has
of LinkedIn moved
data madecountry for primary
by Atomico, not
employment between
LinkedIn. A ‘mover’ 2017
is de & 2016.
ned Portugal
by LinkedIn as and Belgium
someone not
now Source:
provided by LinkedIn.
working in tech industry who has moved country for primary
employment between 2017 & 2016. Portugal and Belgium not
provided by LinkedIn.
Though the largest share of founders in each region have seen no change in the trend of
candidates relocating internationally to join their business, they are significantly more
Thought the largest share of founders in each region have seen no change in the trend of candidates relocating
likely to have experienced an increase
internationally in this
to join their trendthey
business, in the past cantly
are signi 12 months, rather
more likely thanexperienced
to have a an increase in this trend
decline. A larger share
in theof founders
past 12 months, in rather
France & Benelux
than a decline. and DACH
A larger have
share seen aninincrease
of founders in
France & Benelux and DACH have seen an
this trend, while UKincrease
founders aretrend,
in this more likely
while UK than anyare
founders region
more to have
likely thanseen a decrease.
any region to have seen a decrease.
% change in founders' view on change in Central Europe & Baltics

candidates relocating internationally to join
their company, by subregion (past 12m) DACH
LEG END Eastern Europe
Increase
France & Benelux
No change
Decrease
Nordics
Southern Europe
UK & Ireland
0 20 40 60 80 100
% of respondents
Note:
Respondents stating 'Not able to comment' ltered out. Source:
Founder respondents only.
Taking the trend from thethe

Taking opposite
trend fromperspective
the oppositeand lookingand
perspective at looking
trendsatoftrends
founders reporting
of founders reporting changes in employee
changes in employee interest to leave the country by relocating overseas, founders in the
interest to leave the country by relocating overseas, founders in the UK & Ireland UKEastern Europe are seeing
and in
& Ireland and in Eastern Europe
the largest are compared
increase seeing theto largest increase compared to other regions.
other regions.
% change in founders' view on change in Central Europe & Baltics

employees leaving their country to relocate
to another country, by subregion (past 12m) DACH
LEG END Eastern Europe
Increase
France & Benelux
No change
Decrease
Nordics
Southern Europe
UK & Ireland
0 20 40 60 80 100
% of respondents
Note:

Competing For &
Compensating Talent
There is a wide variance

There isinathe
widelevel of average
variance founder
in the level compensation
of average at every
founder compensation atfunding round
every funding round stage between
stage between Europe and the US, both in terms of base salary and incentive
Europe and the US, both in terms of base salary and incentive pay pay.
400,000
Founder base salary and incentives by
Funding Round stage in 50th percentile by
region
300,000
LE GE ND
Base Salary
USD
200,000
Incentive Pay
Note:
Incentive pay is cash bonus or incentive, which is not related to
equity or equity value. 100,000
0
Europe US Europe US Europe US Europe US
Seed Series A Series B Series C
Source:
While there are differences

While therein average
are payinbetween
differences European
average pay and US founders,
between European the average
and US founders, the average level of founder equity
level of founder equity by funding
by funding round
round stage stage aligned
is closely is closely
fromaligned
Series Afrom Series A onwards.
onwards
Founder equity by funding round stage in

34%
50th percentile by region
30 29%
LEG END
Europe
% of founder equity
US
20 19% 19%
13% 13%
12%
10%
10
0
Seed Funding Only Post Series A Post Series B Post Series C
Note:
Advanced-HR’s compensation report details founder’s cash
and equity pay as reported by participating private, venture- Source:
backed companies. Equity data is displayed as a percentage of
European tech companies have historically either chosen not to use or have not been
fully diluted shares. Equity not related to salary nor incentives.
able to use stock options as an incentive tool for employees in the same way as has been
standard in the US Advanced-HR’s latest data suggests that there is positive change afoot
in Europe. Based on their latest employee ownership report, the average level of employee
The average level of employee ownership by funding round
ownership by funding round
stage stage
is broadly in Europe
similar is compared
in Europe broadly intoline with levels in the US.
the US
20.0
Employee ownership by funding round stage
in 50th percentile by region
LEG END 15.0
Executives
% of ownership
Staff + Other
Unissued 10.0
Note:
This details equity held by executive-level employees, staff-
level employees and remaining unissued options. It excludes 5.0
Founder’s Shares and equity allocations displayed as a
percentage of fully diluted shares. Equity not related to salary
nor incentives
0.0
Europe US Europe US Europe US Europe US
Seed Series A Series B Series C
Source:

04.4 Competing For & Compensating Talent
A positive effect of awareness-building campaigns, led in part by strong arguments from

Europe’s leading VCs, is evident in a reported increase in employee awareness of stock
A positive effect of awareness-building campaigns, led in part by strong arguments from Europe's leading VCs, is
options as a form of compensation. This increased awareness is most prevalent in larger
evident in a reported increase in employee awareness of stock options as a form of compensation. This increased
companies of 100 employees
awareness isor more.
most prevalent in larger companies of 100 employees or more.
Founders' view on change in employees

awareness of stock options as form of <=10
compensation by company size
LEGEND
Increase
No change 11-100
Decrease
100+
0 10 20 30 40 50 60 70 80 90 100
% of respondents
Note:
A majority of European founders of larger companies STOCK OPTION AWARENESS

of 100+ employees report an increase in employee
56 %
awareness of stock options of founders of European private tech
start-up or scale-ups with more than 100
employees report an increase in employee
awareness of stock options as a form of
compensation
As Europe’s tech ecosystem continues to evolve and mature, it is helping to drive greater
As Europe's
access to talent that has built tech ecosystemand
significant continues to evolve
relevant priorand mature, it is
experience athelping
otherto drive greater
startups or access to talent that has
built signi cant and relevant prior experience at other startups or scaleups. This is especially true for the region's
scaleups. This is especially true for the region’s more scaled startups with 55% of founders
more scaled startups with 55% of founders of companies with more than 100 employees reporting an increase in
of companies withthis
more than 100 employees reporting an increase in this talent trend.
talent trend.
% change in founders' view on change in

candidates with signi cant prior <=10
startup/scaleup experience joining the
industry by company size (past 12m)
LEG END
Increase 11-100
No change
Decrease
100+
0 10 20 30 40 50 60 70 80 90 100
% of respondents
Note:

The impetus for founders to ensure they have designed competitive incentives
mechanisms to attract talent is underpinned by the growing level of competition for talent
Theecosystem.
in the European tech impetus for founders
Foundersto ensure
from they have designed
all regions, competitive
though incentives
at varying levels,mechanisms to attract talent is
underpinned by the growing level of competition for talent in the European tech ecosystem. Founders from all
report increased levels of competition from both global tech giants, as well as homegrown
regions, though at varying levels, report increased levels of competition from both global tech giants, as well as
local startups thathomegrown
are playinglocal
in the same
startups talent
that pool. in the same talent pool.
are playing
100
Founders' view on change in competition for
talent from global tech giants and local
startups, by subregion 75
% of respondents
LEGEND
Tech giants, Increase
50
Local startups, Increase
Tech giants, No change
Local startups, No change
25
Tech giants, Decrease
Local startups, Decrease
0
Global tech giants Global tech giants Global tech giants Global tech giants Global tech giants Global tech giants Global tech giants
Central Europe DACH Eastern France & Nordics Southern UK & Ireland
& Baltics Europe Benelux Europe
Note:
Founder respondents only
More than half of European founders are COMPETITION FOR TALENT

seeing increased competition for talent from
54 %
global tech companies of European founders have experienced
an increase or significant increase in
competition for talent from global tech
companies in the past 12 months
The effect of increased competition for talent plays out in different ways, including salary
The effect churn
inflation, greater employee of increased competition
and more for talent
difficulty playsroles.
in filling out in different ways,point,
On the last including
forsalary in�ation, greater
employee churn and more di�culty in �lling roles. On the last point, for example, the number of job postings for
example, the number of job postings for ‘software engineer’ roles that prove hard to fill has
'software engineer' roles that prove hard to �ll has increased in every European country for which data is available,
increased in every except
European country for which data is available, except Denmark.
Denmark
46%
Share of software engineer job postings that Netherlands
42%
are hard to ll
42%
Spain
LEG END 34%
2018 42%
Belgium
34%
2017
41%
Ireland
35%
36%
Germany
32%
35%
Italy
27%
33%
France
25%
32%
Austria
25%
32%
Denmark
35%
29%
UK
20%
28%
Sweden
26%
27%
Portugal
20%
0 10 20 30 40 50
% hard to �ll 'software engineer' job postings
Note:
Hard to �ll is de�ned as % of 'software engineer' job postings Source:
on the Indeed site(s) for more than 60 days.

There is talent in Europe but it’s in demand, especially when

it comes to people who have been there and done it already.
“ The biggest challenge is finding high-quality talent. There is talent

in Europe but it’s in demand, especially when it comes to people who
have been there and done it already. This is a younger ecosystem than
Silicon Valley and it’s not easy to hire people who have been able to
implement, say, groundbreaking new AI techniques that scale a B2C
solution so it can conquer the world - they are in short supply! So you
have to always look not only for people who will help you now, but also
Tugce Bulut for those who will be what you need in several months’ time.”
Streetbees
The extent to which it has become harder to fill software engineer job postings in Europe
The extent to which it has become harder to ll software engineer job postings in Europe varies at the country
varies at the country level.
level. Thehas,
The UK UKbyhas,
somebymargin,
some experienced
margin, experienced the largest
the largest overall increaseoverall
in the share of jobs that have become
increase in the share of jobs
hard to ll. that have become hard to fill.
Change in % of software engineer job UK 42.1%

postings that are hard to ll, 2018 versus 2017
Portugal 31.7%
LEG END
YoY change (%)
France 31.1%
Austria 28.3%
Italy 28.1%
Spain 23.7%
Belgium 22.7%
Ireland 16.6%
Germany 11.2%
Netherlands 9.4%
Sweden 6.8%
Denmark -9.6%
-20.0 -10.0 0.0 10.0 20.0 30.0 40.0

% change from 2017 to 2018 in % of software engineer job postings that are hard to ll
Note:
% change in % of software engineer jobs that are hard to ll in
2018 versus 2017 by country. Hard to ll is de ned as % of Source:
'software engineer' job postings on the Indeed site(s) for more
than 60 days.

The Next Generation
The list of companies that have the largest number of alumni that have gone on to become founders of
tech companies is dominated by established tech companies, such as Google and Microsoft, as well as l
consulting rms, such as Boston Consulting Group and Accenture.
The list of companies that have the largest number Top 10 companies by number of alumni who have founded companies
of alumni who have gone on to become founders Company

of European techTop
companies is by
10 companies dominated by who
number of alumni 1 The Boston Consulting Group
established techhave
companies, such as Google and
founded companies
2 Microsoft
Microsoft, as well as large consulting firms, such
as The Boston Consulting Group and Accenture. 3 Nokia
4 Accenture
5 Siemens
6 IBM
7 Google
8 Hewlett Packard
9 Yahoo!
10 McKinsey & Company
Source:
European universities are important sources of founder talent, especially the leading technical and bus
universities. Notably, Harvard and Stanford also features amongst the top 20 academic institutions tha
large number of alumni that have founded European tech ofcompanies
European universities are important sources of Top 10 institutions by number alumni who have founded companies
founder talent, especially the leading technical University City Country

and business universities. Notably,
Top 10 institutions Harvard
by number and who
of alumni 1 University of Cambridge Cambridge United Kingdom
Stanford also feature amongst the
have founded companies top 20 academic
institutions with the largest number of alumni who 2 HEC Paris Paris France
have founded European tech companies. 3 University of Oxford Oxford United Kingdom
4 INSEAD Fontainebleau France
5 Imperial College London London United Kingdom
6 ESCP Europe Berlin (HQ) Germany
7 London Business School London United Kingdom
8 Stanford University Stanford United States
9 KTH Royal Institute of Technology Stockholm Sweden
10 Lund University Lund Sweden
Source:
Europe’s leading universities are important SOURCE OF TALENT

sources of entrepreneurial talent
#1
The University of Cambridge is the top
source of founders of European venture-
backed startups

The biggest reservations that hold back students when considering entrepreneurship
are the overall perceived risk, lack of funding, lack of ideas and an inability to find
a co-founder to join them on the journey. These concerns are generally felt equally
across students of both genders, except for access to funding, which is cited
significantly more frequently by female students.
51%
Too risky
Selecting any that apply, what are the main
reservations you have when considering Lack of funding
63%
40%
whether to become an entrepreneur?
47%
Lack of ideas
L E GE ND 29%
Inability to find a co-founder
Female
Lack of support from universities
Male 18%
Unattractive lifestyle
13%
Lack of support from family/friends

7%
9%
Lack of successful role models in Europe
5%
Lack of support from 7%
incubators/accelerators
0 10 20 30 40 50 60 70
% of respondents
Note:
Student respondents only Source:
Creator Fund is...building a community where potential

founders or people interested in starting a business meet
other people like them. They realise that entrepreneurship
is viable, and that there will be people to support them.
“ Entrepreneurship might feel riskier to students because they think

they can’t find the funding. Second, students see their friends taking
a job at a large corporation or going into a law firm and therefore
by comparison it feels risky to break out and start their own thing. I
think Creator Fund is changing that by building a community where
potential founders or people interested in starting a business meet
other people like them. They realise that entrepreneurship is viable,
Jamie Macfarlane and that there will be people to support them.”
Creator Fund
The structural imbalance in access to funds BARRIERS TO ENTREPRENEURSHIP FOR STUDENTS

for female entrepreneurs is evident in the
63 %
reservations that female students have when Female students cite access to funding as
their main reservation when considering
considering entrepreneurship whether to become an entrepreneur,
versus just 40% of male students

If Europe’s tech ecosystem is to benefit from an increased number of its next

generations of students entering into entrepreneurship, it should explore
If Europe's tech ecosystem is to bene t from an increased number of its next generations of students entering into
ways to better educate students about tech entrepreneurship and expose
entrepreneurship, it should explore ways to better educate students about tech entrepreneurship and expose
them to relevant, practical experiences
them to relevant, from
practical which they
experiences fromcan learn.
which they can learn.
Stated brie y, what could be done to better Bridging the knowledge gap 29%
support students to move straight into
entrepreneurship? Gaining practical experience in tech 16%
L EG E ND Access to funding 12%
% of respondents
University-linked accelerators 12%
Access to mentors 11%
Connecting universities to the tech

10%
ecosystem
Other 9%
0 5 10 15 20 25 30
% of respondents
Note:
Student respondents only. Based on respondents that gave
explicit responses only.
Source:
Each student should think about and use their Edge,

what is their competitive advantage against other
founders? Particularly if you’re technical, this is a must.
“ It’s never been easier for students to start companies both while at
university and upon graduating. That said, we still see students focus
on small markets and small problems when this needn’t be the case.
Each student should think about and use their Edge, what is their
competitive advantage against other founders? Particularly if you’re
technical, this is a must.”
Alice Bentinck
EF
A new generation of VCs is emerging in Europe to pioneer a model of running

a fund by students that is investing in students
Campus Capital First Momentum Oxford Seed Fund The Creator Fund UCL Entrepreneurs Wave Ventures
United Kingdom Ventures United Kingdom Pan-European VC Fund Finland
Germany United Kingdom

Tech Hubs
Concentrated & Let’s look beyond London, Paris, and Berlin. European tech
is no longer driven by just a handful of cities. Upcoming
hubs span from Cardiff, in the U.K. to Novosibirsk, Russia,
Connected Communities 5,300 kilometers away. These new communities - linked by
knowledge, talent, and capital flows - are already producing
global, category winners.
ARTICLES
05.1 Growing Communities
05.2 Every City is a Tech City
05.3 Density, through Interconnected Tech Hubs
05.4 Building and internationalising away from home
05.5 New Hubs - Where Next?

Growing Communities
Europe has huge upside potential is it succeeds in building active tech

communities in all cities where there are large tech talent clusters.
This is because there is, perhaps unsurprisingly, a very high correlation
(r-squared of 0.914) between the strength of tech community
engagement withinThere is a, perhaps unsurprisingly, very high correlation (r-squared of 0.914) between the strength of tech
cities, as defined by the number of tech-related
community engagement within cities, as de ned by the number of tech-related Meetups, and the rate of
Meetups, and the rate of companies
companies forming and formation.
raising funds
2,500
Number of funded companies (2013 to 9M London
2018) versus number of tech-related Meetups
(2013 to 9M 2018) per city, selected European 2,000
cities
# Funded companies
1,500
Paris
1,000
Berlin
Stockholm
500 Amsterdam
Helsinki Dublin
Prague Warsaw
0
0 5,000 10,000 15,000 20,000 25,000 30,000
# Meetups
Source:
But not all cities with large engineering talent pools have been able
to build vibrant communities where
But not all cities thatpeople meet
have large up frequently
engineering to have been able to build vibrant communities where
talent pools
exchange ideas andpeople
knowledge.
are meeting up with high frequency to exchange ideas and knowledge.
Number of tech-related Meetups per London

professional developer (2013 to 9M 2018)
versus number of professional developers
300,000.00
per city, selected European cities Paris
# Professional developers
Amsterdam
200,000.00
Cologne
Frankfurt am Main
Munich Berlin
100,000.00 Brussels
Prague Hamburg Dublin
0.00
0.00 0.02 0.05 0.07 0.10 0.12 0.15
# Meetups per developer
Source:

When cities succeed in building active communities around their engineering

talent, as measured by the number of tech-related Meetup events hosted per
local developer, the data suggests that capital investment follows in larger
Whenofcities
volumes. The strength techsucceed in building
community active communities
development aroundleading
is a critical their engineering talent, as measured by the number
of tech-related Meetup events hosted per local developer, the data suggests that capital investment follows in
indicator signposting thevolumes.
larger future potential of the European tech ecosystem.
Number of tech-related Meetups per London

developer versus total capital invested (2013
to 9M 2018) per city, selected European cities 20,000.00
Capital invested ($M)

Berlin
10,000.00 Paris
Stockholm
Amsterdam Dublin
Hamburg
Cologne Kiev Prague
0.00
-10,000.00
0.00 0.02 0.05 0.07 0.10 0.12 0.15
# Meetups per developer
Source:
There is huge geographic diversity amongst the Top 20 fastest-growing tech

hubs in Europe, as There is hugeby
measured geographic diversity
the annual growth amongst the Top 20tofastest-growing
in attendees tech-relatedtech hubs in Europe, as measured by the
annual
There growth
is huge in attendees
geographic to tech-related
diversity amongst Meetup
the Topevents
20 in those cities.
fastest-growing Zughubs
tech in Switzerland, home
in Europe, as to a growing
measured by the
Meetup events in those cities. Zug in
crypto community,
Switzerland,
ranked number
home tofastest-growing
one as the
a growing crypto community overall.
annual growth in attendees to tech-related Meetup events in those cities. Zug in Switzerland, home to a growing
community, ranked number one as the fastest-growing community overall.
crypto community, ranked number one as the fastest-growing community overall.
Zug, Switzerland 177%
Top 20 fastest-growing tech hubs in Europe
by year-on-year growth of attendees to tech- Novosibirsk, Russia
Zug, Switzerland 173%
177%
Top 20 fastest-growing tech hubs in Europe
related Meetup events per city
by year-on-year growth of attendees to tech- Novosibirsk, Russia
Ghent, Belgium 173%
165%
related Meetup
DATASET: TOP 10events
HU BS per city
Ghent,
The Hague, Belgium
Netherlands 121% 165%
DATASET:
LEG END TOP 10 HU BS
Katowice,
The Hague, Poland
Netherlands 101% 121%
YoY
LEG growth 2017-2018 (%)
END
Katowice,
Dortmund, Poland
Germany 101%
100%
YoY growth 2017-2018 (%)
Newcastle, United Kingdom
Dortmund, Germany 88% 100%
Newcastle, United
Sofia,Kingdom
Bulgaria 77% 88%
Sofia,Germany
Essen, Bulgaria 77%
75%
Cardiff, United
Essen, Kingdom
Germany 74%
75%
Cardiff, United Kingdom 0 25 50 7574% 100 125 150 175 200

YoY growth (%)
0 25 50 75 100 125 150 175 200
Note: YoY growth (%)

2018 annualised based on RSVPs to end of September 2018.
Only
Note:hubs with at least 1,000 RSVPs in 2017 are included in the Source:
analysis.
2018 annualised based on RSVPs to end of September 2018.
Only hubs with at least 1,000 RSVPs in 2017 are included in the Source:
analysis.
The number of tech-related Meetup events in Europe continues to hit new highs, although the rate of year-on-year
The number of tech-related Meetup events in Europe continues to hit new highs,
growth
The is decelerating.
number In 2018,
of tech-related the level
Meetup of activity
events in Europeoncontinues
Meetup alone equates
to hit to around 200the
events
rate hosted every
although the rate of year-on-year
single day throughgrowth
the year. is decelerating. In 2018, the level of new highs,
activity onalthough of year-on-year
growth is decelerating. In 2018, the level of activity on Meetup alone equates to around 200 events hosted every
Meetup alone equates to around 200 events hosted every single day through the year.
single day through the year.
80,000 68
# of tech-related Meetups hosted in Europe
72,233
per annum 80,000 68
# of tech-related Meetups hosted in Europe
65,101 72,233
per annum 60
LEG END 60,000 51 65,101
60
LEGEvents
END hosted 60,000 51 51,135
YoY growth
YoY growth
Events (%)
hosted
# Meetups
51,135
40
YoY growth
YoY growth (%) 40,000

# Meetups
36,226
40
(%) (%)
27
40,000
36,226
23,924 27
20
20,000
23,924 11
20
20,000
11
0 0
2014 2015 2016 2017 2018
0 0
2014 2015 2016 2017 2018
Note: Source:
2018 annualised based on data to end of September 2018
Note: Source:

“ We’ve recently done deals with amazing companies in cities as

diverse as Marbella to Bristol. Gone are the days where growth
Today, if you build a capital is limited to the Valley, a fact that Silicon Valley itself now
acknowledges: with the majority of VCs based there now planning to
business that’s obsessed invest internationally. Today, if you build a business that’s obsessed
with the customer, the capital will come to you.”
with the customer, the
capital will come to you. Simon Cook
Draper Esprit
The
The density
density of these
of these tech-related
tech-related Meetup Meetup
communitiescommunities relative to the overall population of individual cou
relative to the
overall population of
varies signi cantly individual
across
The density countries
Europe,
of these varies significantly
led byMeetup
tech-related Ireland, across relative to
Luxembourg,
communities thetheNetherlands and
overall population Switzerland.
of individual countries
Europe, led by Ireland, Luxembourg,
varies the Netherlands
signi cantly across and
Europe, led by Switzerland.
Ireland, Luxembourg, the Netherlands and Switzerland.
# of active members# ofof tech-related

active Meetup Meetup
members of tech-related
groups per 1,000 inhabitants by inhabitants
groups per 1,000 country by country
LE G E ND
L E G E ND upto 7.0
upto 7.0 5.0 to 6.0

4.0 to 5.0
5.0 to 6.0
3.0 to 4.0
4.0 to 5.0 2.0 to 3.0
3.0 to 4.0 1.0 to 2.0
upto 1.0
2.0 to 3.0
1.0 to 2.0
upto 1.0
Source:
Source:

In Europe’s largest and most mature tech communities, there are signs of a slowdown in
In Europe's
the level of participation largest
around and most mature
tech-related techevents,
Meetup communities, there arethose
but outside signs of a slowdown in the level of participation
leading
In Europe's
around largest and
tech-related most mature
Meetup events, tech
but communities,
outside those there are
leading signs
hubs of acontinues
there slowdowntoinbe
the levelgrowth
rapid of participation
in
hubs there continues to be
In Europe's
around
rapid growth
largest
tech-related
and most
Meetup
in events,
engagement, including
mature tech communities, in cities
there suchofas
are signs a slowdown in the level of participation
engagement,
around including
tech-related in cities
Meetup suchbut
events, as outside
but Hamburg,
outside
those
those
leading
Zurich,
leading
hubs there
Manchester
hubs there
continues to be rapid growth in
or Wroclaw.
continues to be rapid growth in
Hamburg, Zurich, Manchester
engagement, or Wroclaw.
including in cities such as Hamburg, Zurich, Manchester or Wroclaw.
engagement, including in cities such as Hamburg, Zurich, Manchester or Wroclaw.
Top 20 hubs by level of tech Meetup activity
315,839 315,497
in 2018,
Top ranked
20 hubs by number
by level of techofMeetup
Meetupactivity DATASET: TOP 5 HUBS
Top 20 hubs by level of tech Meetup activity
attendees
292,792 315,839 315,497
in 2018, ranked by number of Meetup 300,000 315,839 315,497
in 2018, ranked by number of Meetup 292,792
attendees 300,000 292,792
attendees 300,000
attendees
L EG E ND 209,386
attendees
L EGLondon
E ND 200,000 209,386
attendees
L EG E ND 209,386
160,608
London
Berlin 200,000 150,866 153,528
# Meetup
London 200,000 136,537
160,608
Berlin
Paris 150,866 153,528
# Meetup
160,608
Berlin 150,866 153,528
# Meetup
105,118 136,537
Paris
Amsterdam 136,537
Paris 100,000 83,239 105,118 81,746 84,647
Amsterdam
Munich 105,118
63,857
Amsterdam 61,313
83,239 84,647
100,000 81,746
Munich 100,000 83,239 41,471 81,746 84,647
35,714 37,333
61,313 63,857
Munich 63,857
61,313
41,471
In Europe's largest and most mature tech communities, 35,714there are signs of a slowdown in the level of participation
11,492
35,714
37,333
37,333 41,471
In Europe's
around largest and
tech-related most mature
Meetup events, tech communities,
but outside 11,492there are signs of a slowdown in the level of participation
0those leading hubs
11,492 there continues to be rapid growth2018
in
2014 2015 2016 2017
around tech-related
engagement, Meetup
including events,
in cities suchbut outside0 those
as Hamburg, leading hubs there continues to be rapid growth in
0 Zurich,
2014 Manchester
2015 or Wroclaw.
2016 2017 2018
engagement, including in cities such as Hamburg, Zurich, 2014 Manchester
2015 or Wroclaw.
2016 2017 2018
Note: Source:
L2018
EG E ND
annualised based on RSVPs to end of September 2018 80,000DATASET: HUBS 6-10
Note: Source: 74,792
LNote:
EG E ND Source:
2018Madrid
annualised based on RSVPs to end of September 2018 80,000 74,792
2018 annualised based on RSVPs to end of September 2018
Madrid 65,332
Warsaw
Warsaw 65,332 59,895
Barcelona 58,559
60,000 59,895
Barcelona 58,559
Istanbul 50,929 52,017
60,000
attendees
Istanbul 50,929 46,445 52,017

Dublin
attendees
46,445
Dublin
37,206
# Meetup
40,000
37,206
# Meetup
40,000
25,852
25,852 22,174
18,516 22,174
20,000 16,605
18,516
20,000 16,605
8,880
e tech communities, 8,880 there are signs of a slowdown in the level of participation
7,604
2,207 7,604
, but outside those leading hubs there continues to be rapid growth in
2,207
0
h as Hamburg,
e tech communities,
0
Zurich,
2014 Manchester
there are signs
2015 or
of Wroclaw.
a slowdown
2016 in the
2017level of participation
2018
, but outside those2014 leading hubs there continues

2015 2016
to be rapid
2017
growth2018
in
50,000
h as Hamburg,
Source:
Zurich, Manchester or Wroclaw.
LNote:
E GE ND DATASET: HUBS 11-15 43,959
2018Hamburg
annualised based on RSVPs to end of September 2018 50,000
40,000 36,749
36,068 36,224 43,959
L E GEZurich
ND
40,962
Stockholm
Hamburg 31,746 32,064
40,000
# Meetup attendees
Oslo 36,068 28,523

36,224 36,749
Zurich 30,000 27,539
Manchester
Stockholm 24,424 31,746 32,064
22,217
# Meetup attendees
Oslo 28,523
20,575
30,000 19,705
27,539
18,805
Manchester 20,000 24,424
15,922
22,217 13,875
12,580 19,705 20,575
18,805 11,249
20,000
10,000 8,094 15,922
6,774 13,875
12,580
3,174 11,249
In Europe's largest and most mature tech communities,
10,000 8,094 there are signs of a slowdown in the level of participation
6,774
around tech-related Meetup events, but outside0 those leading hubs
2014
3,174 2015there continues
2016 to be rapid
2017 growth2018
in
In Europe's largest
engagement, and most
including mature
in cities suchtech communities,
as Hamburg, Zurich, there are signsorofWroclaw.
Manchester a slowdown in the level of participation
around tech-related Meetup events, but outside 0 those leading hubs there continues to be rapid growth in
2014 2015 2016 2017 2018
engagement,
Note: including in cities such as Hamburg,
Source: Zurich, Manchester or Wroclaw.
2018 annualised based on RSVPs to end of September 2018 38,018
40,000
L EG E ND HUBS 16-20
Budapest 40,000 38,018
L EGWroclaw
E ND
28,869
30,000 33,680
Budapest
Vienna
Meetup attendees
Wroclaw
Copenhagen 23,408 28,869
23,112
22,676
30,000
Vienna
Frankfurt
# Meetup#attendees
19,062 18,607
Copenhagen 20,000 23,408 23,112
16,829 22,676
Frankfurt 14,308
19,062 18,607
20,000 11,302
16,829
9,131 14,308
10,000 7,889
11,302
4,216 3,746
9,131
10,000 1,445 7,889
4,216 3,746
0
2014
1,445 2015 2016 2017 2018
0
2014 2015 2016 2017 2018
Note: Source:
Note: Source:

Talent is necessary, but talent alone is not TECH COMMUNITIES AND COMPANY FORMATION
enough. Cities need to engage that talent in active
0.914
communities to drive greater levels of company The correlation between the strength of
formation tech community engagement within cities
and the rate of company formation and
funding has an r-squared of 0.914.

Photo: Sami Heiskanen/ Juuso Hmlinen
Every City is a Tech City
Data on the size of tech-related Meetup communities per city is useful in helping to identify a new generation of
hubs that are emerging across the region and are achieving a meaningful scale in terms of the number of active
participants
Data on the size of tech-related in local tech-related MeetupTop
Meetup events
10 most popular tech-related Meetup event topics in Europe in 2018
communities per city is useful in helping to identify Country 2016 2017 2018 YoY 2017-2018 (%)
a new generation of hubsEuropean
that are emerging
cities across
surpassing 1,000 members of Antalya Turkey 97 209 1,715 721
tech-related Meetup groups for the rst time
the region and are achieving
in 2018
a meaningful scale in Cologne Germany 83 407 1,061 161
terms of the number of active participants in local Minsk Belarus 580 895 1,259 41
tech-related Meetup events Ghent Belgium 329 883 1,212 37
Zug Switzerland 431 852 1,159 36
Mannheim Germany 586 881 1,190 35
Essen Germany 516 869 1,075 24
Rzeszów Poland 858 946 1,145 21
Münster Germany 440 991 1,184 19
The signs that every city is becoming - or will eventually

Freiburg become -569
Germany a tech
958city1,031
in Europe
8 continue to strengthen.
There are now more 180+ hubs across Europe that Arnhemhost Netherlands
tech-related691 Meetup
989 events
1,027 4 with high levels of regularity
throughout the year.
Source:
200
The signs that every#city in Europe is becoming - or will eventually become - a tech city
European cities with >50 tech-related
182
The signs
Meetup thatperevery
events year city is becoming - or will eventually become - a tech city in Europe continue
172 to strengthen.
continue to strengthen. There are now 180+ hubs across Europe that host tech-related
There are now more 180+ hubs across Europe that host tech-related Meetup events with high levels of regularity
Meetup events withthroughout
high
LEG ENDlevels of regularity throughout 150
the year. the year. 141
# European cities
# European cities
113
200
# European cities with >50 tech-related 100 182
Meetup events per year 172
74
LEGEND 150
48 141
# European cities 50
# European cities
25 113
100
0
2012 2013 2014
74 2015 2016 2017 2018
50 48
Note: Source:
2018 annualised based on data to end of September 2018 25
The extent to which the growth of the European 0 tech ecosystem to now has been driven by just a handful of cities
2012 2013 2014 2015 2016 2017 2018
is evident by comparing the share of capital invested over a �ve-year period in those leading cities versus their
relative share of professional developer talent. For example, 76% of all capital invested into Europe since 2013 has
�owed
Note: to just 10 hubs representing just Source:
30% of the talent pool.
It’s clear that Europe’s tech ecosystem to date has been driven by just a handful of cities.
Share of capital investedthe
(2013 to 9M 2018)
The share of capitalThe extent
invested toover
which growth
a five-year of the European
period
versus share of professional developer talent
techcities
in leading
80 ecosystem to now
versus has
their been driven by just
relative 76%a handful of cities
is evident
share of professionalpooldeveloperby comparing
for Top 3, 5 & talent
the share of capital invested over a �ve-year
10 hubs is telling. For example, 76% of all capital invested
period in those leading cities versus their
relative share of professional developer talent. For example, 76% of all capital invested into Europe since 2013 has
into Europe since 2013 has flowed to just 10 hubs representing just 30% of the talent pool.
�owed to just 10 hubs representing just 30%60of the talent pool.
62%
LEGEND
% of European total
52%
% capital invested
% professional developers
Share of capital invested (2013 to 9M 2018) 80
40 76%
versus share of professional developer talent
pool for Top 3, 5 & 10 hubs 30%
62%
60 20%
LEGEND 20
15%
% of European total
52%
% capital invested
% professional developers
400
Top 3 hubs Top 5 hubs Top 10 hubs
30%
Note:
Top 3 hubs based on total capital invested 2013-3Q2018 are
Source: 20%
London, Berlin, and Paris. Top 5 adds Stockholm and 20
Barcelona. Top 10 adds Cambridge, Dublin, Amsterdam, Madrid, 15%
and Moscow.
0
Top 3 hubs Top 5 hubs Top 10 hubs
Note:
Top 3 hubs based on total capital invested 2013-3Q2018 are
London, Berlin, and Paris. Top 5 adds Stockholm and Source:
Barcelona. Top 10 adds Cambridge, Dublin, Amsterdam, Madrid,
and Moscow.
It’s interesting to compare the ‘bang for buck’ different cities have achieved by measuring
across them the level of capital investment per local professional developer. Such
comparison showsIt's interesting to compare the 'bang for buck' that different cities have achieved by measuring the level of capital
Berlin stands apart as a real outlier, having attracted a disproportionate
investment per local professional developer in those cities. In doing this, Berlin stands apart as a real outlier having
level of investmentattracted
relativeato its local developer
disproportionate level of pool.
investment relative to its local developer pool.
Top 10 European cities for capital invested ($) 100,000 $97,404

per professional developer
LEGEND 75,000
Capital invested ($)

Capital invested per developer ($) $66,337
$63,019
European average ($)
50,000 $45,000
$36,138
$31,255
$24,432
25,000
$13,906 $13,906 $13,906 $13,906 $13,906 $13,906 $19,106 $19,096
$12,224
on
in
ris
rg
rid
ki
en
on
rli
in
bl
ol
bu
nd
ag
Pa
ad
Be
ls
Du
el
kh
nh
Lo
He
rc
oc
Ha
pe
Ba
St
Co
Note:
Investment amounts are based on capital invested in the city in
aggregate between 2012 and September 2018 divided by the Source:
total number of professional developers (2018) in the city.
The emergence of global hits like UIPath from Bucharest,

Supercell from Helsinki, Farfetch from Lisbon -- all from
far beyond the unicorn-factories of London, Stockholm
and Berlin - marks a new era for Europe.
“ The big change is that there are now plenty of examples of how
it’s possible to create world-changing companies from all over
Europe. The emergence of global hits like UIPath from Bucharest,
Supercell from Helsinki, Farfetch from Lisbon -- all from far beyond
the unicorn-factories of London, Stockholm and Berlin - marks a
new era for Europe. However, so far founders from non-hub cities
have been inadequately served by investors who tend to focus on
Ophelia Brown the traditional geographies and are not equipped to offer the same
Blossom Capital support when a startup originates from a small town in, for example,
Germany or Estonia.”
Europe’s tech community outside its Top TECH HUBS EVERYWHERE

20 hubs continues to flourish
53 % of all tech-related Meetups in Europe that

now happen outside of the Top 20 hubs in
the region, up from 42% in 2014.
Berlin’s relatively small professional developer CAPITAL BANG PER DEVELOPER BUCK
community has attracted a disproportionate
$97,404
amount of capital investment compared to any other
European city, including London
capital invested since 2013 per developer in Berlin,

the highest concentration of capital invested per
developer of any European city

Density, through
Interconnected Tech Hubs
The European ecosystem benefits from interconnectivity in a number of ways

that help drive the flow of knowledge,
The European talent,
ecosystem bene and capital.
ts from Exchanges
interconnectivity in amongst
a number of ways that help drive the ow of
The European
knowledge, ecosystem
talent and beneThe
capital. ts from
ow interconnectivity
of useful ideas andinknowledge
a number of ways thatthe
helpEuropean
drive thetech
ow ecosystem
of
counterparts, whether founders
knowledge, orand
talent investors,
capital. enables
The ow of the flow
useful ofand
ideas useful ideasthroughout
knowledge throughout the European tech ecosystem
is
is
enabled by exchanges between counterparts, whether founders or investors.
and knowledge throughout
enabled
The bythe
European European
exchanges
ecosystem techcounterparts,
between
bene ecosystem.
ts whether founders
from interconnectivity or investors.
in a number of ways that help drive the ow of
knowledge, talent and capital. The ow of useful ideas and knowledge throughout the European tech ecosystem is
enabled by exchanges
I have exchanged between
useful ideas counterparts, whether founders or investors.
and knowledge
I havemy
with exchanged useful
counterparts ideas
from andhubs
other knowledge DATASET:
Founder orOCCUPATION
startup/
67% 33%
with my counterparts from other hubs scale-uporemployee
Founder startup/
67% 33%
DATAS ET: OCCU PATION scale-up employee
I have ET:
DATAS exchanged useful ideas and knowledge
OCCU PATION
LE GEND
with my counterparts from other hubs
LE GEND Founder or startup/
67% 33%
Yes scale-up employee
DATAS
Yes ET: OCCU PATION
No Investor 91% 9%
No
LE GEND Investor 91% 9%
Yes
No Investor 91% 9%
Other 69% 31%

Other 69% 31%
Other 0 20 69% 40 60 80 31% 100

0 20 40 60
% of respondents 80 100
% of respondents
Note:
In subregions, only founders' and startup/scale-up employees'
Note: 0 20 40 60 80 100
The European
responses included.
In subregions, ecosystem
In company
only founders' andsizes, bene�ts
only founders'
startup/scale-up from Source:
employees' interconnectivity in a number of ways that%help
Source:
drive the �ow of
of respondents
responses.
responses included. In company sizes, only founders'
knowledge,
responses.
Note:
talent and capital. The �ow of useful ideas and knowledge throughout the European tech ecosystem is
enabled
In subregions,by
onlyexchanges between
founders' and startup/scale-up counterparts, whether founders or investors.
employees'
responses included. In company sizes, only founders' DATASET: COMPANY SIZE BY # OF EMPLOYEES
Source:
responses.
I have exchanged useful ideas and knowledge

with my counterparts from other hubs <=10 74% 26%
DATAS ET: COMPAN Y SIZ E BY # OF EMP LOYEES
LEG END
Yes
No 11-100 67% 33%
100+ 77% 23%
The European
The European ecosystem
ecosystem bene�ts bene ts from from interconnectivity
interconnectivity
0 10
inaanumber
20
in number
30
ofways
40
of ways 50
thathelp
that helpdrive
60
drive
70
the
the
80
�owowofof 100
90
% of respondents
knowledge, talent and capital. The
knowledge, talent and capital. The �ow of useful ideas and knowledge throughout the European tech ecosystem isis
ow of useful ideas and knowledge throughout the European tech ecosystem
enabled
Note:
enabled byonly
by
In subregions,
exchanges
exchanges between
between
founders' and startup/scale-up
counterparts, whether
counterparts,
employees'
whetherfounders
foundersororinvestors.
investors.
responses included. In company sizes, only founders' DATASET: SUBREGION
Source:
responses.
II have
have exchanged
exchanged useful
useful ideas
ideas and
and knowledge
knowledge Central Europe & Baltics 78% 22%
with my
with my counterparts
counterparts from
from other
other hubs
hubs Founder or startup/
67% 33%
scale-up employee
DATAS ET:
DATAS ET: S
OCCU
UBREPATION
GION
DACH 73% 27%
LE GEND
LEG END Eastern Europe 79% 21%
Yes
Yes
No
No Investor
France & Benelux 67% 91% 33% 9%
Nordics 64% 36%

Other 69% 31%
UK & Ireland 65% 35%
00 2020 4040 6060 8080 100

100
% of respondents
% of respondents
Note:
Note:
In subregions,
In subregions, only
only founders'
founders' and
and startup/scale-up
startup/scale-upemployees'
employees'
responses included.
responses included. In
In company
company sizes,
sizes, only
onlyfounders'
founders' Source:
Source:
responses.
responses.

The combination of an increase in competition for talent in established

European tech hubs together with the increased attractiveness of a new
generation of tech hubs across the region is helping to drive an increase in
Theopening
founders’ interest in combination of an increase
satellite offices in
tocompetition for talent
tap new talent in established
pools. 80% European tech hubs together with the
increased attactiveness of a new generation of tech hubs across the region is helping to drive an increase in
of founders of companies with more than 100 employees state an increased
founders' interest in opening satellite o�ces to tap new talent pools. 80% of founders of companies with more
interest in pursuingthan
this ‘distributed
100 office’
employees state strategy.interest in pursuing this distributed o�ce strategy
an increased
Distribution of change in founder interest in

opening satellite o ces to tap new talent <=10
pools by company size (past 12m)
LEG END
Increase
No change 11-100
Decrease
100+
0 10 20 30 40 50 60 70 80 90 100
% of respondents
Note:
Respondents stating 'Not able to comment' �ltered out. Source:
The principle of scaling a European tech company by building in a distributed

way across multiple offices in different cities is firmly embedded. By the time
The trend of scaling European tech companies by building in a distributed way across multiple o�ces in different
European startupscities
haveishit 100 employees or more, more than half of them
�rmly embedded. By the time European startups have hit 100 employees or more, more than half of them
have established ahave
satellite officeaor
established teamo�ce/team
satellite in anotherinhub.
another hub.
My company has established satellite

o ces/teams in other hubs <=10 21% 79%
LEG END
Yes
No
11-100 33% 67%
100+ 58% 42%
0 10 20 30 40 50 60 70 80 90 100
% of respondents
Note: Source:

In addition to opening offices in new hubs to tap alternative talent

pools, a large number of European founders recruit high-performing
In addition
talent from other hubs, thoughto opening o�ces in of
the likelihood new hubs to
doing sotap alternative talent pools, a large number of European founders
increases
recruit high-performing talent from other hubs, though the likelihood of doing so increases signi�cantly as the size
significantly as theof
size
theof the company
company increases.
increases.
I have recruited high-performing talent from

other hubs, by company size by # of <=10 19% 81%
employees
LEG END
Yes
No 11-100 35% 65%
100+ 63% 37%
0 10 20 30 40 50 60 70 80 90 100
% of respondents
Note: Source:
Europe’s tech ecosystem also benefits from an interconnected flow

of capital, driven by connections between investors and founders
across borders. Europe’s
Europe'sVCs, in particular,
tech ecosystem also are
benehighly connected
ts from and
an interconnected ow of capital, driven by connections between
Europe's
Europe'stech
investors
have almost unanimously tech
andecosystem
builtecosystem
founders also
alsobene
across
relationships bene
andtstsfrom
borders. from an
an
Europe's
benefit interconnected
interconnected
fromVCs, ow
oware
in particular,
positive ofofcapital,
capital,connected
highly driven
drivenby
byconnections
connectionsbetween
between
and have almost
investors
investorsand
and
unanimously founders
founders
built across
acrossborders.
relationshipsborders.
and Europe's
beneEurope's
t from
interactions with fellow investors from other hubs across the region – aVCs,
VCs,in
inparticular,
positiveparticular,are
are
interactions highly
highly
with connected
connected
fellow and
and
investors have
have
from almost
almost
other hubs across
unanimously
unanimously
the region. built
builtrelationships
relationshipsand
andbene
bene t tfrom
frompositive
positiveinteractions
interactionswithwithfellow
fellowinvestors
investorsfrom
fromother
otherhubs
hubsacross
across
unique advantagethe given the diversity of the European market as a whole.
theregion.
region.
I have interacted positively with investors
OCCUPATION
from
I have other hubspositively
I haveinteracted
interacted positivelywith
withinvestors
investors Founder or
startup/scale-up 56% 44%
from
fromother
DATASE other
T : hubs
hubs
OC CUPATI O N employee
Founder oror
Founder
startup/scale-up
startup/scale-up 56%
56% 44%
44%
DATASE
DATASE T :T :OC
OCCUPATI
CUPATIOO
NN employee
employee
LE G E ND
Investor 95% 5%
LE
LE Yes
GG
E E
NDND
Investor
Investor 95%
95% 5%
5%
No
Yes
Yes
Europe's
No tech ecosystem also bene ts from an interconnected ow of capital, driven by connections between
No
0 20 40 60 80 100
% of respondents
investors and founders across borders. Europe's VCs, in particular, are highly connected
00 2020 4040
%%
ofof
6060
and have almost
respondents
respondents
8080 100
100
unanimously built relationships and bene t from positive interactions with fellow investors from other hubs across
the region.tech ecosystem also bene ts from
Europe's Source:
an interconnected ow of capital, driven by connections between
Europe's tech ecosystem also bene ts from an interconnected
COMPANY
Source:
Source: ow of capital, driven by connections between
SIZE BY # OF EMPLOYEES
investors and founders across borders. Europe's VCs, in particular, are highly connected and have almost
investors and founders across borders. Europe's VCs, in particular, are highly connected and have almost
the region.
the region. <=10 59% 41%
Note:
I have
Note: interacted
Note:
responses included. Inpositively
company sizes,with
only investors
founders'
Inresponses.
In
subregions,
subregions, 11-100
from otheronlyonly
hubsfounders'
founders'
and
and
startup/scale-up
startup/scale-upemployees'
employees'
Founder or 72% 28%
responses
responses
included.
included.
InIn
company
company
sizes,
sizes,
only
only
founders'
founders' startup/scale-up
<=10 59%
56% 44% 41%
responses.
responses.
DATASE T : OC CUPATI O N employee
LE G E ND 100+ 79% 21%

Investor 95% 5%
Note:Yes 11-100
72% 28%
In subregions,
No only founders' and startup/scale-up employees'
responses included. In company sizes, only founders' 0 10 20 30 40 50 60 70 80 90 100
0 20 40 60 80 100
responses. % of respondents
% of respondents
100+ 79% 21%
Note:
In subregions, only founders' and startup/scale-up employees' Source:
Source: 0 10 20 30 40 50 60 70 80 90 100
responses. % of respondents
Source:
Note:
responses.

Photo: Sami Valikangas
Europe’s tech ecosystem also benefits from a valuable series of international

events that help to interconnect hubs via network flow. The overwhelming
Europe's
majority of investors and atech ecosystem
clear majorityalso
of bene�ts
foundersfrom a valuable
and startup series of international events that help to interconnect
employees
hubs via network �ow. The overwhelming majority of investors, and a clear majority of founders and startup
have attended events in otherhave
employees, hubs that they
attended have
events found
in other useful.
hubs that have been useful to them.
I have attended useful events in other hubs

Founder or startup/scale-up employee 67% 34%
LEG END
Yes
No
Investor 85% 15%
Other 67% 33%
0 20 40 60 80 100
% of respondents
Note:
In subregions, only founders' and startup/scale-up employees' Source:
responses included. In company sizes, only founders'.
The continued development and growth of the

numerous tech-hubs across Europe will be a critical
factor in incubating the next big tech successes.
“ The continued development and growth of the numerous tech-hubs

across Europe will be a critical factor in incubating the next big tech
successes. Europe boasts some of the world’s most progressive
universities and research institutions, contributing directly to the
growing and diverse pool of ideas and talent across London, Paris,
Berlin, Stockholm, as well as other European hubs. Governments and
policy makers across the region are also increasingly responsive to
Munish Varma the technology-led agenda through forward-thinking regulation and
investment in next-generation digital infrastructure. These factors
SoftBank Vision Fund
combine to provide the foundation for partnerships between bold
entrepreneurs and bold investors in building the businesses that
fundamentally disrupt the status quo.”

Building and internationalising
away from home
The overwhelming majority of European founders are happy in Europe.

Just 6% would chooseIt's often said that
to found andEuropean founders
build their 'all wantintoSilicon
company move toValley
the Valley'. This is not what the data shows. Only 6% of
European founders would choose to found and build their company in Silicon Valley if given the chance to start
if given the chance over
to start
again.over again.
If you were to start over, where would you I would stay where we are now 63.9%
choose to found and build your company?
A different European city 19.3%

LEG END
% of founders
Silicon Valley/Bay Area 6.2%
Somewhere else (e.g. Asia) 3.7%
Other (please specify) 3.6%
A different US city (not Silicon Valley/Bay

3.0%
Area)
0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0

% of respondents
Note: Source:
Given that 28% of European founders are building their companies

outside of their home countries, it’s clear that founders will move if
Given
necessary to find the thatlocation
right 28% of European
to buildfounders are buildingBut
their company. their companies
this is outside of their home country, it's clear that
founders will move if necessary to nd the right location from which to build their company. But this is not
not necessarily their first choice. The majority of founders choose to
necessarily their rst choice. The majority of founders choose to build from exactly where they are or where they
build exactly wherehave
theyanare or where
established they have an established network.
network.
What was the most important consideration I was already living here 46.1%
for you when choosing where to locate
your company when you founded it? Strength of my personal network here 14.2%
LEG END
Access to relevant talent 7.2%
% of counders
Strength of the local tech community 5.6%
Access to customers 5.0%
Friendly business environment 4.9%
Access to investors (angels, VCs, etc) 4.5%
Cost of talent 3.6%
Other 2.7%
Access to knowledge 2.3%
Friendly regulatory environment 2.2%
Cost of office space 1.1%
0.0 10.0 20.0 30.0 40.0 50.0

% of respondents
Note: Source:

European teams entering Y Combinator are voting with their feet on where to build their
business; YC graduates who have returned to Europe have raised 5x more in the past two
European teams entering Y Combinator are voting with their feet on where to build their business; YC graduates
years than those who moved their startups
that have returned to Europe to the
have US (the
raised difference
5x more intwo
in the past absolute amounts
years than those that moved their startup to the
across years is simply
US a function of the relative age of the different cohorts).
Total funds raised by companies per YC cohort year ($M)

Funds raised by Y Combinator cohorts, $170.6M
Europe vs US-based ($M)
150.0
LEG END
HQ in Europe
$102.3M
HQ in US 100.0
$66.9M $71.6M
50.0
$36.6M $32.3M
$25.6M
$8.8M $5.9M $5.0M
0.0
2014 2015 2016 2017 2018
Blossom
Source: Blossom Capital
Capital
European founders going through Y Combinator are FOUNDER RELOCATION TRENDS

voting with their feet and choosing to return to Europe
5x
European founders that have graduated
from Y Combinator and returned to Europe
have raised 5x more than those that moved
their startup to the U.S.
Blossom Capital
European graduates of YC that elect to build from Europe are attracting investment from the region's leading
investors, as well as from top US-based funds.
Selected examples of YC graduates that are building from Europe
European graduates of YC that elect to build
from Europe are attracting investment from the YC Cohort HQ Location Selected Investors
Selected examples of YC graduates that are
region’s leading investors, as well as from top Duffel Summer 2018 London Blossom, Index
building from Europe
U.S.-based funds. Let's do This Winter 2018 London Shasta
Quit Genius Winter 2018 London Village Global
Siite Winter 2018 Paris eFounders, Index
Station Winter 2018 Paris Accel, eFounders
Veriff Winter 2018 Tallinn Mosaic, ACE & Company
Fat Lama Summer 2017 London Atomico, Blossom, Greylock
MessageBird Summer 2016 Amsterdam Accel, Atomico
Blossom Capital
Blossom
Source:
Capital
Around two-thirds of Europe's scale-ups have established an

Around two-thirdsinternational
of Europe’so scale-ups
ce. have established an international office
Share of leading VC-backed European tech

61%
companies with an international o ce 60
footprint
LEG END
% of companies
International o ce location 40 39%

No international o ce location
20
0
Companies
Note:
Based on a sample 120 European tech companies that have
reached $B+ milestone and/or raised more than $50M in Source:
venture capital.

The US is the #1 destination for European tech scale-

The US is the #1 destination for European tech scale-ups
ups that set up an international office
that set up an international o ce.
US 59%
Top 10 most popular countries for
international o ce locations of European UK 53%
tech scale-ups that have internationalised
their o ce footprint Germany 31%
Australia 20%
LEGEND
% of internationalised companies with o ce in Netherlands 18%
country
Spain 18%
France 16%
Italy 14%
Poland 14%
0 10 20 30 40 50 60
% of internationalised companies with o ce in country
Note:
Based on a sample 120 European tech companies that have
reached $B+ milestone and/or raised more than $50M in Source:
venture capital.
Although London ranked as the most cited destination city amongst all respondents, there
are clear differences in the top city preferences when analysing the results based on the
sub-region of origin of survey participants.
Although London ranked as the most cited destination city amongstAlthough
OnLondon
thatranked
all respondents,
basis, it’s
asclear
there are
apparent
the most
that London
cited destination
differences in
is only
city amongst all respondents, there are clear differences in
the
the top city number
preferences one
when city for
analysing respondents
the results based on thefrom UKcity
the top
sub-region &origin
of Ireland
preferences and
when
of survey from the
analysing
participants. OnMediterranean
the region.of origin of survey participants. On
results based on the sub-region
that basis,
that basis, it's apparent that London is only the number city for respondents it's apparent
from thatand
UK & Ireland London
from is
theonly the number city for respondents from UK & Ireland and from the
Mediterranean region. DATASET: BENELUX Mediterranean region. DATASET: WESTERN EUROPE
Top 5 hubs where
founders
Top 5 hubs where founders would
would start a Amsterdam
Top 5 hubs where founders would start a Berlin
48 42
start by
company tomorrow, a company
region company tomorrow, by region
tomorrow, by
DATAS ET : B ENELUX DATAS E T : WE ST E R N E U R OP E
London 33 Paris 37
LE G END region L E G E ND
Share of founders (%) Share of founders (%)
Berlin 30 London 23
Eindhoven 18 Cologne 14
Paris 18 Barcelona 13
Although London ranked as the most cited destination 0 city amongst

10 all 20respondents,
Although London 30 there
ranked are clear
40as the mostdifferences in 0
50 cited destination5 city amongst
10 15 all respondents,
20 25 there
30 are
35 clear
40 differences
45 in
the top city preferences when analysing the results based on the sub-region the topShareofof origin
city of survey
preferences
founders (%)
whenparticipants.
analysing On the results based on the sub-region of origin of survey participants. On
Share of founders (%)
that basis, it's apparent that London is only the number city for respondents
Note:
that
Note:
from
basis, it'sUK & Ireland
apparent thatand from the
London is only the number city for respondents from UK & Ireland and from the
Mediterranean region.
Founders could allocate 3 votes. Percentages indicate how
DATASET: NORDICS & BALTICSMediterranean region.
Source: Founders could allocate 3 votes. Percentages indicate how Source:
DATASET: CENTRAL & EASTERN EUROPE
many founders would like to startup in each respective city. many founders would like to startup in each respective city.
Top 5 hubs where founders would start a Stockholm

Top 5 hubs where founders would start a Berlin
42 54
company tomorrow, by region company tomorrow, by region
DATAS E T: N O RD ICS & BALT ICS DATAS E T : C EN T R AL EAST ER N EU R O P E
Berlin 40 London 42
LE G E ND L E G E ND
London 32 Amsterdam 14
Copenhagen 26 Lisbon 13
Amsterdam 15 Warsaw 12
Although London ranked as the most cited destination 0 5 city amongst

10 all respondents,
15Although20 London
25 there35are
ranked
30 as clear
the differences
40 most in 0
45 cited destination city10 amongst20all respondents,
30 there
40 are clear
50 differences
60 in
the top city preferences when analysing the results based on the sub-region the top of preferences
city origin of survey
when participants.
analysing the On results based on the sub-region of origin of survey participants. On
that
Note:
basis, it's apparent that London is only the number city for respondents that
Note:
basis, from UK & Ireland
it's apparent thatand Londonfrom isthe
only the number city for respondents from UK & Ireland and from the
Mediterranean region.
Founders could allocate 3 votes. Percentages indicate how
DATASET: MEDITERRANEAN Mediterranean region.
Source: Founders could allocate 3 votes. Percentages indicate how Source:
DATASET: UK & IRELAND
Top 5 hubs where founders would start a London

Top 5 hubs where founders would start a London
47 71
company tomorrow, by region company tomorrow, by region
DATAS E T: ME DIT E R R ANE A N DATAS E T : U K & I R EL A ND
Barcelona 44 Berlin 34
LE G E ND L E G E ND
Berlin 28 Paris 28
Milan 20 Barcelona 21
Lisbon 15 Dublin 16
0 10 20 30 40 50 0 10 20 30 40 50 60 70 80
Note: Note:
Founders could allocate 3 votes. Percentages indicate how Source: Founders could allocate 3 votes. Percentages indicate how Source:

“ I only invest in B2B software companies, and those can really come
from anywhere. That has also been proven in Europe with category
defining companies emerging from beyond the tier-1/2 cities. You
You need to look beyond need to look beyond the established startup hubs to find the really
interesting opportunities.”
the established startup
hubs to find the really Teddie Wardi
Insight Venture Partners
interesting opportunities.
Office space is one of the largest line items on the P&L for most tech companies,
and picking the right office environment and location is an important decision for
founder to get right.O For
ce founders
space is one of the
that arelargest line items
prepared on thethere
to move, P&L for
ismost
moretech companies and picking the right o ce
choice
environment and location is an important decision to get right for founders. For founders that are prepared to
than ever. The wide variation of the cost of office space in different cities is just
move, there is more choice than ever. The wide variation of the cost of o ce space in different cities is just one
one factor to consider, though
factor not necessarily
to consider, a primary
though not necessarily one. one.
a primary
London (Central), United Kingdom $1,496

Cost of prime rent ($ per square metre per Paris Ile-de-France, France $995
year) for o ce space by city, 2Q 2018 Stockholm, Sweden $852
Dublin, Ireland $819
L E G E ND Zurich, Switzerland $757
Prime Rent ($ per square metre per year) Moscow, Russian Federation $729
Luxembourg City, Luxembourg $702
Milan, Italy $656
Oslo, Norway $640
Helsinki, Finland $562
Istanbul, Turkey $505
Amsterdam, Netherlands $480
Madrid, Spain $453
Berlin, Germany $443
Brussels, Belgium $369
Vienna, Austria $358
Athens, Greece $351
Budapest, Hungary $323
Warsaw, Poland $323
Copenhagen, Denmark $299
Prague, Czech Republic $292
Lisbon, Portugal $288
Kiev, Ukraine $277
Bucharest, Romania $260
Bratislava, Slovakia $239
Belgrade, Serbia $232
Zagreb, Croatia $211
Sofia, Bulgaria $197
0 250 500 750 1,000 1,250 1,500

$ per square metre per year
Source:

There are huge potential cost benefits by placing offices in locations outside the primary
hub, though the differences vary by country. In the U.K. and France, founders choosing to
build outside of London and Paris stand to benefit from hugely reduced fees on the relative
cost of office space. In Germany, on the other hand, the difference in the costs of office
space outside Berlin is far less pronounced.
cost bene�ts byCost

locating o�ces
of prime rentin($
locations There
outside
per square arethe
metre huge
perprimary
potential
year) hub,
for cost
though
office bene�ts
spacethe by locating o�ces in locations outside the primary hub, though the
try. In the UK andbyParis, founders
city in selected choosing todifferences
countries, build outside
2Q 2018 vary
of by
London
country.
andInParis
the UK
stand
andtoParis, founders choosing to build outside of London and Paris stand to
ced fees on the relative cost of o�ce space.bene�t In Germany,
from on
hugely
the other
reduced
hand,
feesthe
on the relative cost of o�ce space. In Germany, on the other hand, the
o�ce space outside Berlin
DATASET: is far less pronounced.
FRANCE difference in the costs of o�ce space outside Berlin
DATASET: is far less pronounced.
GERMANY
e metre per Paris (Ile-de-France) Cost of prime rent ($ per square metre per$995 Frankfurt am Main $562
selected year) for o ce space by city in selected
Marseille countries,
$375 2Q 2018
Munich $520
DATASE T : G E RM A N Y
Lyon $351
L E G E ND Berlin $443
year) Nice $269 Prime Rent ($ per square metre per year)
Hamburg $379
Toulouse $258
Dusseldorf $379
Lille $258
Bordeaux $234 Cologne $309
0 200 400 600 800 1,000 0 100 200 300 400

all cost
cost bene�ts
bene�ts by
by locating
locating o�ces
o�ces in in locations
locationsThere
outside
outside
Prime
arethe huge
the
Rent ($ per
primary
potential
primary
square
hub,
hub,cost
metre per year)
though
bene�ts
though the
the by locating o�ces in locationsPrime outside the primary hub,500
Rent ($ per square metre per year)
600
though the
ntry.
ntry. In
In the
the UK
UK and
and Paris,
Paris, founders
founders choosing
choosing to differences
to build
build outside
outside vary of
ofbyLondon
country.
London and
andInParis
the UK
Paris stand
andto
stand Paris, founders choosing to build outside of London and Paris stand to
to
uced
uced fees
fees on
on the
the relative
relative cost
cost of
of o�ce
o�ce space.
space.bene�t
In
In Germany,
Germany,from hugely
on
on the
the other
reduced
other hand,
fees
hand, theon the relative cost of o�ce space. In Germany, on the other hand, the
the
of
of o�ce
o�ce space
space outside
Source:
DATASET:
outside Berlin
SPAIN is
Berlin is far
far less
less pronounced.
difference in the costs of o�ce space outside
pronounced.
Source: Berlin
DATASET: isKINGDOM
UNITED far less pronounced.
are metre per Madrid Cost of prime rent ($ per square metre per$453 London (Central) $1,496
are metre per London (Central) $1,496
n selected year) for o ce space by city in selected
in selected
countries, 2Q 2018
Barcelona $344 Manchester $513
Manchester $513
DATASE T : U N I T ED K I N G DO M
Malaga L E$169
G E ND Edinburgh $485
Edinburgh $485
er year) Prime Rent ($ per square metre per year)
er year)
Zaragoza $158 Birmingham $470
Birmingham $470
There are huge potential cost bene�ts by locating o�ces in locations outside the primary hub, tho
Valencia
Glasgow
$152
$463 differences vary by country.
Glasgow
In the UK and Paris,
$463
founders choosing to build outside of London and
bene�t from hugely reduced fees on the relative cost of o�ce space. In Germany, on the other han
Palma de Mallorca
Bristol
$140
$463 difference in the costs Bristol
of o�ce space outside $463
Berlin is far less pronounced.
0 100 200 300 400 500 0 250 500 750 1,000 1,250 1,500
0 250 500 750 1,000 1,250 1,500
Prime Rent ($ per square metre per year) Prime Rent ($ per square metre per year)
Prime Rent ($ per square metre per year) Cost of prime rent ($ per square metre per London (Central)
year) for o ce space by city in selected
countries, 2Q 2018
Source: Source: Manchester $513
Source:
DATAS E T : U N I T E D K I N G DO M
L E G E ND Edinburgh $485
Prime Rent ($ per square metre per year)
Birmingham $470
Europe’s leading hubs have many advantages, but OFFICE SPACE COSTS BY CITY
Glasgow $463
they’re also far more expensive to build from
2.7x
Difference
Bristol in cost per square$463
metre of
prime office space in Paris (Ile-de-Fance)
compared to0 in Marseille,
250
the500next most 750 1,000 1,250
Prime Rent ($ per square metre per year)
expensive French city
Source:

New Hubs - Where Next?
European tech has huge upside if it can unlock the potential of its latent talent pools. The
size of the developer pools in comparison to relative levels of historical capital invested
European
in them suggests that tech has
countries huge
such asupside
Italy, ifPoland
it can unlock the potential
or Spain of its
still have latent
large talent pools.
potential to The size of the developer
pools in comparison to relative level of historical capital invested in them suggests that countries such as Italy,
punch at a greater weight in the European tech ecosystem.
Poland or Spain still have large potential to punch at a greater weight in the European tech ecosystem.
Scatter of countries based on size of 1,000,000

professional developer talent pool and
capital invested ($M) (2013 to 9M 2018) Germany United Kingdom
750,000
France
500,000
Russia
Italy Spain
250,000
Ukraine Sweden
Romania
0
-5,000 0 5,000 10,000 15,000 20,000 25,000 30,000
Note:
Chart only includes countries with greater than 50,000 Source:
professional developers in 2018.
There are giant talent hubs that offer huge potential if the local pool can be mobilised
in the same way as in cities such as Berlin, Helsinki and Stockholm. Examples of these
large talent clustersThere
thatare giant
have talent
not yethubs that offer
produced huge potential
companies if the
that havelocal pool can
raised be mobilised
large sums ofin the same way that has
been in achieved in cities such as Berlin, Helsinki and Stockholm. Examples of these large talent clusters that have
capital investment not
include Cologne, Kiev and Vienna.
yet produced companies that have raised large sums of capital investment include Cologne, Kiev and Vienna.
400,000
Scatter of cities based on size of London
professional developer talent pool and
capital invested ($M) (2013 to 9M 2018)
300,000
Paris
Amsterdam
200,000
Cologne
Frankfurt am Main
Berlin
100,000 Brussels
Stockholm
Budapest
0
-5,000 0 5,000 10,000 15,000 20,000 25,000
Note:
Investment amounts are based on capital invested in the city in Source:
aggregate between 2012 and September 2018.

This emergence of growing and more engaged tech communities in new parts of
This emergence of growing and more engaged tech communities in new parts of the region is re ected too in the
the region is reflected too in the list of Top 10 fastest-growing tech hubs, ranked by
list of Top 10 fastest-growing tech hubs, ranked by year-on-year growth in active members of tech-related Meetup
year-on-year growth in
groups.active members of tech-related Meetup groups.
St. Petersburg, Russia 93%

Top 10 fastest growing hubs in Europe by YoY
growth rate of active members Sofia, Bulgaria 81%
Porto, Portugal 72%

L E GE ND
YoY member growth 2017-2018 (%) Lviv, Ukraine 68%
Bern, Switzerland 67%
Cardiff, United Kingdom 65%
Vilnius, Lithuania 65%
Wroclaw, Poland 63%
Newcastle, United Kingdom 60%
Stuttgart, Germany 59%
0 20 40 60 80 100
% YoY growth
Note:
2018 annualised based on active members to end of September Source:
2018
As new hubs continue to proliferate across Europe, the region's leading investors are increasingly backing
founders from these locations. In the past 12 months, founders building companies in as diverse a set of cities as
Lille, St Gallen and Warsaw have all raised funding from leading European VCs.
As new hubs continue to proliferate across Europe, Selected investments in new tech hubs
the region’s leading investors are increasingly Country Company Lead Investor Round Type Round Size ($M)
Selected investments in new tech hubs
backing founders from these locations. In the past 12 Brussels Belgium Cowboy Tiger Global Series A 12
months, founders building companies in as diverse Edinburgh UK Care Sourcer ADV Series A 11
a set of cities as Lille, St Gallen and Warsaw have all Gothenburg Sweden NA-KD Partech Series B 45
raised funding from leading European VCs. Lille France OpenIO Partech Series A 5
Milan Italy Freeda Media Alven Capital Series A 10
Oxford UK Ultromics OSI Series A 13
Reykjavik Iceland Teatime Games Index, Atomico Series A 7
St Gallen Switzerland Frontify Blossom Capital Series A 8
St Paul's Bay Malta F RVR Accel Seed 3
Tallinn Estonia Veriff Mosaic Series A 8
Warsaw Poland Packhelp SpeedInvest Seed 2
Source:
We are probably in one of the most difficult positions –

trying to produce the world’s fastest electric sportscars
out of a country that never had a car industry and has
zero market for our products.
“ I believe that for software startups, location is not that important.

It is harder for hardware startups, especially those whose products
are linked to the country’s prestige. We are probably in one of the
most difficult positions – trying to produce the world’s fastest electric
sportscars out of a country that never had a car industry and has zero
market for our products. Despite everything, we have managed to
attract funding, the right customers (all major European carmakers)
Mate Rimac and talent. It is possible, but probably much much harder than doing it
in the “right place.”
Rimac Automobili

There is a wide variation in the average software engineer salary both across countries
and even within them. According to Glassdoor, software engineers have the highest
Therewhich
median salary in Berlin, is a wide variationthe
reflects in the average
fact software
that Berlin hasengineer salary both acrosslow
a disproportionately countries and even within them.
According to Glassdoor, software engineers have the highest median salary in Berlin, which re ects the fact that it
density of local professional developers compared to other cities, but a large number
has a disproportionately low density of local professional developers compared to other cities, but a large number
of well-capitalised of
VC-backed companies
well-capitalised VC-backed that are chasing
companies talent.
that are chasing talent.
Average software engineer salary per year by Berlin $58,750

city
London $54,000
LEG END
Annual salary ($) Amsterdam $52,250
Vienna $51,500
Paris $49,750
Cambridge $46,000
Helsinki $44,500
Barcelona $40,250
Madrid $36,750
Milan $36,750
Lisbon $31,500
Rome $29,750
Prague $25,000
Warsaw $24,250
Note:
Rounded to nearest $250. Data pulled from Glassdoor on 24 Source: Glassdoor
October 2018. Glassdoor
The huge spread in the cost of software SOFTWARE ENGINEER SALARIES BY CITY
engineering talent across European cities is driving
2.4x
talent mobility and higher distribution of company Difference in the median base salary of
building. a software engineer in Berlin compared
to Warsaw
Glassdoor

Photo: Damon Beckford
Research and
Development
A Look Around the Corner Europe is a research powerhouse. Its prolific research
community exceeds that of the U.S. and China, and is
flexing its muscle in deep tech. This research prowess
can be a strong differentiator for European tech as
science and tech further converge. The key to making
that happen: knowledge transfer and better links
between STEM and startups.
ARTICLES
06.1 Mobilising Europe’s R&D talent pool
06.2 Deepening Europe’s frontier tech credentials

Mobilising Europe’s R&D talent
pool
If talent represents the foundations of the European tech ecosystem, its academic institutions are the bedrock.
Europe is home to 14 of the Top 50 computer science universities in the world, including 5 of the Top 10. Europe is,
If talent represents the foundations of the European Europe’s universities among global top 50 in
in short, a factory for producing world-class computer science talent.
computer science and their global rank
tech ecosystem, its academic institutions are
the bedrock. Europe is home to 14 of the Top 50
Europe's universities among global top 50 in 3
University
University of Oxford
Country
United Kingdom
computer science universities in the
computer world,
science and their including
global rank
4 ETH Zurich Switzerland
5 of the Top 10. Europe is, in short, a factory for 5 University of Cambridge United Kingdom
producing world-class computer science talent. 9 Imperial College London United Kingdom
10 EPF Switzerland
14 University of Edinburgh United Kingdom
16 Technical University of Munich Germany
18 UCL United Kingdom
36 Karlsruhe Institute of Technology Germany
37 RWTH Aachen University Germany
=42 Delft University of Technology Netherlands
=42 Technical Univers ity of Berlin Germany
47 LMU Munich Germany
50 KU Leuven Belgium
Note:
4 of the world's top 10 and 31 of the world's topTimes
100Higher Education World University Rankings
Compiled by the Times Higher Education Supplement and
Source:
universities in engineering and technology are2018
gathered by CERN.
located in
Looking beyond just computer
Europescience, Europe
Europe’s universities among global top 100 in
engineering and technology and their global rank
is home to 31 of the world’s top 100 universities in
University Country
engineering and technology. These
Europe's 31 universities
universities among global top 100 in 3 University of Oxford United Kingdom
are distributed across 11 different
engineeringcountries
rank
and
and technology and 29
their global
5 University of Cambridge United Kingdom
different cities and reflect the fact that European 9 ETH Zurich Switzerland
STEM talent is inherently spread across the region 10 Imperial College London United Kingdom
driven by the strong academic institutions that 14 École Polytechnique Fédérale de Lausanne Switzerland
exist in all corners of the region. There are, in short, 18 Delft University of Technology Netherlands
clusters of world-class talent potential in every 21 Technical University of Munich Germany
corner of Europe. 24 RWTH Aachen University Germany
36 UCL United Kingdom
37 KU Leuven Belgium
38 KTH Royal Institute of Technology Sweden
43 Tec hnical University of Berlin Germany
45 University of Edinburgh United Kingdom
46 University of Manchester United Kingdom
51 Eindhoven University of Technology Netherlands
55 Karlsruhe Institute of Technology Germany
58 Technical University of Denmark Denmark
75 University of Bristol United Kingdom
77 University of Stuttgart Germany
79 Chalmers University of Technology Sweden
82 École Polytechnique France
84 University of She eld United Kingdom
85 Aalborg University Denmark
86 Norwegian University of Science and Technolog y Norway
87 University of Southampton United Kingdom
88 University of Freiburg Germany
90 Polytechnic University of Milan Italy
94 TU Dresden Germany
95 University of Erlangen-Nuremberg Germany
96 Lund University Sweden
99 Aalto University Finland
Note:
'Rank' refers to position in global list of top 100 institutions for
Times
TimesHigher
Higher Education
Education World University Rankings
Source: World University Rankings 2018
engineering and technology quali cations. Compiled by the 2018
Times Higher Education Supplement and gathered by CERN.

“ For the past decade or so, European VCs have been cheerfully ignoring the academic and
scientific communities. That’s because they have been making great returns from internet
and mobile platforms, and have developed superb domain experience and expertise in these
For the past decade or areas. Besides, making money out of science is very hard, and there are significant barriers
to entry. But, to quote Bob Dylan, the times they are a changin’... First, the “easy” money
so, European VCs have from Web 2.0 is less obvious as this platform has reached maturity. Second, the many great
been cheerfully ignoring challenges facing the world will require deep tech (or rather deep science) solutions. Third, the
convergence of tech, AI, Genomics, etc. creating new “internet” type opportunities will create
the academic and the next Googles and Amazons. Fourth, the desire for impact. A new generation of scientists,
VCs, philanthropists, and entrepreneurs want to make the world a better place, not just get
scientific communities... rich. They aren’t interested in the next app for drone delivered pizzas. Fifth, universities are
But, to quote Bob Dylan, under pressure to engage with VCs and to enable the channelling of their research into the
outside world. And finally, VCs can bring money, but more importantly their talent, to combine
the times they are a with deep tech/science so this channel becomes REAL”
changin’...
Dave Norwood
Oxford Sciences Innovation
The EU has a large research community that exceeds its

counterparts in the US and China in size
As technology and, specifically, software continue # of researchers in EU-28, China and the US
their relentless march into# every part of the economy,

of researchers in EU-28, China and the US
it will become critical for Europe to unlock the potential EU-28 1,764,084
of its large research community.
LE G END It will need to mobilise
to help European tech companies succeed in new
# of researchers in 2014
frontiers where tech meets science. The research

community is a huge potential asset, exceeding both China 1,524,280
the US and China today in total numbers.
USA 1,351,903
0 250,000 500,000 750,000 1,000,000 1,250,000 1,500,000 1,750,000

# of researchers
Note:
A researcher is a professional in conception or creation of Source: Eurostat
knowledge, products, processes, methods, systems & Eurostat
management of these projects. # of researchers in full-time
There are more than 1.8 million scientists and engineers across Europe, specialising in every eld. Germany and
equivalent (FTE). Data sourced from Eurostat and gathered by
CERN. Data for 2014.
the UK are the two largest homes to the European research community by far, with more than 300,000 in each
There are more than
There 1.8 million
are more
respective scientists
than
country. 1.8 and
Italy,engineers
million
France, Poland andacross
scientists allEurope,
also havespecialising
and engineers
Spain in specialising
across communities
sizeable Europe, of scientistsin every
and eld. German
engineers.
every field. Germany
the UK and
areare
There
themore
UK are
twothan the
largest two
1.8 million
largest
homes homes
to the
scientists
to the European
European
and research
engineers across
research
community
Europe, specialisingbyinfar,
everywith
eld.more than
Germany and300,000 in e
community byrespective
far, with
the UKmore
are than
country.
the two 300,000
France,
largest in
homeseach
Italy,to respective
Poland
the and
European country.
Spain
researchall France,
also have
community Italy,
by Poland
sizeable
far, with communities
more than 300,000of scientists
in each and en
# of scientists and engineers by country
and Spain all also have sizeable
respective communities
country. France, Italy, ofPoland
scientists andall
and Spain engineers.
also have sizeable communities of scientists and engineers.
LEG END

upto 3,500,000
2,500,000 to 3,000,000
2,000,000 to 2,500,000
L E GE ND
LEG END
1,500,000 to 2,000,000
upto 3,500,000
upto 3,500,000
1,000,000 to 1,500,000
2,500,000 to 3,000,000
2,500,000 to 3,000,000
500,000 to 1,000,000
2,000,000 to 2,500,000
2,000,000
uptoto 2,500,000
500,000
1,500,000 to 2,000,000
1,500,000 to 2,000,000
1,000,000 to 1,500,000
1,000,000 to 1,500,000
500,000 to 1,000,000
upto 500,000
500,000 to 1,000,000
upto 500,000
Note:
Scientists and engineers refer to persons with scienti c or Source: Eurostat
technological training who are engaged in professional work on
science and technology. Data is sourced from Eurostat and
gathered by CERN. Latest data is 2017.
Note:
gathered by CERN. Latest data is 2017.
Note:
Europe has some of the world’s leading

research centres, and the talent coming
out of these centres has increasing
entrepreneurial ambitions. The trend is
clearly upward.
“ Europe is in the early days of tapping its R&D talent pool. There
are still barriers here with regards to tech transfer and IP, access
to funding to scale capital-intensive, research-based businesses,
and to some degree, a perception barrier around the feasibility
of ‘commercially-driven,’ non-academic careers. However, this is
changing. The good news is that Europe has some of the world’s
leading research centers, and the talent coming out of these
Irina Haivas centers has increasing entrepreneurial ambitions. The trend is
Atomico clearly upward.”
Looking at the clusters of scientists and engineers relative to the overall population size of different coun
highest density
Looking communities can be found
at the clusters of scientists in the relative
and engineers Nordics and
to the Switzerland.
overall population size of different countries, the
The Nordics have the highest
highest
Looking density
density
at the ofofresearchers
communities
clusters can be and
scientists per
found in capita.
the Nordics
engineers and
relative to Switzerland.
the overall population size of different countries, the
highest density communities can be found in the Nordics and Switzerland.
Share of scientists and engineers
Share of scientists in total
and engineers in total
population population
Share of scientists and engineers in total
population
LEG END
LEGE ND upto 4.50
LEG END
upto 4.50 3.50 to 4.00
upto 4.50
3.50 to 4.00 3.00 to 3.50
3.50 to 4.00
2.50 to 3.00
3.00 to 3.50 3.00 to 3.50
2.00 to 2.50
2.50 to 3.00
2.50 to 3.00 1.50 to 2.00
2.00 to 2.50
2.00 to 2.50 1.00 to 1.50
1.50 to 2.00
0.50 to 1.00
1.50 to 2.00 1.00 to 1.50
upto 0.50
0.50 to 1.00
1.00 to 1.50
upto 0.50
0.50 to 1.00
upto 0.50
Note: Eurostat
Scientists and engineers refer to persons with scienti c or
Note:
science and
Scientists technology.
and engineersData
referistosourced
personsfrom
withEurostat
scienti cand
or
gathered by CERN.
technological Latest
training whodata is 2017. in professional work on
are engaged
gathered by CERN. Latest data is 2017. Source: Eurostat
Source: Eurostat
Note:
Source: Eurostat
The openness and the sharing of
Scientists and engineers refer to persons with scienti c or
“ CERN’s natural environment is about collaboration and openness.
By pooling together resources, brainpower and complementary
information is something, I presume,
gathered by CERN. Latest data is 2017. expertise, CERN creates unique value that opens new doors for all.
The result is more than the sum of what its Member States could
tech companies will have to do more create nationally, and so the benefit is more than a financial one. For
this to work, CERN collaborates with a large number of partners and I
of in the future and hopefully they can believe this is something start-ups can learn from.
learn from CERN in that regard.
CERN has developed a collaborative model of working which is very
special and its governance has proven it is capable of extraordinary
advances in science and technology since its creation in 1954. The
Large Hadron Collider and the discovery of the Higgs boson are
Giovanni Anelli concrete examples that highlight the success of this international
European Organization for Nuclear collaboration. The openness and the sharing of information is
Research (CERN) something, I presume, tech companies will have to do more of in the
future and hopefully they can learn from CERN in that regard.”

The European tech ecosystem is built on top EUROPEAN RESEARCHER TALENT

of a large pool of researcher talent that it has
2m
largely untapped. Total researchers in
Europe
Eurostat
Europe’s research community is an ideas and knowledge factory and produces

research at a level that is globally competitive and on par with the US.
Europe publishes almost as many research papers as the US
# of publications in Europe, China and the US

US 19,579
L EG E ND
Count of publications in 2017
Europe 18,070
China 9,089
0 2,500 5,000 7,500 10,000 12,500 15,000 17,500 20,000 22,500

# of publications (fractional count)
Note:
'Count' refers to a fractional count that takes into account the
percentage of authors from that institution/country and the
number of a liated institutions per paper. Data sourced via
Nature Index and gathered by CERN.
But it is not just quantity, but also the quality of research that originates
from Europe. The European research community leads the world by share of
publications in the top 10% most cited, though China is gaining ground at an
impressive rate.
The European Union produces the most publications in the
top 10% ranked by citings, but China is catching up fast
Share of publications in the top 10% most

43%
cited publications
US
L EG E ND 30%
Share in 2000 (%)

Share in 2014 (%)
1%
China
12%
33%
EU-28
32%
Note:
A fractional count takes into account the percentage of
authors from that institution/country and the number of
a liated institutions per paper. Data sourced via European
Commission Directorate-General for Research and Innovation
and gathered by CERN.

For its size,

ForSwitzerland is the
its size, Switzerland publication
is the powerhouse
publication powerhouse of Europe,
of Europe, driven
driven by by the
the strength of strength of its world-leadi
its world-leading
research institutions
For its size, Switzerland
research itsis the
institutions
For size, suchsuch
publication
Switzerland as
asis ETH
theETH Zurich and
powerhouse
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publication ofEPF
and EPFLausanne.
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Lausanne.
powerhouse bydriven
Europe, the strength
by the strength of its world-leading
of its world-leadingresearch
research institutions
institutions such assuch
ETHas ETHand
Zurich Zurich and EPF Lausanne.
EPF Lausanne.
# of publications per country (fractional
count)
# of publications per country
# of publications (fractional
per country (fractional
count) count)
LEG END
upto 4,500
LEG END
L EG END 3,500 to 4,000
upto 4,500
3,000 to 3,500
upto 4,500 3,500 to 4,000
2,500 to 3,000
3,500 to 4,0003,000 to 3,500
2,000 to 2,500
2,500 to 3,000
3,000 to 3,500 1,500 to 2,000
2,000 to 2,500
2,500 to 3,0001,000 to 1,500
1,500 to 2,000
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2,000 to 2,500 1,000 to 1,500
upto 500
500 to 1,000
1,500 to 2,000
upto 500
1,000 to 1,500
500 to 1,000
upto 500
Eurostat
Note:
A fractional count that takes into account the percentage of Source: Eurostat
Note:
a liated institutions
A fractional count thatper paper.
takes intoData is forthe
account 2017. Data sourced
percentage of Source: Eurostat
via Nature
authors fromIndex
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a liated institutions per paper. Data is for 2017. Data sourced
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Eventhe
Even though though
largestthe largestincountries
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Source: of countries strongly
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Eurostat to European
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Share of publications
Share of publications in the topin the top most
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Sharepublications
cited of publications in the top 10% most
cited publications
cited publications
LEG END
LEG END
upto 15.0
L EG END upto 15.0
13.0 to 14.0
upto 15.0 13.0 to 14.0
12.0 to 13.0
12.0 to 13.0
13.0 to 14.0 11.0 to 12.0
11.0 to 12.0
10.0 to 11.0
12.0 to 13.0 10.0 to 11.0
9.0 to 10.0
11.0 to 12.0 9.0 to 10.0
8.0 to 9.0
8.0 to 9.0
10.0 to 11.0 6.0 to 8.0
6.0 to 8.0
4.0 to 6.0
9.0 to 10.0 4.0 to 6.0
3.0 to 4.0
8.0 to 9.0 3.0 to 4.0
upto 3.0
upto 3.0
6.0 to 8.0
4.0 to 6.0
3.0 to 4.0 Eurostat
upto 3.0 Note:

A fractional count takes into account the percentage of
Note:
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A fromcount
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A fractional ecosystem
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takes into account underpinned
percentage of by a WORLD-CLASS TECHNICAL UNIVERSITIES
supply of world-class academic talent
31%
a liated institutions per paper. Data is for 2014, the most
recent available. Data sourced via European Commission RIO of the world’s Top 100 engineering
and gathered by CERN. and technology universities globally
are European.
Eurostat

Deepening Europe’s frontier
tech credentials
France, Germany and the UK are the largest destinations for capital investments into European tech companies,
Europe has experienced rapid
but there are growth in sums being invested into deep tech companies across the region, including into
meaningful
investments into deep tech.such as Sweden and Switzerland.
countries
Capital invested ($M) in European deep tech DATASET: TOP 10 COUNTIRES

companies by country
United Kingdom 4,182 1,752
France 1,958 912

L E G END
Germany 1,372 351
2013-2017
Switzerland 604 618
2018
Sweden 918 145
Netherlands 611 93
Spain 338
Finland 313
Belgium 294
Austria 288
0 1,000 2,000 3,000 4,000 5,000 6,000

France,
France, Germany
Germany andand the
the UK
UK are
are the
the largest
largest destinations
destinations for
for capital
capital investments
investments into
into European
European tech
tech companies,
companies,
but
but there
there are
are meaningful
meaningful sums
sums being
being invested
invested into
into deep
deep tech
tech companies
companies across
across thethe region,
region, including
including into
into
countries
countries such
such as
as Sweden
Sweden and
and Switzerland.
Switzerland.
DATASET: COUNTRIES 11-20
Source:
Ireland
Ireland 236
236 39
39
Capital
Capitalinvested
invested($M)
($M)in
inEuropean
Europeandeep
deeptech
tech
companies
companiesby
Note:
bycountry
country Italy
Italy 192
192 83
83
2018
DATAS
DATASbased
EETTon 9 months
:: CO
CO NTRRIto
UUNT IEESeptember
SS 111-
1-20 2018 Rand
20 AND
AND projection
REEST
ST OOFF for Norway
Norway 170
170 40
40
Q4
EU2018
EU RROOPPbased
EE on Q3 2018.
Cyprus
Cyprus 56
56 151
151
LLEG
EGEEND
ND
Russia
Russia 114
114 44
44
2013-2017
2013-2017
Denmark
Denmark 71
71 87
87
2018
2018
Portugal
Portugal 57
57 41
41
Poland
Poland 62
62 00
Romania
Romania 60
60 00
Estonia
Estonia 50
50 00
Rest
Restof
ofEurope
Europe 149
149 44
00 50
50 100
100 150
150 200
200 250
250 300
300
Capital
Capitalinvested
invested($M)
($M)
Note:
Note:
2018
2018based
basedon
on99months
monthstotoSeptember
September2018
2018and
andprojection
projectionfor
for Source:
Source:
Q4
Q42018
2018based
basedon
onQ3
Q32018.
2018.
The level of capital invested into European deep tech companies exceeded $5B again in 2018 across more than 800
deals. This investment encompasses both companies that are working on solving core technology problems, as
well as those companies that are applying deep technology to seek to transform a range of target industries.
Capital invested ($B) in and # of deals closed 5.0 1,075.0

4.6
by European deep tech companies
4.3
1,000.0
4.0
L EG E ND 857.0
Capital invested ($B) 784.0

Capital invested ($B)
3.2
800.0
# of deals 3.0
# of deals
615.0 2.4
600.0
2.0
1.6
1.0 400.0
0.7
0.0 200.0
2013 2014 2015 2016 2017 2018
Note:
2018 based on 9M to September 2018 and projection for Q4 2018 Source:
based on Q3 2018.

06.2 Deepening Europe’s frontier tech credentials
Many interesting deep tech companies have raised funding Manybyinteresting

Many interesting deep this
tech companies European deep tech companies have raised f
in Europe have raised
Selected investment rounds raised
year deep tech companies in 2018 this year in Europe
funding this year in Europe.
Industry Location Last round Round size ($M)
Selected investment rounds raised by UiPath Enterprise software Selected
Romaniainvestment rounds
Series C raised
225 by
UiPath Ent
European deep tech companies in 2018 European deep tech companies in 2018
Ledger FinTech France Series B 69
Ledger Fin
Celonis Enterprise software Germany Series B 50
Celonis Ent
Darktrace Legal security United Kingdom Series E 50
Darktrace Leg
Meero Media France Series B 45
Meero Med
Iceye Media, Transporation Finland Series B 34
Iceye Med
Navya Robotics, Transportation France Series C 34
Navya Rob
Varjo Media Finland Series B 31
Varjo Med
Medopad Health, Enterprise software United Kingdom Series A 28
Medopad Hea
Tractable FinTech United Kingdom Series B 25
Tractable Fin
Note:
Note:
Some of the numbers converted from EUR to USD with an FX Source: Some of the numbers converted from EUR to USD with an FX Source:
rate of 1.13, the rate on 14 November 2018.
rate of 1.13, the rate on 14 November 2018.
“ Going forward, I can see more R&D based start-ups coming out
of European universities, building off multidisciplinary teams of
scientists and engineers and tackling some of the large challenges of
our century like sustainability and health. These businesses will likely
be global from day one. Europe will then need to make sure to keep
(and fund) this talent here, by creating the right incentives for the eco-
system and adapting to the different requirements these businesses
Irina Haivas have in terms of funding and milestone expectations, new business
Atomico models and talent.”
Arti cial Intelligence continues to dominate the deep tech Arti cial Intelligence continues to dominate the deep
landscape in terms of capital invested. landscape in terms of capital invested.
Artificial Intelligence continues to dominate the Capital invested ($M) by deep tech sub-category
Artificial Intelligence 234 582 1,086 1,382 2,306 1,965
deep tech landscape in terms
Capital of capital
invested ($M) by invested.
deep tech sub- Hardware 408 376 Capital invested ($M)
1,197 1,674 by deep943
tech sub- 1,282
Hardware
category Internet of Things 62 223 555 837 677 684
category Internet of Things
Blockchain 45 133 66 171 223 651
Blockchain
3D 100 111 282 325 264 610
Big data 146 317 455 358 516 452 3D
Robotics 10 35 94 187 243 368 Big data
Search 96 441 458 575 328 299 Robotics
Virtual reality 7 32 160 304 652 244 Search
Computer vision 23 3 106 115 107 237 Virtual reality
Developer tools 78 156 97 142 668 205 Computer vision
Semiconductors 154 78 162 159 159 183 Developer tools
Nanotech 23 13 101 182 49 145 Semiconductors
Predictive analytics 16 353 274 273 156 120 Nanotech
Drones 7 3 70 75 29 112 Predictive analytics
Deep learning 19 31 89 63 196 71 Drones
Speech & Hearing 23 71 2 37 35 14
Deep learning
Radar 9 21 5 19 13 0
Speech & Hearing
2013 2014 2015 2016 2017 2018 Radar
Note:
Hardware includes hardware manufacturing. 2018 based on 9
Source:
months to September 2018 and projection for Q4 2018 based on Note:
Q3 2018. Hardware includes hardware manufacturing. 2018 based on 9
Source:
months to September 2018 and projection for Q4 2018 based on
Q3 2018.
Throughout history, Europe’s been known for its innovations and even
today, top research projects are led by European teams, so let’s make
sure this remains the case in the coming years.
“ Europe is home to the largest share of top 100 AI research institutions
globally in addition to being home to half of the top computer
science institutions. Throughout history, Europe’s been known for
its innovations and even today, top research projects are led by
European teams, so let’s make sure this remains the case in the
coming years.”
Rasmus Ekholhm
Slush

Regulation
Bridging Tech & Policy The tech and policy worlds are moving closer together
as they seek to bridge any differences and avoid talking
past each other. Founder opinions are balanced on GDPR
and the general direction of tech policy in the region.
Data privacy and content copyright continue to dominate
policy discussion, and regulators are overlooking new key
technology fields.
ARTICLES
07.1 Embracing Regulation
07.2 Evolving Tech Policy in Europe
07.3 What Founders Want

Embracing Regulation
There is clear evidence of a strong desire from within Europe to build bridges between the
There is,
tech and policy spheres. A however,
majorityclear evidence ofinvestors
of founders, a strong desire
andfrom within Europe
policymakers to build
agree bridges between the tech and
that
policy spheres. A majority of founders, investors and policymakers agree that there should be stronger ties
there should be stronger
between ties between
European techEuropean tech startups/scaleups
startups/scapeups and governments and governments.
European tech startups and scale-ups need

stronger ties with governments Founder or startup/scale-up employee
LEG END
Agree
Venture capitalist
Disagree
Policymaker or employee in the public

sector
0 20 40 60 80 100
% of respondents
Source:

Photo: Sami Heiskanen
Only 24% of total respondents believe that regulation has had a negative impact on the European tech industry in
the past 12 months. This varies, however, by occupation and region. Respondents from France are most positive
on the impact of regulation, while Founders skew slightly more negative than positive, but only by a fraction.
Only 24% of total respondents believe that regulation has had a negative impact on the
Founder or
European tech industry in the past 12 months. This startup/scale-up
varies,
employee
however, by occupation and
Only 24% of total respondents believe that regulation has had a negative impact on the European tech industry in
region. Respondents from France are most positive on the impact of regulation, while
the
Onlypast
24%12of
months. This varies, however,
total respondents by occupation
believe that regulation has andhad
region. Respondents
a negative impactfrom France
on the are most
European techpositive
industry in
founders skew slightly
on
thethe
more
impact
past
negative
12 months.
thanwhile
of regulation, positive,
This varies, however,
but
Founders by
only
skew by a fraction.
slightly
occupation
Investor more negative
and region. than positive,
Respondents but France
from only by are
a fraction.
most positive
on the impact of regulation, while Founders skew slightly more negative than positive, but only by a fraction.
Note:
Company
Whatsize: Founder respondents only.in Europe had on
impact has regulation DATASET:
Policymaker ALL
or RESPONDENTS
the European tech industry in the last 12 public sector employee
What impact has regulation in Europe had on
months? All respondents
the European tech industry in the last 12
months? All respondents
Other
L EG END 0 10 20 30 40 50 60 70 80 90 100
Positive % of respondents
L EGEND 0 10 20 30 40 50 60 70 80 90 100
Neutral 0 20 40 60 80 100
OnlyOnly
24%24% of total
of total
Positive
Negative
respondents
respondents believe
believe thatthat regulation
regulation hashas
hadhad a negative
a negative impact
impact
% on on thethe
of respondents European
European
% of respondents tech
tech industry
industry in in
the the
pastpast 12 months.
12 months.
Neutral
ThisThis varies,
varies, however,
however, by occupation
by occupation andand region.
region. Respondents
Respondents from from France
France areare most
most positive
positive
on Negative
on the the impact
impact of regulation,
of regulation, whilewhile Founders
Founders
Source: skew slightly more negative than positive, but only by a fraction.
skew slightly more negative than positive, but only by a fraction.
DATASET: SUBREGION
Source:
Source:
Central Europe & Baltics

Founder or
startup/scale-up
employee
DACH
Eastern Europe
Investor
France & Benelux

Note:
Company size: Founder respondents only.
Policymaker orNordics
public sector employee
Southern Europe
Other
UK & Ireland
0 20 40 60 80 100
Only
Only 24%24% of total
of total respondents
respondents believe
believe that
that regulation
0
regulation hashas
hadhad
20 a negative
a negative
40 impact on60
impact on
% ofthe the European
European
respondents
80 tech industry
tech industry in in
100
% of respondents
the past 12 months. This varies, however, by occupation and region. Respondents from France
the past 12 months. This varies, however, by occupation and region. Respondents from France are most positive are most positive
on on
thethe impact
of regulation, while
while Founders
Founders skewskew
Source:
slightly
slightly moremore negative
negative thanthan positive,
positive, butbut only
only by abyfraction.
a fraction.
DATASET: OCCUPATION
Source:
Founder or
Founder or
startup/scale-up
startup/scale-up
employee
employee

Investor
the European tech industry in the last 12 Investor
months?
Note:
Note:
DATAS E T:
Company S UFounder
size: B R EG Irespondents
ON S only.
Company size: Founder respondents only. Policymaker or
Policymaker or
LE GE ND public sector employee
Positive
Only
Only 24%24% of total
of total
Neutral respondents
respondents believe
believe that
that regulation
regulation hashas
hadhad a negative
a negative impact
impact on on
thethe European
European tech
tech industry
industry in in
thethe past 12 months. This varies, however, by Other
occupation andand region. Respondents from France
areare most positive
Other
past 12 months.
Negative This varies, however, by occupation region. Respondents from France most positive
on the
on the impact
of regulation, while
while Founders
Founders skew
skew slightly
slightly more
more negative
negative than
than positive,
positive, butbut only
only by by a fraction.
a fraction.
0 20 40 60 80 100
0 20 40 60 80 100
% of respondents
% of respondents
Founder or
startup/scale-up
DATASET: COMPANY SIZE BY # OF EMPLOYEES
employee
Source:
Source:
Investor<=10
Note:
Note:
Policymaker or
11-100
100+
Other
0 10 20 30 40 50 60 70 80 90 100
0 20 40 60 80 100
% of respondents
% of respondents
Source:
Source:

the European tech industry in the last 12
months?
DATAS E T: CO MPAN Y SIZ E BY # OF EMP LOYEE S
L E GE ND
Positive
Six months after the implementation of GDPR, Founders across Europe view data protection and privacy as the
Six months after the implementation
most challenging area of GDPR, Founders
of regulation across Europe view data
for their business.
Six months after the implementation of GDPR, Founders across Europe view data protection and privacy as the
protection and privacy as the most challenging area of regulation
most challenging area of regulation for their business.
for their business.
UK & Ireland 35 13 10 5 6 4 3 2 3 1 17
Which one area of regulation do you view as
most challenging for your company in 2018? Southern
UK & Europe
Ireland 25
35 17
13 15
10 11
5 9
6 2
4 3
3 8
2 2
3 13 6
17
Which one area of regulation do you view as
most challenging for your company in 2018?
L E G E ND SouthernNordics
Europe 22
25 16
17 10
15 11
11 8
9 5
2 4
3 4
8 3
2 2
3 15
6
upto 35 France & Benelux 21 16 14 9 7 3 3 3 4 6 13

L E G E ND Nordics 22 16 10 11 8 5 4 4 3 2 15
25 to 30
upto 35 Eastern Europe 25 7 12 13 16 7 4 3 3 1 7
France & Benelux 21 16 14 9 7 3 3 3 4 6 13
20 to 25
25 to 30 DACH 27 11 8 9 14
15 to 20 Eastern Europe 25 7 12 13 16 75 3
4 3
3 5
3 15 12
7
20 to 25
10 to 15 Central Europe & Baltics 16 14 9 14 15 6 7 4 2 6 7
15 to 20 DACH 27 11 8 9 14 5 3 3 5 5 12
5 to 10
10 to 15 Central Europe & Baltics 16 14 9 14 15 6 7 4 2 6 7
cy
ht
ts
s
en
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io
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o
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Note: Source:
Note: Source:
There’s a clear split in opinion within the industry on the question of whether
There's a clear split in opinion within the industry on the question of whether European regulators act with the
European regulators act with
interests
the startups
of tech
interests of tech
in mind.
startups
Founders,
in mind. Founders,
mostonnotably, are inclined to be European
sceptical of the motivations
There's a clear split in opinion within the industry the question of whether regulators act withofthe
most notably, are inclined
European
interests
There's
to be sceptical
regulators,
of tech
a clear startups
split
of the
especially
in mind.
in opinion within
motivations
those
thefrom
Founders,the
most
industry
ofthe
DACH European
region
onnotably, are inclined
question to be sceptical
of whether Europeanofregulators
the motivations ofthe
act with
regulators, especially those
European
interests fromstartups
tech theespecially
ofregulators, DACH region.
those
in mind. from the
Founders, DACH
most regionare inclined to be sceptical of the motivations of
notably,
European regulators, especially those from
Where relevant, do you believe that European
the DACH region
Central Europe & Baltics 47% 53%
regulators act with the interests of tech DATASET: SUBREGION
Where relevant, do you believe that European Central Europe & Baltics 47% 53%
startups inact
regulators mind?
with the interests of tech DACH 35% 65%
Where relevant, do you believe that European Central Europe & Baltics 47% 53%
startups
DATASE T:inSUB
mind?
RE GION DACH 35% 65%
regulators act with the interests of tech Eastern Europe 54% 46%
startups
DATASE
LEGE ND in
T: mind?
SUB RE GION DACH 35% 65%
Eastern Europe 54% 46%
YesND S UBR EGION
DATASET:
LEGE France & Benelux 53% 47%
No Eastern Europe 54% 46%
Yes France & Benelux 53% 47%
LEGEND
No Nordics 47% 53%
Yes France & Benelux 53% 47%
Nordics 47% 53%
No Southern Europe 45% 55%
Nordics 47% 53%
0 20 40 60 80 100
UK & Ireland 0 % of respondents

2043% 40 60 57% 80 100
% of respondents
There's a clear split in opinion within the industry on the 0question of 20
whether 40European regulators80act with the
60 100
interests of tech startups in mind. Founders,Source:most notably, are inclined to be sceptical of the motivations of
% of respondents
European regulators, especially those from the DACH region

Source:
DATASET: OCCUPATION
Source:
Where relevant, do you believe that European Academic/researcher 55% 45%

regulators act with the interests of tech
startups in mind? Angel investor 47% 53%
DATAS E T : O C C UPAT I O N
Employee at a private company that is
46% 54%
not a tech startup/scale-up
L E G E ND
Yes Employee at a private tech startup or
47% 53%
scale-up
No
Employee at a publicly listed non-tech
55% 45%
company
Employee at a publicly listed tech

44% 56%
company
Employee in the public sector 59% 41%
Founder 36% 64%
Media/Journalist 57% 43%
Other investor 48% 52%
Policymaker/regulator 73% 27%
Student 60% 40%
Venture capitalist 45% 55%
0 20 40 60 80 100
% of respondents
Source:

This willingness to build bridges is important since key stakeholders in the European
tech ecosystem take a majority view that European regulation makes it harder to
This willingness to build bridges is important since key stakeholders in the European tech ecosystem take a
start and scale a technology
majority viewbusiness in the
that European region. makes it harder to start and scale a technology business in the region
regulation
European regulation makes it harder to start

and scale a technology business Founder or startup/scale-up employee
LEGEND
Agree
Venture capitalist
Disagree

sector
0 20 40 60 80 100
% of respondents
Source:
Opinions on whether startups/scaleups or large established tech companies feels

Unsurprisingly then, Founders also believe they feel more of the regulatory burden in Europe than established tech
the regulatory burden more keenly
Unsurprisingly then,are
companies. Of course,
split. also
Founders Both
if you ask
founders
believe
those thatthey
of
workfeel
startups/scaleups
more of
at public regulatoryand
thecompanies,
tech burden
they areinmore
Europe than
likely to established
say the tech
those who work in public tech companies both tend to think that they shoulder
companies. Of course, if you ask those that work at public tech companies,
opposite. most
they are more likely to say the
of the regulatory burden.
Unsurprisingly
opposite. then, Founders also believe they feel more of the regulatory burden in Europe than established tech
companies. Of course, if you ask those that work at public tech companies, they are more likely to say the
Do you think the regulatory burden in Europe
opposite. Academic/researcher
is
Domore felt by
you think tech
the startupsburden
regulatory or established
in Europe DATASET: OCCUPATION
Academic/researcher
tech companies?
is more felt by tech startups or established Angel investor
tech
Do companies?
you
DATASET:think the regulatory burden in Europe
OC CUPATION Angel investor
Academic/researcher
Employee at a private company that is
is more felt
DATASET: OCby tech startups or established
CUPATION not a tech startup/scale-up
LE GEND Employee at a private company that is
tech companies? Angel investor
LE GEND
Established tech companies Employeenot
at aaprivate
tech startup/scale-up
tech startup or
DATASET: OC CUPATION scale-up
Established
No tech companies
difference Employeeatataaprivate
Employee privatecompany
tech startup
thator
is
nota apublicly
Employee at scale-up
tech startup/scale-up
listed non-tech
LE GEND
No difference
Tech startups
company
Established tech companies Employee
Employeeatataapublicly
private listed non-tech
tech startup or
Tech startups
Employee at a publicly listedcompany
scale-up
tech
No difference company
Employee
Employee at a publicly
at a publicly listedlisted tech
non-tech
Tech startups company
company
Employee in the public sector
Employee at ain
Employee publicly listed
the public tech
sector
company
Founder
Founder
Media/Journalist
Media/Journalist
Founder
Other investor
Other investor
Media/Journalist
Policymaker/regulator
Other investor
Student
Student
Venture capitalist
Venture capitalist
Student
0 20 40 60 80 100
0 20 40% of respondents
60 80 100
Venture capitalist
% of respondents
Unsurprisingly then, Founders also believe they feel more of the0 regulatory
Source:
20
burden
40
in Europe 60
% of respondents
than established
80 100
tech
companies. Of course, if you ask those that work at public tech companies, they are more likely to say the
Source:
opposite.
DATASET: SUBREGIONS
Source:
Do you think the regulatory burden in Europe Central Europe & Baltics
is more felt by tech startups or established
tech companies? DACH
DATASET: SU BRE GIONS

Eastern Europe
LE GEND
Established tech companies France & Benelux
No difference
Tech startups Nordics
Southern Europe
UK & Ireland
0 20 40 60 80 100
% of respondents
Source:

A clear majority of the European tech GDPR

ecosystem believes GDPR has been good
60 %
for European consumers of all respondents agree that GDPR
has been a good thing for European
consumers, including 54% of European
founders that are in agreement.
The European tech industry’s sentiment around the impact of GDPR is more balanced
than might be expected. Founders
The European techare more likely
industry's to agree
sentiment aroundit’s
thehad a negative
impact of GDPR is impact on
more balanced than might be expected.
their company thanThe
The
European
disagree,
Founders arebut
European
tech
more
tech
industry's
not by
likely a
to
industry's
sentiment
large
agree margin.
it's
sentimenthad around
a the impact
Counter-intuitively,
negative
around the impact
impact
of
on
of
GDPR
their
GDPR
is more balanced
perhaps,
company
is more
than might
than disagree,
balanced than butbe
might
be expected.
not by a large
expected.
Founders
margin. are more likely to
Counter-intuitively, agree it's
perhaps, had a negative
founders of impact
larger on their
companies company
(100+ than disagree,
employees) are but
more not
likely by a largeit's
founders of larger companies
Founders
margin.
(100+ employees)
are more likely to agree
Counter-intuitively,
are
perhaps,
more
it's had likely
a negative
founders of
to agree
impact
larger
it’s had a
on their company
companies than disagree,
(100+ employees) not bytoa agree
but likely
are more
to large it's
agree
negative impact thanhad a negative
founders impact
of than
smaller founders of smaller tech companies
margin.
had a negative impact thantech
Counter-intuitively, companies.
perhaps,
founders founders
of smalleroftech
larger companies (100+ employees) are more likely to agree it's
companies
had a negative impact than founders of smaller tech companies
GDPR has had a negative impact on my
DATASET: ALL RESPONDENTS
company
company
DATAS ET : AL L R E SP O NDE N TS
company All respondents
DATAS ET : AL L R E SP O NDE N TS All respondents
DATAS
LE G ENDET : AL L R ESP O ND ENTS All respondents
LE G END
Agree
L EGEND
Agree
Neither
Agree agree nor disagree 0 10 20 30 40 50 60 70 80 90 100
The European tech industry's sentiment around the00 impact
Disagree
Neither agree nor disagree 10 of GDPR
10
20
20
is
30 more
30
40 balanced
40 % of 50
50
60
than
60 might
70
70 be
80
80 expected.
90
90
100
100
Disagree respondents
Founders are more likely to agree it's had a negative impact on their company% than
Disagree disagree,
of respondents but not by a large
% of respondents
margin. Counter-intuitively, perhaps, founders of larger companies (100+ employees) are more likely to agree it's
had a negative impact than founders of smaller
Source: tech companies
DATASET: OCCUPATION
Source:
Source:
GDPR has had a negative impact on my Academic/researcher

company
Angel investor
DATASET: OCC UPATI ON
LE GE ND Employee at a private company that is

Note:
In company
Note: Agree sizes only founders' responses included
Note:
InIncompany
companysizes
sizesonly
onlyfounders'
founders' responses
responses included
included Employee at a private tech startup or
scale-up
Disagree
company

company
Founder
Media/Journalist
Other investor
Student
Venture capitalist
The European tech industry's sentiment around the impact of GDPR is more balanced than might be expected.
Founders are more likely to agree it's had a negative impact on 0their company
20 than
40 disagree, 60 but not
80 by a large
100
margin. Counter-intuitively, perhaps, founders of larger companies (100+ employees) are more likely to agree it's
% of respondents
had a negative impact than founders of smaller tech companies

DATASET: COMPANY SIZE BY # OF EMPLOYEES
Note: Source:
In company sizes only founders' responses included
company <=10
DATAS ET: COMPA NY S IZE BY # OF EMPLOYEES
L EGEND
Agree
Neither agree nor disagree 11-100
Disagree
100+
0 10 20 30 40 50 60 70 80 90 100
% of respondents
Note: Source:
In company sizes only founders' responses included

Importantly, however, there is a very strong majority agreement across the board
from all stakeholderImportantly,
types that however, therebeen
GDPR has is a very strong
a good majority
thing for agreement
Europeanacross the board from all stakeholder types that
consumers.
GDPR has been a goodthere
thing is
fora European consumers. One mightacross
say, therefore,
Importantly,
One might say, therefore, thathowever,
any perceived very strong
negative majorityfor
impact agreement
companies a boardthat
isthe any
from allperceived negative
stakeholder types that
impact forbeen
GDPR has companies
a goodis a justi
thing able cost of
for European scaling more
consumers. Oneethically
might say, therefore, that any perceived negative
justifiable cost of scaling morehowever,
Importantly, ethically.
there is a very strong majority agreement across the board from all stakeholder types that
impact for companies is a justi able cost of scaling more ethically
GDPR has been a good thing for European consumers. One might say, therefore, that any perceived negative
impact for
GDPR has companies
been a good thingis
foraEuropean
justi able cost of scaling more ethically
consumers DATASET: ALL RESPONDENTS
GDPR has been a good thing for European
consumers
DATASE T: ALL RESP ONDENTS
DATASE
LEGE NDT: ALL RESP ONDENTS
consumers
Agree
LEGE ND
DATASE T: ALL RE SPONDE NTS
Neither
Agree agree nor disagree All respondents
LEGE ND
Disagree
Neither agree nor disagree All respondents
Agree
Disagree
Neither agree nor disagree All respondents
Disagree
0 10 20 30 40 50 60 70 80 90 100
% of respondents
0 10 20 30 40 50 60 70 80 90 100
% of respondents
Importantly, however, there is a very strong

Source:majority agreement across the board
0 10 20 30 40 50
from 60
% of respondents
all stakeholder
70 80
types
90
that
100
Source:
DATASET: SUBREGIONS
Source:
GDPR has been a good thing for European Central Europe & Baltics
consumers
DACH
DATASE T: SUB REGIONS
LEGE ND Eastern Europe

Agree
Neither agree nor disagree France & Benelux
Disagree
Nordics
Southern Europe
UK & Ireland
Importantly, however, there is a very strong majority agreement

0
across
20
the board
40
from 60 all stakeholder
% of respondents
80
types100that
DATASET: OCCUPATION
Source:
GDPR has been a good thing for European Academic/researcher

consumers
Angel investor
DATASE T: OCCUPATION
LEGE ND Employee at a private company that is

Agree
Neither agree nor disagree Employee at a private tech startup or
scale-up
Disagree
company

company
Founder
Media/Journalist
Other investor
Student
Venture capitalist
0 20 40 60 80 100
% of respondents
Source:

Evolving Tech Policy in Europe
Europe hasn’t madeThe upsentiment

its mind on the general
about whetherdirection of travel
European of European
regulation isregulation
going in around
the technology is also balanced
right direction. Founders and VCs are more likely to think it isn’t, whilst those in22%
amongst founders and investors. Though 23% of European founders and the of European VCs believe that the
direction regulation has taken in the past year has been negative, this is countered by the 35% and 37%,
public sector or in policymaking rolesgroup
respectively, of each are more favourable.
that take the opposite view.
The direction of travel of European

regulation around technology is positive for Founder or startup/scale-up employee
the European tech ecosystem
LEG END
Agree
Venture capitalist
Disagree

sector
0 20 40 60 80 100
% of respondents
Source:
The
The policy agenda in The
Europepolicy
policy agenda
agenda
around in Europe
in technology
Europe around
around technology
technology
has been has been
has been
dominated by data
dominated
dominated by data
by data privacy
privacy and content
and content copyright
copyright forpast
for the the past
privacy and contenttwo
copyright
years.
for the past two years.
two years.
Number of mentions
Number of keyof
of mentions tech-related
key tech-related Data privacy/
DataGDPR
privacy/ GDPR 121 121 86 86
issues in European
issues Parliament
in European legislative
Parliament legislative
documents by topic
documents per year
by topic per year Content &Content
copyright 29
& copyright 2937 37
LEG END
L EG END Artificial Intelligence 15
Artificial Intelligence 2415 24
FY 2017FY 2017
2018*
2018* Brexit 17 11
Brexit 17 11
Fintech 15 11
Fintech 15 11
Digital health 7
Digital health 7
Blockchain/cryptocurrencies 6
Blockchain/cryptocurrencies 6
Autonomous vehicles 3
Autonomous vehicles 3
Drones 8
Drones 8
CRISPR, Genetic editing 1

CRISPR, Genetic editing 1
Digital tax 2
Digital tax 2
Quantum computing 1
Quantum computing 1
0 50 100 150 200
0 50
Number of legislative 100containing issue 150
documents keywords 200
Number of legislative documents containing issue keywords
Note:
This data looks at the number of citations of keywords related
Note:
to a number of selected
This data looks attechnology-related issuesof
the number of citations in keywords
European relatedSource:
Parliament legislation, where legislation equals documentation
to a number of selected technology-related issues in European Source:
related to the ongoing process of law making, actual bills, etc
Parliament legislation, where legislation equals documentation
related to the ongoing process of law making, actual bills, etc

In the UK, in particular, it’s revealing to look at the relative level of discussion of key
tech issues in UK government legislative documents, activities and press releases.
In the UK, in particular, it's revealing to look at the relative level of discussion of key tech issues in UK government
Brexit, unsurprisingly, has swamped everything else.
legislative documents, activities and press releases. Brexit, unsurprisingly, has swamped everything else.
# of mentions of key tech-related issues in Brexit

UK government legislative documents by
topic per year Data privacy/GDPR
LEGEND
Activities
Press Releases
Blockchain/cryptocurrencies
Legislation
Drones
Fintech
Autonomous vehicles
Content & copyright
Digital health
Quantum computing
CRISPR, Genetic editing
Digital tax
0 250 500 750 1,000 1,250 1,500 1,750

Note:
to a number of selected technology-related issues in UK Source:
government legislation, activities and press releases.

Photo: Esa Pekka Mattila
There’s a clear growth in focus on Artificial Intelligence in European Parliament

There's a clear growth in focus on Arti cial Intelligence in European Parliament legislative documents, but in other
legislative documents,
key but
There's
in other
emerging key emerging
a cleartechnology elds,onsuch
growth in focus
technology
Artiascial
quantum fields, such
computing
Intelligence or autonomous
in European vehicles,
Parliament there
legislative is more 'activity'
documents, and
but in other
as quantum computing or autonomous
'commentary'
key than vehicles,
actual legislation there is more ‘activity’ and
There's a clear growth in focus on Arti cial Intelligence in European Parliament legislative documents, but inand
emerging technology elds, such as quantum computing or autonomous vehicles, there is more 'activity' other
‘commentary’ than 'cactual
key
legislation.
ommentary'
emergingthan actual legislation
technology elds, such as quantum computing or autonomous vehicles, there is more 'activity' and
'c#ommentary' than
of mentions of key actual legislation
tech-related issues in Artificial Intelligence 15 24
European
# Parliament
of mentions legislation, activities
of key tech-related issues in DATASET: LEGISLATION
Artificial Intelligence 15 24
and press Parliament
European releases bylegislation,
topic per year
activities Drones 8 3
# of mentions of key tech-related issues in Artificial Intelligence 15 24
and press Lreleases
DATASET: by topic per year
EGISL ATION
European Parliament legislation, activities Drones 8 3
DATASET:
LEG
and pressL EGISL
END ATION
releases by topic per year Blockchain/cryptocurrencies 4 6
Drones 8 3
2017
LEG END
DATASET: L EGISL ATION Blockchain/cryptocurrencies 4 6
2018
2017 Autonomous vehicles 3 3
LEGEND Blockchain/cryptocurrencies 4 6
2017
CRISPR & Genetic editing 1
Quantum computing 1
Quantum computing 1
0 10 20 30 40
Quantum computing 1 # of legislative documents containing issue keywords
0 10 20 30 40
There's
Note: a clear growth in focus on Arti cial Intelligence in European
Legislation = the ongoing process of lawmaking, actual bills, 0
Parliament
10
legislative
20
documents,
# of legislative documents containing issue keywords
30
but in other
40
key
Note: emerging
procedures. technology
Activities = the elds,
questions and speeches madesuch
by asSource:
quantum computing or autonomous
# of legislativevehicles, there
documents containing iskeywords
issue more 'activity' and
Legislation
the elected =legislators.
the ongoing process
Press of lawmaking,
Releases actual bills,
= the commentary and
'cresponse
ommentary'
procedures.
Note: from Activities = than
the various actual
theagencies
questions
andand legislation
speeches
other movingmade
partsby of Source:
the elected legislators.
government. Press Releases = the commentary and
Legislation = the ongoing process of lawmaking, actual bills, DATASET: ACTIVITIES
response fromActivities
procedures. the various agencies
= the and and
questions other moving parts
speeches madeof by Source:
government.
the elected legislators. Press Releases = the commentary and
# of mentions
response of key
from the various tech-related
agencies issues
and other moving in of
parts Blockchain/cryptocurrencies 13 50
European Parliament legislation, activities
government.
and press releases by topic per year

Drones 27 36
DATASET: ACTIVITIES
LEGEND Artificial Intelligence 15 37

2017
There's a clear growth in focus on Arti cial Intelligence in European Parliament legislative documents, but in other
key emerging technology elds, such as quantum CRISPR & computing
Genetic editing 1or autonomous vehicles, there is more 'activity' and
'commentary' than actual legislation

Quantum computing 1
There's a clear
# of mentions growth
of key in focus
tech-related issuesonin Arti cial Intelligence in European
Artificial Intelligence 0 1015 Parliament
20 30legislative
40 24 documents,
50 60 but 70in other
key emerging
European technology
Parliament elds, such as quantum computing or autonomous
legislation, activities # of legislativevehicles, there
documents containing iskeywords
issue more 'activity' and
'cand
ommentary'
press releases
Note: than actual
by topic legislation
per year
Drones 8 3
Legislation = the ongoing process of lawmaking, actual bills,
DATASET: L EGISL ATION DATASET: PRESS RELEASES
procedures. Activities = the questions and speeches made by Source:
LEG END from the various agencies and other moving parts of Blockchain/cryptocurrencies 4 6
# of mentions of key tech-related issues in
response Artificial Intelligence 24 75
government.
2017
European Parliament legislation, activities
and
2018press releases by topic per year Autonomous vehicles 3 3
Blockchain/cryptocurrencies 18 35
DATASET: P RES S R ELEAS ES
LEGEND CRISPR & Genetic editing 1

Drones 21 19
2017
2018 Quantum computing 1
Autonomous vehicles 10 6
0 10 20 30 40
Quantum computing 3 # of legislative documents containing issue keywords
Note:
Legislation = the ongoing process of lawmaking, actual bills, CRISPR & Genetic editing 0
response from the various agencies and other moving parts of 0 20 40 60 80 100
government. # of legislative documents containing issue keywords
Note:
Legislation = the ongoing process of lawmaking, actual bills,
response from the various agencies and other moving parts of
government.
“ As Spotify, iZettle and Skype have shown, success breeds more

We urgently need Europe’s success. Europe is flourishing in terms of access to later stage
governments to form long- capital, and an ecosystem required to support startups on their
journey. Fintech, healthtech and social impact are just some verticals
term strategies around showing huge promise. But what worries me is that Europe hasn’t
gotten its act together on AI – our companies risk getting crushed by
AI, while stepping up the giants in US and China. We urgently need Europe’s governments
investment into education to form long-term strategies around AI, while stepping up investment
into education and basic research. The future is at stake.”
and basic research. The
future is at stake. Jacob de Geer
iZettle

The legislative process in key European countries has been dominated by data
privacy, content copyright and Brexit with much less discussion related to other
The legislative process in key European countries has been dominated by data privacy, content copyright and
key new technology fields. In Germany, in particular, the issues of data privacy and
Brexit with much less discussion related to other key new technology elds. In Germany, in particular, the issues of
content copyright have been top
data privacy of mindcopyright
and content for German policymakers.
have been top of mind for German policymakers.
Number of mentions of key tech-related Data privacy/GDPR

issues in selected countries' o cial
government legislative documents by topic Content & copyright
per year
Brexit
LEGEND
France
Germany
UK
Drones
Digital tax
Blockchain/cryptocurrencies
Quantum computing
Autonomous vehicles
CRISPR, Genetic editing
Digital health
Fintech
0 10 20 30 40 50 60
Note:
to a number of selected technology-related issues in French, Source:
German and UK government legislation, activities and press
releases.
European governments are stepping up their focus on AI with

many countries having launched initiatives
European governments are stepping up List of government AI initiatives in Europe
their focus on AI with many countries having Initiative Launched/Announced
launched initiatives. List of government AI initiatives in Europe Finland AI Strategy Dec 2017
Denmark Strategy for Digital Growth Jan 2018
Italy AI at the Service of Citizens Mar 2018
France AI Strategy Mar 2018
European Union Communication on AI Apr 2018
UK AI Sector Deal Apr 2018
Sweden AI Strategy May 2018
Germany AI Strategy Nov 2018
Source:
“ Regulation is failing to keep pace with new technologies and

In the coming years, business models, and the risk of overbearing regulation suffocating
further balkanisation of smaller companies remains very real. In the coming years, further
balkanisation of regulatory regimes could create opportunities for
regulatory regimes could some European companies, but at the cost of limiting the overall
growth of the sector.”
create opportunities
for some European Chris Yiu
Tony Blair Institute for Global Change
companies, but at the
cost of limiting the overall
growth of the sector.
What Founders Want
The larger the size of a company’s employee base, the more that founders care about
The larger the size of a company's employee base, the more that founders care about regulatory changes related to
regulatory changes related
hiring to hiring
exibility flexibility
and stock optionsand stock options.
In your opinion, what is one regulatory

change that would have a materially positive <=10
impact on the prospects of your business?
LE G E ND
Tax
Regulatory Support for Startups 11-100
Data Protection or Access

Hiring Flexibility
Capital Support
Banking, Payment 100+
EU Harmonization
Stock Option
0 10 20 30 40 50 60 70 80 90 100
Deregulation
% of respondents
Note:
Founder respondents only. Based on respondents that gave Source:
explicit responses only
The goal for policymakers should be to use the tools at their disposal
to tackle fragmentation and reduce the cost and bureaucracy
associated with starting and scaling businesses in Europe.
“ The goal for policymakers should be to use the tools at their disposal
to tackle fragmentation and reduce the cost and bureaucracy
associated with starting and scaling businesses in Europe. However,
as we look towards the next EU Commission and new legislative
proposals which may follow, regulators need to better understand
the impact of the changes they propose and find new ways to engage
with founders at very early stages, many of whom are understandably
Linda Griffin unfamiliar with the world of policy. Equally European tech companies
King (of all sizes) need to engage in policy discussions if they are interested
in long-term growth.”

Investors &
Investment
Following the Money 2018 set a new record for total capital invested in the
European tech ecosystem, as European VC’s returns are
now highly competitive against private equity in the U.S.
The region’s investor base has also evolved as high net-
worth individuals and family offices participate, even as
pension funds have not stepped up their commitments and
are failing to democratise European tech’s returns.
ARTICLES
08.1 European Capital Flows
08.2 Capital Flows by Geography and Industry
08.3 Expanding European Investor Base
08.4 Bridging the Funding Gap
08.5 Diversifying the Institutional Investor Base

European Capital Flows
The European tech ecosystem will once again see a record level of capital investment in
2018. Total investment is projected to hit $23 billion, comfortably exceeding the $19.6 billion
The European tech ecosystem will once again see a record level of capital investment in 2018. Total investment is
invested in 2017 andprojected
now 4.4x up$23B,
to hit compared to the
comfortably levels ofthe
exceeding investment from
$19.6B invested in 2013.
2017 and now 4.4x up compared to the levels of
investment from 2013.
25.0 3,350.0 3,500.0

Capital invested ($B) and # of deals per year
3,220.0 23.0
LEG END
20.0 19.6
Capital invested ($B) 3,000.0
# of deals 2,728.0

14.6 2,609.0
15.0
# of deals
14.0
2,500.0
10.0
8.6
2,000.0
5.2
5.0
0.0 1,500.0
Note: 2013 2014 2015 2016 2017 2018
All Dealroom.co data excludes the following: biotech,
secondary transactions, debt, lending capital, grants. Please
also note the data excludes Israel. 2018 based on 9M to
September 2018 and projection for Q4 2018 based on Q3 2018
For additional context on annual capital investment into the European tech
ecosystem, it is important to understand there is a material trend in effect
that means many rounds are only captured with a significant delay (see note).
This ‘reporting lag’ For
meansadditional context
that the finalontotals
annualare
capital
notinvestment intoathe
known until European tech ecosystem, it is important to
significant
understand there is a material trend in effect that means that many rounds are only captured with a signi cant
time period has elapsed after the end of the year in question. As such, we have
delay (see note). This 'reporting lag' means that the nal totals are not known until a signi cant time period has
indicatively adjustedelapsedannual
the totals
after the end ofto account
the for thisAs
year in question. reporting lag to
such, we have enable aadjusted the annual totals to account
indicatively
like-for-like comparison
for thisof overalllag
reporting investment trends at the
to enable a like-for-like European
comparison level.investment trends at the European level.
of overall
30
Capital invested ($B), annual, 2013-2018,
adjusted for reporting lag effect
25 $3B
LEG END
Capital invested per year ($B)
Capital invested ($) 20 $1B
Adjusted for reporting lag
15 $B
$B
$23B
10 $20B
$B
$14B $15B
5 $B
$9B
$5B
0
Note: 2013 2014 2015 2016 2017 2018
The reporting lag is the difference between the date of a
round’s disclosure and the reported date of a round’s
occurrence, resulting in a material % of rounds only being
added with a long delay. This is estimated at 97% for 2017 and
90% for 2018.

For additional context on the annual number of deals in the European tech ecosystem, it is
important to understand that there is a material trend in effect that means that many rounds
For additional
are only captured with context
a significant on the
delay annual
(see note).number
Thisof deals in thelag’
‘reporting European
meanstech
thatecosystem,
the final it is important to
totals are not known understand there is a material
until a significant trend inhas
time period effect that means
elapsed aftermany
the rounds
end ofare
theonly
yearcaptured
in with a signi cant delay
(see note). This 'reporting lag' means that the nal totals are not known until a signi cant time period has elapsed
question. As such, we have indicatively adjusted the annual totals to account for this reporting
after the end of the year in question. As such, we have indicatively adjusted the annual totals to account for this
lag to enable a like-for-like
reporting comparison
lag to enable a of overall investment
like-for-like comparison oftrends
overall at the European
investment level.
trends at the European level.
Number of rounds, annual, 2013-2018,

adjusted for reporting lag effect 358
1,343
LEGEND
# of deals
Adjusted for reporting lag
3,350 3,220
2,728 2,609
2,174
1,712
Note:
The reporting lag is the difference between the date of a 2013 2014 2015 2016 2017 2018
round’s disclosure and the reported date of a round’s
occurrence, resulting in a material % of rounds only being
added with a long delay. This is estimated at 90% for 2017 and
70% for 2018.
In 2013, $1 billion of capital invested per quarter in Europe was the norm, but as the
ecosystem has evolved that bar has consistently been raised higher. Europe has
In 2013, $1B of capital invested per quarter in Europe was the norm, but as the ecosystem has evolved that bar has
now seen more than $3 billion invested per quarter for 15 consecutive quarters and
consistently been raised higher. Europe has now seen more than $3B invested per quarter for 15 consecutive
even $5 billion per quarter
quarters for
and the
evenpast 6 straight
$5B per quarters.
quarter for the past 6 straight quarters.
1,215.0
Capital invested ($B) and # of deals per 1,159.0 6.4
1,200.0
quarter 6.0
1,063.0 1,073.0
5.4
5.3
5.1 5.0 5.1
LEGEND
1,000.0
Capital invested ($B) 4.2 900.0

4.0 3.8 4.0
# of deals
# of deals 4.0
3.4 3.4
3.3 3.2
759.0 800.0
2.9
2.5
646.0 2.2 638.0
2.0
2.0 1.6 1.7
600.0
1.2 1.2 1.1
0.0 400.0
20 Q1
20 Q2
20 Q3
20 4
20 Q1
20 Q2
20 Q3
20 4
20 Q1
20 Q2
20 Q3
20 4
20 Q1
20 Q2
20 Q3
20 4
20 Q1
20 Q2
20 Q3
20 4
20 Q1
20 Q2
Q3
Q
Q
13
14
15
16
17
18
13
14
15
16
13
17
14
18
15
16
13
17
14
18
15
16
17
20
Of course, the exact quarterly investment amounts per quarter are subject to ups and
downs so it is helpful to look at trailing 12-month totals to get a sense for the ‘smoothed’
long-term investmentOf course,
trendstheinexact quarterlyOn
the region. investment amounts
this basis, per quarter
the overall are subject
trajectory to ups and downs so it is helpful to look
of the
at trailing 12-month totals to get a sense for the 'smoothed' long-term investment trends in the region. On this
European tech ecosystem since late 2013 is very clear.
basis, the overall trajectory of the European tech ecosystem since late 2013 is very clear.
25.0
4,576.0
Trailing 12-month capital invested ($B) and # 4,445.0 22.0 22.2
of deals by quarter 4,224.0 20.7 4,500.0
20.0 19.6
3,925.0 18.0 3,930.0
LEGEND 4,000.0
15.9
Capital invested ($B) 14.7 14.3 14.7

15.0 14.0 14.1 14.6 3,496.0
# of deals
# of deals 13.1
11.9 3,500.0
10.2
10.0
8.3 8.6 3,000.0
7.1
5.8
5.2
5.0
2,500.0
0.0 2,000.0
20 4
20 Q1
20 2
20 3
Q4
20 1
20 2
20 3
Q4
20 1
20 2
20 3
20 4
20 1
20 2
20 3
20 4
20 1
20 2
Q3
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
14
15
16
17
18
14
15
16
17
14
18
15
16
13
17
14
18
15
16
17
20
20
20

Sentiment within the European tech ecosystem around the capital raising environment
is broadly positive. 72% of European founders and 84% of European investors believe
Sentiment
that it has either stayed within the
the same European
or has becometecheasier
ecosystem around
to raise VCthe
incapital
Europe raising environment
in the past is broadly positive. 72% of
European
12 months. This is very founders
similar and 84% of
to responses European
from investors
2017’s survey,believe
wherethattheit equivalent
has either stayed the same or has become easier
to raise VC in Europe in the past 12 months. This is very similar to responses from 2017's survey, where the
responses were 73% of founders and 83% of VCs.
equivalent responses were 73% of founders and 83% of VCs.
In your opinion, is it easier or harder to raise

venture capital in Europe than it was 12
months ago?
LEGEND
Founders
Easier to raise capital
The capital environment remains unchanged
Harder to raise capital
0 10 20 30 40 50 60 70 80 90 100
% of respondents
Note:
There are interesting perception gaps between founders and investors at the sub-regional
level. The generally high levels of optimism among investors about the changing state of
the capital raising environment in Europe over the past 12 months stand in contrast to a
DACH region shows the largest gap between founders and
more mixed view from founders in the UK, DACH and Eastern Europe.
investors in how they perceive the fundraising environment
In your opinion, is it easier or harder to raise

venture capital in Europe than it was 12
months ago?
LEGEND
Founders, Easier to raise capital
Investors, Easier to raise capital
Founders, The capital environment remains
unchanged
Investors, The capital environment remains
unchanged
Founders, Harder to raise capital
Investors, Harder to raise capital
Founders Investors Founders Investors Founders Founders Founders Founders Investors Founders Investors
Central Europe DACH Eastern Europe France & Nordics Southern UK & Ireland
& Baltics Benelux Europe
Founders remain upbeat about the environment for RAISING CAPITAL IN EUROPE
raising capital in Europe
71 % of European founders believe the capital

environment has remain unchanged over
the past 12 months, or become easier
2018 has again set a new record for total capital CAPITAL INVESTMENT IN EUROPE
invested in the European tech ecosystem
23B
Projected total capital investment in
European tech in 2018, up 4.3x since 2013

Europe has seen a 7x increase in the number of large rounds of $50M+, growing to 70
rounds in 2018 fromOnly
justthe
10smallest
in 2013.rounds have seen a slight decrease in both capital invested and number of deals, which indicates
that round sizes are increasing
DATASET: CAPITAL INVESTED

Capital invested ($M) and # of deals by round
size 10,000
8,868
LEG END
Round size $0-2M
7,549
Round size $2-5M 7,500
Capital invested ($M) / # of deals

Round size $5-10M

5,000
Round size $50M+ 4,154
3,781
3,193
2,930 2,930
2,579
2,292
2,500 2,103 2,054
1,898 1,803
1,491 1,430
1,151 1,144
660 834
0
2013 2014 2015 2016 2017 2018
Only the smallest rounds have seen a slight decrease in both capital invested and number of deals, which indicates
that round sizes are increasing
DATASET: # OF DEALS
2,500
Capital invested ($M) and # of deals by round 2,208
size
1,890 1,922
DATAS E T : # O F D E A LS 2,000
Capital invested ($M) / # of deals
L EG E ND
1,540
1,500
Round size $5-10M

Round size $20-50M 602 632

599
Round size $50M+
500 389
300 320 301
232 251
186
113 143
74 73 42 31
0
2013 2014 2015 2016 2017 2018
Note:
2018 based on 9M to September 2018 and projection for Q4
Note:
2018 based on Q3 2018
2018 annualised based on data to September 2018.
106 In Partnership with

www.thestateofeuropeantech.com & www.thestateofeuropeantech.com
Photo: Sami Heiskanen
Capital Flows by Geography
and Industry
On a cumulative basis since 2013, the UK has attracted $26 billion in total capital
investments, just under 2x as much
On a cumulative assince
basis Germany, which
2013, the ranks
UK has second
attracted $26Bwith $13.6
in total billion.
capital investments, just under 2x as much as
Those two countries, together
Germany with France,
that ranks account
second with $13.6B. for almost
Those 60% of total
two countries, capital
together with France, account for almost 60% of
invested in Europe total
since capital invested
the start in Europe since the start of 2013.
of 2013.
DATASET: TOP 10 COUNTRIES
Capital invested ($M) by country, cumulative
(2013 - 9M 2018) United Kingdom $25,976M
LEG END Germany $13,588M
Cumulative capital invested ($M) 2013 - 9M 2018
France $11,302M
Sweden $5,683M
Spain $3,818M
Netherlands $2,952M
Switzerland $2,463M
Russia $2,263M
Ireland $1,741M
Finland $1,534M
On a cumulative basis since 2013, the UK has attracted $26B in total capital investments, just under 2x as much as
0 5,000 10,000 15,000 20,000 25,000
Germany that ranks second with $13.6B. Those two countries, together withCapital
France, account for almost 60% of
invested ($M)
total capital invested in Europe since the start of 2013.
DATASET: COUNTRY 11-20
Denmark $1,158M
(2013 - 9M 2018)
Belgium $857M
DATASET: COUNTR IES 1 1-20
Italy $772M
LEG END
Cumulative capital invested ($M) 2013 - 9M 2018 Austria $748M
Luxembourg $734M
Norway $711M
Portugal $585M
Poland $472M
On a cumulative basis since 2013, the UK has attracted $26B in total capital investments, just under 2x as much as
Iceland $417M
Germany that ranks second with $13.6B. Those two countries, together with France, account for almost 60% of
Estonia $358M
total capital invested in Europe since the start of 2013.
0 200 400 600 800 1,000 1,200

(2013 - 9M 2018)
DATASET: THE REST
DATASET: THE REST
LEG END Turkey $300M
Cumulative capital invested ($M) 2013 - 9M 2018

Cyprus $276M
Greece $248M
Malta $160M
Lithuania $125M
Romania $98M
Czech Republic $94M
Bulgaria $83M
Ukraine $56M
Latvia $44M
Slovenia $27M
Slovakia $12M
Serbia $5M
Albania $3M
0 50 100 150 200 250 300


08.2 Capital flows by geography and industry
The UK, France and Germany dominate stories about European investment levels
given the multibillion-dollar scale of capital investments into these countries, but
digging beneath the surface, there is an important trend emerging whereby many
other European countries are now hitting their stride and are also on trajectories to
consistently surpass $1 billion+ in annualThecapital
The UK, France and Germany dominate stories about European investmentUK,
levels
France
investment.
givenand
theGermany
multi-billion
dominate
scale of
stories about European investment levels given the multi-billion scale of
capital investments into these countries, but digging beneath the surface,
capital
there
investments
is an important
into these
trendcountries,
emerging but digging beneath the surface, there is an important trend emerging
whereby many other European countries are now hitting their stride andwhereby
also onmany
trajectories
other European
to consistently
countries are now hitting their stride and also on trajectories to consistently
surpass $1B+Capital
in annual capital investment.
invested ($M) DATASET: UNITED KINGDOM surpass $1B+ in annual capital investment. DATASET: GERMANY
by country per year
Capital invested ($M) by country per year 8,000 Capital invested ($M) by country per year
$7,404M $4,036M
$7,168M 4,000
DATASE T : U N I TE D K ING DOM DATAS E T : G ERM AN Y
L EG E ND L E GE ND
6,000
United Kingdom Germany $2,990M
3,000

$2,821M
$4,861M
$4,374M
4,000
2,000 $1,878M
$1,728M
$2,637M
2,000 $930M
1,000
$1,437M
The UK, France and Germany dominate stories0about European investment The UK, levels
France
givenand theGermany
multi-billion dominatescale of
stories0 about European investment levels given the multi-billion scale of
2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018
capital investments into these countries, but digging beneath the surface, capitalthere
investments
is an important into these
trendcountries,
emerging but digging beneath the surface, there is an important trend emerging
whereby
Note: many other European countries are now hitting their stride and
2018 based on 9M to September 2018 and projection for Q4 2017
whereby
also
Note:
2018
on
based on
many
trajectories
9M to
other2018European
September
to
and
consistently
projection
countries
for Q4 2017
are now hitting their stride and also on trajectories to consistently
Source: Source:
surpass
based on Q3$1B+
2018. in annual capital investment. DATASET: FRANCE surpass
based on Q3$1B+
2018. in annual capital investment. DATASET: SWEDEN
Capital invested ($M) by country per year 4,000 Capital invested ($M) by country per year
$3,774M $1,501M
1,500
DATASE T : F R A NC E DATAS E T : SWEDEN
L EG E ND L E GE ND $1,232M
France 3,000 Sweden $1,124M

$2,501M $2,579M
$987M
1,000
2,000
$1,688M
$638M
Note:
2018 based on 9M to September 500
2018 and projection for Q4 2018 1,000 $941M $396M
based on Q3 2018
$619M
0 0
2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018
Note: Note:
2018 based on 9M to September 2018 and projection for Q4 2017 Source: 2018 based on 9M to September 2018 and projection for Q4 2017 Source:
based on Q3 2018. based on Q3 2018.
Italy, Norway and Switzerland have seen the significant expansion of deal volume in 2018,
as investment activity in these relatively less mature countries continues to grow. The
overall top 5 countries in Europe by total number of deals in 2018 remains the same as in
2017 with the UK, followed by France, Germany, Sweden and the Netherlands.
Italy, Norway and Switzerland have seen the signi cant expansion of dealItaly,
volume
Norwayin 2018,
and Switzerland
as investment
haveactivity
seen the
in signi cant expansion of deal volume in 2018, as investment activity in
these relatively less mature countries continues to grow. The overall top
these
5 countries
relatively
inless
Europe
mature
by total
countries
numbercontinues
of to grow. The overall top 5 countries in Europe by total number of
deals in 2018#remains
of dealsthe
bysame as in 2017 DATASET:
country with the UK, followed
UNITED by France,
KINGDOM dealsGermany,
in 2018 remains
Swedenthe andsame
the Netherlands.
as in 2017 DATASET:
with the UK, followed by France, Germany, Sweden and the Netherlands.
GERMANY
per year
1,000
# of deals by country per year # of deals by country per year
895 887 884 500 495
DATASE T : U N I TE D K ING DOM DATAS E T : GER MA NY
821 453
429
L EG E ND L E GE ND 730
750
400
United Kingdom Germany 371
613
# of deals
# of deals
297
300 278
500
200
250
100
0 0
2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018
Italy, Norway and Switzerland have seen the signi cant expansion of deal Italy,
volume
Norway in 2018,
and Switzerland
as investment haveactivity
seen the
in signi cant expansion of deal volume in 2018, as investment activity in
these
Note: relatively less mature countries continues to grow. The overall top
these
5 countries
Note: relatively inless
Europemature by total
countries
number
continues
of to grow. The overall top 5 countries in Europe by total number of
Source: Source:
deals inQ32018
based on 2018. remains the same as in 2017 DATASET: with the UK, followed by France,
FRANCE dealsGermany,
based inQ32018
on 2018. remains
Swedenthe andsamethe Netherlands.
as in 2017 DATASET:
with the UK, followed by France, Germany, Sweden and the Netherlands.
SWEDEN
# of deals by country per year # of deals by country per year

686 502 499
666 500
DATASE T : F R A NC E DATAS E T : SWEDEN
L EG E ND 600 L E GE ND
535 400
France Sweden
# of deals
# of deals
400 300
362 273 270
Note: 275
200
2018 based on 9M to September 171
2018 and projection for Q4 2018 199
200
based on Q3 2018 102
100
0 0
2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018
Note: Note:
2018 based on 9M to September 2018 and projection for Q4 2018 Source: 2018 based on 9M to September 2018 and projection for Q4 2018 Source:
based on Q3 2018. based on Q3 2018.

The diversification of European tech is reflected at the city level too, as exemplified
The
by increased capital diversi�cation
invested into aof European
new tech is of
generation re�ected
citiesat theare
that city not
leveltypically
too, as exempli�ed by increased capital invested
into a new generation of cities that are not typically considered among Europe's most active tech hubs, such as
considered among Hamburg,
Europe’sMilan
mostand
active
Oslo.
tech hubs, such as Hamburg, Milan and Oslo.
London 892 1,622 3,011 3,065 5,654 4,426

Top 20 European hubs by capital invested Paris 333 600 1,065 1,332 1,686 2,607
($M) Berlin 592 1,165 2,270 948 1,824 2,221
Barcelona 70 262 334 258 568 1,044
Stockholm 374 522 916 1,044 1,016 793
Hamburg 18 82 134 247 191 761
Madrid 67 109 116 263 307 441
Dublin 98 128 99 332 309 420
Oxford 9 32 135 201 53 372
Cambridge 20 49 94 74 116 352
Zurich 70 55 53 55 110 321
Helsinki 184 79 83 127 108 290
Moscow 130 295 72 127 608 286
Copenhagen 22 72 135 91 64 262
Munich 111 109 167 170 253 251
Tallinn 24 18 53 16 6 249
Amsterdam 218 556 277 144 354 240
Oslo 8 12 57 119 121 207
Milan 11 36 44 131 63 148
Lausanne 17 4 31 102 28 138
2013 2014 2015 2016 2017 2018
Note: Source:
This trend is also reflected in data showing deal volume by city, where the rise
in investment activities in new generation tech hubs like Milan and Oslo has
This trend is also re�ected in data showing deal volume by city, where the rise in investment activities in new
been significant in 2018.
generation tech hubs like Milan and Oslo has been signi�cant in 2018.
London 414 581 641 608 598 489

# of deals in Top 20 European hubs (ranked Paris 126 174 223 352 332 288
by capital invested in 2018) Berlin 184 238 261 271 210 149
Barcelona 47 66 91 93 105 71
Stockholm 46 102 157 305 312 209
Hamburg 12 16 30 39 20 19
Madrid 65 53 69 60 56 49
Dublin 38 36 41 95 49 47
Oxford 3 8 11 10 11 24
Cambridge 9 18 20 24 19 27
Zurich 14 29 31 35 42 52
Helsinki 34 48 57 67 67 51
Moscow 45 38 28 65 71 67
Copenhagen 27 38 47 39 56 44
Munich 40 43 47 49 47 48
Tallinn 13 19 17 20 8 12
Amsterdam 71 77 123 115 97 84
Oslo 9 10 14 50 45 72
Milan 23 34 38 47 35 64
Lausanne 4 4 14 23 7 12
2013 2014 2015 2016 2017 2018
Note: Source:

On average, approximately one-third of all investments into European tech companies by

On average,
European VCs involve approximately
a cross-border one-third of
transaction, all investments
where into from
an investor European
onetech companies by European VCs involve a
country
cross-border transaction, where an investor from one country invests into a company from another European
invests into a company from another European company. The larger the investment round,
company. The larger the investment round, the greater the share of total investment activity that happens in this
the greater the share
way.of total investment activity that happens in this way.
Share of investments made by European VCs
% of international (non-domestic) investments made by

42%
into international (non-domestic) companies
40
by round size 37%
33%
LEG END 31% 31%
30
2013 - 2015
European VCs
27%
2016 - 9M 2018
21% 21%
20%
20 19%
17%
13%
10
0
<$2M $2M-$5M $5M-$10M $10M-$20M $20M-$50M $50M+
Source:
Fintech remained the single largest vertical for CAPITAL INVESTMENT BY INDUSTRY
capital investment in Europe in 2018
5
projected total capital investment into
European fintech companies in 2018
$ B
Photo: Jussi Hellsten

There is a high level of industry diversity in terms of where capital is being invested in the
European tech ecosystem at scale. The dominant industries in 2018 are fintech, software
There is a high
for enterprise applications, levelhealth
digital of industry
anddiversity in terms ofall
transportation, where capitalare
of which is being invested
on track to bein the European tech
ecosystem at scale. The dominant industries in 2018 are ntech, software for enterprise applications, digital health
in excess of $2.5 billion in total capital invested in 2018. Beyond those four industries, there
and transportation, all of which are on track for in excess of $2.5B in total capital invested in 2018. Beyond those
are a further four industries thatthere
four industries, will all
aresurpass
a further $1billion in capital
ve industries that willinvested
all surpassthis
$1Byear.
in capital invested this year.
Capital invested ($M) by industry DATASET: CAPITAL INVESTED $2B+ IN 2018

$4,839M
LEG END 5,000
Fintech $4,222M
Enterprise software 4,000

$3,571M
Health

$3,235M
Transportation
3,000 $2,622M
$2,424M
$2,054M
2,000 $1,612M
$1,520M
$1,414M $1,363M
$936M $1,011M
$822M
1,000
There is a high level of industry diversity in terms of$552M
where capital
$465M is being invested in the European tech
$172M
and transportation, all of which are on track for0 in excess

2013
of $2.5B
2014
in total capital invested
2015 2016
in 2018.
2017
Beyond
2018
those
four industries, there are a further ve industries that will all surpass $1B in capital invested this year.
LEG END DATASET: CAPITAL INVESTED $1B-$2B IN 2018
Home $1,514M
1,500
Media
$1,297M
Energy
$1,192M
1,250
Marketing $1,093M $1,120M
$1,062M
$1,015M
Fashion $989M
$955M
1,000 $883M
$867M
$801M
$701M
750
$571M $554M
500 $431M
$345M $346M
$266M
There is a high level of industry diversity in terms
250 of where capital is being invested in the European tech
$204M
and transportation, all of which are on track for0 in excess
2013
of $2.5B
2014
in total capital invested
2015 2016
in 2018.
2017
Beyond
2018
those
LEG END DATASET: CAPITAL INVESTED $500M-$1B IN 2018
Travel
$1,570M
Food
1,500 $1,390M
Internet of Things
Education
Gaming
$1,027M
Real estate $975M
1,000 $873M
$795M
$728M $755M
$691M $662M
$516M $516M
500 $437M $409M
$397M
$347M
$300M
$251M $262M
There is a high level of industry diversity in terms of$181M
where capital
$195M is being invested in the European tech
ecosystem at scale. The dominant industries in 2018$17M are ntech, software for enterprise applications, digital health
and transportation, all of which are on track for0 in excess of $2.5B in total capital invested in 2018. Beyond those
2013 2014 2015 2016 2017 2018
LEG END DATASET: CAPITAL INVESTED $250M-$500M IN 2018
Music 1,000 $943M
Robotics
HR & Recruitment
Construction 750 $687M
$638M
Semiconductors $633M
Security
$484M $493M
Telecom 500 $432M
$389M $387M
$365M $352M
$292M $312M
$272M $275M
$250M
250 $197M $178M $189M
$124M
$100M $84M
$64M
$22M $34M
$11M
0
2013 2014 2015 2016 2017 2018
Note:
2018 based on 9M to September 2018 and projection for
Q4 2018 based on Q3 2018.

Expanding European Investor
Base
One of the most critical ways in which the European tech ecosystem has evolved has been
the buildout of the investor base supporting it, which has grown in depth and, importantly,
One of the most critical ways in which the European tech ecosystem has evolved has been the build out of the
sophistication. Oneinvestor
way tobase
demonstrate the remarkable expansion of the investor base
supporting it, which has grown in depth and, importantly, sophistication. One way to demonstrate
is to look at the number of uniqueexpansion
the remarkable institutional
of the investors that
investor base is tohave
look made at least
at the number ofone
unique institutional investors that have
investment in European tech
made at per
least oneyear. In 2018,
investment this reached
in European more
tech per than
year. 2,500
In 2018, thisunique
reached more than 2,500 unique institutions,
institutions, up 2.8xupsince 20132013
2.8x since
DATASET:AT LEAST 5 ROUNDS

# of unique institutions that have
291
participated in at least 1 and 5 investment 300 285
267
rounds in Europe per year
235
LEGEND
Unique investors
# of unique investors 200
151
One of the most critical ways in which the European tech ecosystem has evolved has been the build out of the 117
investor base supporting it, which has grown in

100 depth and, importantly, sophistication. One way to demonstrate
the remarkable expansion of the investor base is to look at the number of unique institutional investors that have
made at least one investment in European tech per year. In 2018, this reached more than 2,500 unique institutions,
up 2.8x since 2013 0
2013 2014 2015 2016 2017 2018
# of unique institutions that have DATASET:AT LEAST 1 ROUND

2,513
participated in at least 1 and 5 investment 2,500
2,468
rounds in Europe per year

2,068
# of unique investors
DATASET: AT LEAST 1 RO UND

2,000
LEGE ND
1,554
Unique investors 1,500
1,195
1,000 905
500
Note:
Number of unique investors (incl. investment funds, 0
Note:
corporate investors & accelerators, but excl. angel 2013 2014 2015 2016 2017 2018
Number of unique
investors) thatinvestors (incl. investment
have participated funds,
in at least corporate
1 investment
investors
round&peraccelerators, but excl. angel
year. 2018 annualised investors)
based on datathat
to have
participated
September in at2018.
least 1 investment round per year. 2018
annualised based on data to September 2018. Source:
It’s important to note, however, that more capital and more investors alone are not enough. In
order to maximise the chancestoofnote,
It's important success forthat
however, early-stage European
more capital startups,alone
and more investors it’s important
are not enough. In order to maximise
that capital is allocated to sophisticated investors best able to support young companies
the chances of success for early-stage European startups, it's important that capital is allocated to sophisticated
as they navigate the scalingbest
investors journey.
able toThis is proven
support in data. Startups
young companies raising
as they navigate theSeed from
scaling top This is proven in data.
journey.
investors are significantly
Startups more
raisinglikely to raise
Seed from a Seriesare
top investors A.signi cantly more likely to raise a Series A.
40%
Median conversion rates to Series A within 36 40
Conversion rate from Seed to Series A (%)
months of Seed round, by investor quartiles
LEG END 30
Conversion to Series A (%)

24%
Median conversion rate to Series A (%)
19% 19% 19% 19%
20
13%
10
7%
Note:
0
Based on disclosed Seed and Series A rounds, conversion Top quartile Second quartile Third quartile Bottom quartile
rates calculated for VC funds that made at least 8 Seed rounds
since 2012, and at least 75% of rst investments at Seed/Pre-
Seed. See: https://blog.dealroom.co/the-journey-to-series-a-
in-europe/ Source:

08.3 Expanding European investor base
European banks are clearly leading the charge as the most active and
frequent corporate investors in the European tech ecosystem with many
having built
European substantial
banks tech company
are clearly leading the charge portfolios
as the most in Europe
active and frequent corporate investors in the
European tech ecosystem with many having built substantial tech company portfolios in Europe
Country CIty # of rounds in the last 12M Portfolio size in Europe Portfolio % in Europe
Top 10 most active corporate investors in BNP Paribas France Paris 28 85 81
European tech
ZKB - Zürcher Kantonalbank Switzerland Zurich 20 42 98
Next47 (Siemens) Germany Munich 13 13 14
Barclays United Kingdom London 10 35 65
Allianz X Germany Munich 9 6 43
Robert Bosch Venture Capital Germany Stuttgart 9 21 52
Sabadell Venture Capital Spain Barcelona 8 20 100
Deutsche Telekom Capital Partners Germany Hamburg 8 36 44
AXA Venture Partners France Paris 8 18 44
Axel Springer Germany Berlin 7 71 76
Source:
Corporate investors are very active in the European CORPORATE INVESTMENT ACTIVITY
tech ecosystem
681
unique corporate investors have invested
in at least one investment round in Europe
in 2018, up more than 3x from 220 in 2013
The growth in the investor base has been supported by a diverse set of
new entrants that are
Thedeploying capital
growth in the inbase
investor European
has beentech for thebyfirst
supported a diverse set of new entrants that are deploying capital in
European
time. As in other regions, tech for the
corporate rst time.have
investors As in other
becomeregions, corporate
active in investors have become active in Europe in
Europe in significantly cantly greater
signigreater numbers.numbers. In 2018, more than 680 unique corporates participated in at least one investment in
Europe, up 3.1x from 220 in 2013.
# of unique corporate investors per year and 688

681
number of rounds involving at least one 648
corporate investor 586
# of unique corporate investors / deals
600
LEGEND 510
441
# of unique corporate investors
# of deals 400 387
265
220
200
0
Note: 2013 2014 2015 2016 2017 2018
Unique corporate investor count is based on number of
corporate (i.e. non investment fund) investors that have
participated in at least 1 round per year. 2018 annualised based
Source:
on data to September 2018.

US investors continue to invest actively in European tech companies,

although the number of unique institutions that have participated in at least
US investors continue to invest actively in European tech companies, although the number of unique institutions
one investment round in 2018 is down slightly on 2017.
that have participated in at least one investment round in 2018 is down slightly on 2017.
# of unique US institutions that have

311
participated in at least 1 investment round in
300
Europe per year 276 279
LEG END 235
# of unique investors
212
# of unique US investors
200
153
100
0
2013 2014 2015 2016 2017 2018
Note:
Number of unique investors (incl. investment funds, corporate
Source:
investors & accelerators, but excl. angel investors) that have
participated in at least 1 investment round per year. 2018
annualised based on data to September 2018.
The top US investors continue to invest actively in Europe, though they

The top US investors continue to invest actively in Europe,
remain opportunistic and selective
though they remain opportunistic and selective.
# of deals made by Tier 1 US investors

81
LEG END
# of deals
62 63
58
49 49
2013 2014 2015 2016 2017 2018
Note:
Based on investment rounds in Europe led by a selection of 22
Source:
leading US VC funds. 2018 annualised based on data to
September 2018.
The influence of Asian investors in the European tech ecosystem has

grown significantly in recent years and hit a new record in 2018 in terms of
The in�uence
capital invested in rounds of Asian
involving investors
Asian in the European
investors, tech ecosystem
approaching close to has
a grown signi�cantly in recent years and hit a
new record in 2018 in terms of capital invested, approaching close to a projected $4B, up from less than $200M in
projected $4billion,2013.
up from less than $200 million in 2013.
152
Capital invested ($M) by # of deals involving 4,000 3,815 150
Asian investors
127
3,323
LEG END 125
3,000
# of deals 89 100
# of deals
83
2,000 75
55 1,536
1,117 50
1,000 27 816
25
165
0 0
2013 2014 2015 2016 2017 2018
Note: Source:
2018 annualised based on data to September 2018

Asian investors are starting to deploy large sums of ASIAN INVESTMENT ACTIVITY IN EUROPE
capital into European tech startups
23X
Increase in total investment into European
tech companies via rounds involving Asian
investors over the past 5 years, from less
than $200million in 2013 to a projected $3.8
billion in 2018
The rapid growth in investor interest in Europe from Asia has been underpinned by a
large expansion of capital invested in Europe from China. Chinese investors will have
The rapid
participated in rounds growth
totalling in investor
more than $1interest
billioninin
Europe from Asia has
commitments tobeen underpinned
European tech by a huge expansion of capital
invested in Europe from China. Chinese investors are on track to surpass more than $1B in commitments to
companies in 2018 for the first time, a more than 10x increase since 2013.
European tech companies in 2018 for the rst time, a more than 10x increase since 2013.
Capital invested ($M) and # of deals by 33

1,062
Chinese investors in Europe
1,000
30
LEG END
24
Amount ($M) 776
750 21
# of deals
# of deals
20
500
12
363
10
6 248
250
90 76
0 0
2013 2014 2015 2016 2017 2018 forecast
Note: Source:
Forecast created by Dealroom.co
Photo: Jussi Hellsten

Bridging the Funding Gap
European VCs are on track for a third consecutive year of raising more than $8 billion and
have raised more than $40 billion since 2013. Larger funds (>€100 million) account for a
growing share of total fundsVCs
European raised
are onintrack
the region.
for a third consecutive year of raising more than $8 billion and have raised more than
$40 billion since 2013. Larger funds (>€100 million) account for a growing share of total funds raised in the region.
VC funds raised ($B) and # of VC funds DATASET: FUNDS RAISED

closed per year by fund size (€M)
10
LEGEND
<€25M
Funds raised ($B) / # of funds closed

€25-50M
8
€50-100M
€100-250M
€250M+
5
0
2013 2014 2015 2016 2017 H1 2018*
European VCs are on track for a third consecutive year of raising more than $8 billion and have raised more than
$40 billion since 2013. Larger funds (>€100 million) account for a growing share of total funds raised in the region.
DATASET: FUNDS CLOSED
200
VC funds raised ($B) and # of VC funds
closed per year by fund size (€M)
DATASET: FU ND S CLOSED
150
LEGEND
<€25M
€25-50M
€50-100M 100
€100-250M
€250M+
50
Note: 0
Number of unique investors (incl. investment funds, 2013 2014 2015 2016 2017 H1 2018*
corporate investors & accelerators, but excl. angel
Note:
investors) that have participated in at least 1 investment
Total
roundfunds raised
per year. are annualised
2018 displayed in USD,
basedbut
onthe grouping
data to of
funds by fund2018.
September size is based on EUR. Taken from the European Source:
Data Collective, developed by Invest Europe. EDC data
converted at EUR:USD of 1.1605, the rate on 30 Sep 2018. H1
2018 preliminary.

First-time VC funds have raised $10 billion across more than 250 funds since 2013, but
First-time VC funds
follow-on funds, unsurprisingly, have raised
account $10overwhelming
for the billion across more than 250(>75%)
majority funds since 2013, but follow-on funds,
of total
unsurprisingly, account for the overwhelming majority (>75%) of total funds raised by VCs in Europe. The data for
funds raised by VCsthe
in Europe.
rst half ofThe
2018data fora decline
shows the first half funds
in total of 2018 shows
raised a decline
by First-Time VCinfunds
totalcompared to the comparative
funds raised by First-Time VC funds compared
totals for 2017 and 2016. to the comparative totals for 2017 and 2016.
Funds raised ($B) and number of funds DATASET: FUNDS RAISED

closed per year by fund type
10.0
LEGEND

First-Time VC Fund
First-Time VC Fund of Established Firm 7.5
Follow-on VC Fund
5.0
First-time VC funds have raised $10 billion across more than 250 funds since 2013, but follow-on funds,
2.5
unsurprisingly, account for the overwhelming majority (>75%) of total funds raised by VCs in Europe. The data for
the rst half of 2018 shows a decline in total funds raised by First-Time VC funds compared to the comparative
totals for 2017 and 2016. 0.0
2013 2014 2015 2016 2017 H1 2018*
Funds raised ($B) and number of funds

DATASET: FUNDS CLOSED
closed per year by fund type
DATASET: FU ND S CLOSED Funds raised ($B) / # of funds closed
LEGEND 150.0
First-Time VC Fund
First-Time VC Fund of Established Firm
Follow-on VC Fund 100.0
50.0
0.0
Note: 2013 2014 2015 2016 2017 H1 2018*
Taken from the European Data Collective, developed by
Invest
Note: Europe. EDC data converted at EUR:USD of 1.1605,
the rate
Taken on 30
from theSep 2018. H1
European 2018
Data data preliminary
Collective, developedand
by Invest
subject
Europe. to change.
EDC data converted at EUR:USD of 1.1605, the rate on Source:
30 Sep 2018. H1 2018 data preliminary and subject to change.
The European investor base continues to be bolstered by the launch of new first-time
funds, often The
founded by investors
European investorwith strong
base existing
continues totrack records,by
be bolstered such
theas Stride.VC
launch of newand rst-time funds, often founded b
The European investor base continues to be bolstered by the launch of new rst-time funds, often founded by
Five Seasonsinvestors
Ventures.
with with
investors strong existing
strong existingtrack records,
track records, such
such as Stride.VC
as Stride.VC and
and Five Five Seasons
Seasons Ventures Ventures
Fund sizeFund
($M) size Country
($M) Announced/Launched
Country Announced/Launched
Selecte Selecte rst-time fund launches in Europe
rst-time fund launches in Europe Corviglia Capital Fund
Corviglia Capital Fund
250
250
Luxembourg 4Q 2018
Luxembourg 4Q 2018
since Q4 2017
since Q4 2017 Trust Esport 11 France 4Q 2018
Trust Esport 11 France 4Q 2018
Norselab 10 Norway 4Q 2018
Norselab 10 Norway 4Q 2018
Imec.xpand 131 Belgium 3Q 2018
Imec.xpand
Raise Ventures 67 131 France Belgium
3Q 2018 3Q 2018
Slingshot Ventures
Raise Ventures 64 67 Netherlands France
3Q 2018 3Q 2018
Indaco Venture Partners 146 Italy 2Q 2018
Slingshot Ventures 64 Netherlands 3Q 2018
Stride.VC 64 UK 2Q 2018
Indaco Venture Partners 146 Italy 2Q 2018
Ring Capital 170 France 1Q 2018
Stride.VC
Maki.vc 78 64 Helsinki UK 1Q 2018 2Q 2018
Ring
Five Capital
Seasons Ventures 67 170 France France
1Q 2018 1Q 2018
Luminar Ventures 56 Sweden 1Q 2018
Maki.vc 78 Helsinki 1Q 2018
Brighteye Ventures 56 France 4Q 2017
Five Seasons Ventures 67 France 1Q 2018
Market One Capital 40 Poland 4Q 2017
Luminar Ventures 56 Sweden 1Q 2018
Brighteye Ventures
Source: 56 France 4Q 2017
Market One Capital 40 Poland 4Q 2017
Source:

The rise of a new generation of funds is positive for founders, but is also delivering
returns to investors. The European Investment Fund’s data shows that emerging
managers, definedThe rise of a newfrom
as managers generation
Fundof funds is positive
I through foraccount
Fund III, founders,for
butais also delivering returns to investors. The
European Investment Fund's data shows that emerging managers, de ned as managers from Fund I through Fund
significant proportion of the best-performing funds in their portfolio.
III, account for a signi cant proportion of the best-performing funds in their portfolio.
Distribution of top-performing EIF-backed

VC fund managers split by emerging versus
established funds
LEG END
IRR, Emerging
TVPI, Emerging
IRR, Established
TVPI, Established
IRR TVPI IRR TVPI IRR TVPI
Top 5 Top 10 Top 20
Note:
Data relates to EIF-backed European ICT funds only. Emerging
funds are de ned as any fund between Fund I and III. Data as of Source:
31 March 2018.
The level of VC funds raised on a per capita basis per country varies widely
across Europe and serves to highlight those places that are tracking beneath the
European average. The VCslevel of VC funds
in Spain raisedmost
and Italy, on a per capita basis
notably, haveper country
raised varies widely across Europe and serves to highlight
significantly
those places that are tracking beneath the European average. VCs in Spain and Italy, most notably, have raised
less in total funds since 2013 compared to the European average.
signi cantly less in total funds since 2013 compared to the European average.
VC funds raised per capita by country of GP DATASET: TOP 10

by year 250
LEGEND $222
$204
Funds raised per capita (2013-1H 2018) 200
$184
Funds raised per capita ($)
European average
$158
150
$119 $117
$101
100 $93
$72 $72 $72 $72 $72 $72 $80 $72
$48
50
0
s
ay
nd
ce
en
nd
n
an
nd
an
ai
do
rw
an
la
ed
la
Sp
rm
la
nl
er
Ire
ng
No
Fr
Sw
er
Fi
Ge
itz
Ki
th
Sw
d
Ne
ite
The level of VC funds raised on a per capita basis per country varies widely across Europe and serves to highlight
Un
those places that are tracking beneath the European average. VCs in Spain and Italy, most notably, have raised
signi cantly less in total funds since 2013 DATASET:
compared 11-20
to the European average.
$72 $72 $72 $72 $72 $72 $72 $72 $72 $72 $72 $72 $72
VC funds raised per capita by country of GP 75
by year
DATASET: 1 1-2 0
Funds raised per capita ($)
LEG END 50
$45
Funds raised per capita (2013-1H 2018) $41
$39
European average
$32
25 $24 $23
$11
$9
$6 $5 $4
$2 $0
0
k
ria
ly
cs
ic
nd
ia
ce
al
ia
e
ar
ar
in
Ita
ug
ar
an
bl
iu
lti
ee
la
st
ra
ng
nm
pu
lg
lg
m
rt
Po
Ba
Au
Gr
Uk
Be
Bu
Hu
Note:
Po
Re
Ro
De
Taken from the European Data Collective, developed by

ec
Cz
Invest Europe. EDC data converted at EUR:USD of 1.1605,

the rate on 30 Sep 2018. Table excludes Luxembourg,
Note:
which has raised $1,074 per capita since 2013. H12018
Taken from the European Data Collective, developed by Invest
data preliminary and subject to change.
Europe. EDC data converted at EUR:USD of 1.1605, the rate on Source:
30 Sep 2018. Table excludes Luxembourg, which has raised
$1,074 per capita since 2013. H12018 data preliminary and
subject to change.

As the European VC ecosystem has matured, there has been a clear trend of increasing
fund sizes to better capitalise European fund managers and enable them to write larger
As the European
initial cheques, to follow on more VC ecosystem has
meaningfully andmatured,
also tothere
buildhas been
more a clear trend
diversified of increasing fund sizes to better
portfolios.
capitalise European fund managers and enable them to write larger initial cheques, to follow on more meaningfully
This trend continued in 2018 and has seen the median VC fund size increase to $100 million,
and also to build more diversi ed portfolios. This trend continued in 2018 and has seen the median VC fund size
doubling from $51 million
increaseinto2017
$100and up more
million, than
doubling 3x$51
from from $29inmillion
million inup
2017 and 2013.
more than 3x from $29 million in 2013.
$129M
Median and mean fund size ($M) at nal 125
$114M
closing by year
$100M $100M
DATASET: A LL VC FUND S
100
LEGE ND $82M
Fund size ($M)

All VC Funds - Mean
75 $63M
$63M
All VC Funds - Median
$52M $51M
50 $39M $37M
$29M
25
0
2013 2014 2015 2016 2017 H1 2018*
Note:
Europe. EDC data converted at EUR:USD of 1.1605, the rate on
30 Sep 2018. H1 2018 data is preliminary and subject to change.
Source:
The small size of European VC funds has generally been viewed as a hurdle for the
European ecosystem due to the perceived inability of European VCs to support
Themeaningful
companies by writing small size of European VC funds has
growth cheques. generally
This been viewed
challenge as a hurdle
of sub-scale for the European ecosystem due to the
funds
perceived inability of European VCs to support companies by writing meaningful growth cheques. This challenge
has started to change in the region’s largest countries, but it’s clear fund sizes remain
of sub-scale funds has started to change in the region's largest countries, but it's clear fund sizes remain small in
small in many sub-regions across Europe
many sub-regions across Europe.
$102M
Median and mean fund size at nal closing by UK & Ireland
$161M
year by sub-region
$85M
DACH
$130M
LEG END
$34M
Median France & Benelux
$63M
Mean $32M
Southern Europe
$49M
$20M
Nordics
$73M
$20M
Central & Eastern Europe
$31M
$45M
Europe
$89M
0 25 50 75 100 125 150 175

Fund size at nal closing ($M)
Note:
30 September 2018. Source:
The scale of European VC fundraising is put into perspective when compared

against the volumeOfofcourse,
capitalone reason
that forto
flows thethe
difference in Buyout
region’s LP commitments is as simple
funds. Even takingas the scale of the different asset
classes. European Buyout funds typically raise 7-8x as much per year as European VC funds with much larger
into account the record levels of funds raised by European VCs since 2016, those
average fund sizes. As such, LP types that have minimum allocation requirements can commit without the
sums are dwarfed by the amounts
concern committed
of being too concentratedto European
as an anchorBuyout funds.
source of funds for an individual fund manager.
80.0 $75.5B
Funds raised by fund type per year $71.8B
LEG END
60.0
Buyout Funds
$51.1B
VC Funds
Fund raised ($B)
$42.3B
40.0 $38.3B $37.5B
20.0
$9.5B $8.9B
$5.7B $6.9B
$4.4B $4.7B
0.0
Note: 2013 2014 2015 2016 2017 H1 2018
Source:

“ Venture capital fund managers now span the European continent.

This means investors can access best-in-class funds from the
Venture capital fund Nordics to Central and Eastern Europe, and back dynamic businesses
which are becoming the next wave of European and world leaders.”
managers now span the
European continent. Nenad Marovac
Invest Europe
“ Invest Europe has worked long and hard to tackle the issue of scale
in European venture capital. The pan-European fund of funds
Steady growth in programme, seeded with €410 million of EU money, will give larger
investors a new way into VC. But we should not expect the response to
fundraising will be more be immediate - steady growth in fundraising will be more sustainable
for investors and fund managers alike.”
sustainable for investors
and fund managers alike. Michael Collins
Invest Europe

Photo: Samuli Pentti / Sami Valikangas
Beyond government agencies,

Beyond corporate
government investors
agencies, and
corporate privateand
investors individuals/family offices
private individuals/family o ces are the largest investors
are the largest investors in European VC funds. Pension funds, meanwhile, have only
in European VC funds. Pension funds, meanwhile, have only invested $2.4 billion into European VCs in the ve
invested $1.7B into years
European VCs in the five years since 2013.
since 2013.
Share of funds committed to VC funds by LP Government agencies 25.2%

type (2013-2017)
Corporate investors 15.2%
LEG END
Private individuals 13.6%
% of total funds raised
Fund of funds 8.6%
Other asset managers (including PE

7.4%
houses other than fund of funds)
Pension funds 6.7%
Family offices 6.2%
Banks 5.1%
Endowments and foundations 4.6%
Insurance companies 3.7%
Capital markets 2.0%
Sovereign wealth funds 1.1%
Academic institutions 0.7%
0.0 5.0 10.0 15.0 20.0 25.0

Share of total funds committed (%)
Note:
30 September 2018.
European tech growth and success has not gone unnoticed by family o ces and high net-worth individuals
(HNWs). Over the last ve years, they have collectively invested over $5 billion in European venture capital funds.
Private individuals Only
& family offices have contributed $5B to European VC since 2013.
government agencies have invested more in European VC in that same period.
Top 3 LP types in European VC by % of total

funds committed (2013-2017) Government agencies 25%
LEG END
VC funds ($B) Private individuals & Family offices 20%
Corporate investors 15%
0 5 10 15 20 25
% of total funds committed 2013-2017
Note:
30 September 2018.
“ We are seeing an increased appetite for investment in European

technology companies coming from HNW families and family
Private investors, offices. Private investors, and especially multi-generational families
with millennial family members, are increasingly looking to make
and especially multi- impactful investments in tomorrow’s new enterprises and in ideas
that could re-shape the future. The potential for very high financial
generational families returns isn’t always the major criteria driving allocations. The
with millennial family attractiveness of taking part in the fascinating world of today’s tech
entrepreneurs and contributing to resolve global challenges plays a
members, are increasingly crucial role in investment decisions.”
looking to make impactful Pierre Stadler

investments in tomorrow’s Pictet Alternative Advisors
new enterprises and in

ideas that could re-shape
the future.
Diversifying the Institutional
Investor Base
European VC has been transformed in the past decade and is, as a result, not only now
performing well,The
butpoor
is also highlyperformance
historical competitive on a forward-looking
of European VC relative to UScomparison
VC and also toagainst
European Private Equity is no secret.
both European Private EquityVCand
But European hasUS VCtransformed in the past decade and is, as a result, not only now performing well, but is
been
also highly competitive on a forward-looking comparison against both European Private Equity and US VC
Horizon Pooled Return (Net) by Fund Index,

29.8%
June 2018 30.0
25.0%
LEGEND
Horizon Pooled Net Return (%)

Europe Developed Venture Capital Index 21.7%
20.3%
Europe Developed Private Equity Index 20.0
17.2% 17.2%
Cambridge Associates US Venture Capital Index 16.0% 16.0%
15.6% 15.3%
15.0%
MSCI Europe Index
12.5%
10.3% 10.2%
10.0
8.2% 8.4%
7.5% 7.4%
6.8% 6.2%
5.3%
4.0% 4.2%
2.4%
0.0
25-Year 20-Year 15-Year 10-Year 5-Year 3-Year 1-Year
Note: Cambridge
Source:
As of June 30, 2018. Associates
“ Pension funds now more interested in European venture because

pension funds look for good returns, and European venture has
Venture capital fund shown an uplift in returns over last years. However, there are
some things holding others back from allocating to European VC.
managers now span the Those include the fact that VC investments tend to have long and
deep J-curves, which requires long-term capital that can handle
European continent. illiquidity. Furthermore, a secondary market in European VC is under
development but is still immature.”
Christina Brinck
Sixth Swedish National Pension Fund
The European Investment Fund is, to nobody’s surprise, the single most frequent supporter
of European venture capital funds, but there is a growing list of LPs that are consistently
backing European fund managers.
Investor namename
Investor # of known #
fund
of commitments
known fund commitments
Top 15 mostTop 15 most active LPs in tech-focused VC
active LPs in tech-focused VC 1
1 European Investment Fund
European Investment Fund
179
179
funds in Europe
funds in Europe 2 Finnish Industry Investment 28
2 Finnish Industry Investment 28
3 CDC Entreprises 26
3 CDC Entreprises 26
4 British Business Bank 20
45 British Business
AP-Fonden 6 Bank 18 20
56 Access Capital
AP-Fonden 6 Partners 16 18
7 LGT Capital Partners 15
6 Access Capital Partners 16
8 CDC Group 12
7 LGT Capital Partners 15
9 Pantheon 12
8 10 CDC Group
European Regional Development Fund 11 12
9 11 Pantheon
Bpifrance 10 12
12 Enterprise Ireland 10
10 European Regional Development Fund 11
13 European Bank for Reconstruction and Development 10
11 Bpifrance 10
14 Industry Pension Insurance 10
12 Enterprise Ireland 10
15 ARKimedes Managem ent 9
13 European Bank for Reconstruction and Development 10
14 Industry Pension Insurance 10
15 ARKimedes Managem ent 9

08.5 Diversifying the institutional investor base
There are very interesting differences between the LP bases supporting European
VC GPs in different sub-regions. Typically, the more mature the VC ecosystem in a
sub-region, the more the LP base diversifies towards private, institutional capital
There are very
and away from dependency interesting differences
on government agencies.between
Therethe LPalso
are bases supporting European VC GPs in different sub-region.
important
Typically,
differences in the level the morefund
of pension mature the VC ecosystem
commitments in a sub-region,
across the more
sub-regions. the LP base diversi es towards private,
On this
institutional capital and away from dependency on government agencies. There are also important differences in
front, the Nordics lead the way with pension funds accounting for 16% of total VC
the level of pension fund commitments across sub-regions. On this front, the Nordics lead the way with pension
funds raised since 2013, more thanfor
funds accounting 7x16%
theofEuropean average.
total VC funds raised since 2013, more than 7x the European average.
VC funds raised by GP region and LP type

(2013-2017)
UK & Ireland
LEG END
Government agencies
France & Benelux
Fund of funds
Corporate investors
Nordics
Endowments and foundations
Pension funds
DACH
Private individuals
Other asset managers (including PE houses other than
fund of funds) Southern Europe
Family o ces
Capital markets CEE
Sovereign wealth funds
0 20 40 60 80 100
Banks
% of funds raised (2013-2017)
Insurance companies
Academic institutions
Note:
30 September 2018.
The composition of LP types that invest in European VC funds is very different

to those that represent the largest sources of capital to European Buyout funds.
Most notably, where The composition
European VCsofare
LP types thatdependent
heavily invest in European VC funds is very
on government different to those that represent the largest
agencies,
sources of capital to European Buyout funds. Most notably, where European VCs are heavily dependent on
corporate investors and family offices, European Buyout funds are backed
government agencies, corporate investors and family o ces, European Buyout funds are backed primarily by
primarily by allocations fromfrom
allocations pension funds
pension fundsand
andsovereign wealth
sovereign wealth funds.
funds.
25.2%
Funds raised by fund type and LP type (2013- Government agencies
2.2%
2017)
15.2%
Corporate investors
1.4%
LEG END
13.6%
VC Funds Private individuals
4.3%
Buyout Funds
8.6%
Fund of funds
14.1%
Other asset managers (including PE 7.4%

houses other than fund of funds) 5.6%
6.7%
Pension funds
37.1%
6.2%
Family offices
4.9%
5.1%
Banks
3.9%
4.6%
Endowments and foundations
4.1%
3.7%
Insurance companies
9.7%
2.0%
Capital markets
0.5%
1.1%
Sovereign wealth funds
12.1%
0.7%
Academic institutions
0.1%
0.0 10.0 20.0 30.0 40.0

Share of funds raised (2013-2017)
Note:
Taken from the European Data Collective, developed by Invest Source:
Europe.

A material share of Europe’s VCs have experienced an increase in appetite amongst

LPs for investing inAEuropean venture. Corporate LPs, family offices and private
material share of Europe's VCs have experienced an increase in appetite amongst LPs for investing in European
individuals are leading the way, while
venture. Corporate pension
LPs, fundsand
family o�ces and endowments,
private foundations
individuals are leading the way, while pension funds and
and academic institutions appear to lag
endowments, foundations and academic institutions appear to lag
VC views on change in appetite of LPs for Corporate investors
European venture investment by LP type

Family Offices & Private HNW Individuals
(past 12m)
Government agencies (e.g. EIF)
LEG END
Increased appetite Insurance companies
Stayed the same

Fund of Funds
Decreased appetite
Sovereign Wealth Funds
Pension Funds
Endowments, Foundations & Academic

Institutions
0 20 40 60 80 100
% of respondents
Note:
Venture capitalist respondents only. Respondents who Source:
answered 'Not able to comment' �ltered out.
Of course, one reason for the difference in LP commitments is as simple as the scale
of the different asset classes. European Buyout funds typically raise 7-8x as much per
year as European VC Of funds
course,with
one reason
muchfor the difference
larger average in LP commitments
fund is asLP
sizes. As such, simple as the
types scale of the different asset
that
classes.requirements
have minimum allocation European Buyoutcanfunds typically
commit raise 7-8x
without theasconcern
much per of
year as European
being too VC funds with much larger
average fund sizes. As such, LP types that have minimum allocation requirements can commit without the
concentrated as anconcern
anchorofsource of funds for an individual fund manager.
being too concentrated as an anchor source of funds for an individual fund manager.
Funds raised by fund type per year 80.0

$75.5B
$71.8B
LEG END
Buyout Funds
60.0
VC Funds
$51.1B
Fund raised ($B)
$42.3B
40.0 $38.3B $37.5B
20.0
$9.5B $8.9B
$5.7B $6.9B
$4.4B $4.7B
0.0
2013 2014 2015 2016 2017 H1 2018
Note:
“ At Top Tier we’ve been investing in European venture capital funds

since our inception, but most were transatlantic. Currently, we see
We expect to be more a real opportunity with Europe-focused funds as returns improve,
valuations remain reasonable and the ecosystem develops. The
active in Europe through venture business is global, and we see a proliferation of highly
qualified and experienced European entrepreneurs and fund
investments in venture managers investing behind innovative technology and life science
capital funds, secondaries trends to build global businesses - just like what we see in the US. As a
result, we expect to be more active in Europe through investments in
and co-investments. venture capital funds, secondaries and co-investments.”
Lisa Edgar
Top Tier Capital Partners

Pension funds have committed 45x more capital to European Buyout funds than VC funds,
Pension funds have
Pension funds
committed 45x
have committed
more
45x
capital
moreEuropean
to European Buyout
capital to European
fundsthan
Buyout funds
thanVC
VCfunds,
funds, equivalent to around
equivalent
$75B. In fact, to around
European $75B.
VCs In
accountfact, VCs account for just 2% of theequivalent
total to around
capital
$75B. In fact, European VCs accountfor
forjust
just2%
2%ofofthe
thetotal
total capital committed
capital committed toEuropean
to European Buyout/VC
Buyout/VC funds
funds by by
committed
pension funds
pension
to European
since
funds 2013.
since 2013.
Buyout/VC funds by pension funds since 2013.
VC Funds
VC Funds BuyoutFunds
Buyout Funds VCVC
asas
%% of of Total
Total Commitments
Commitments to European
to European VCBuyout
VC and and Buyout Multiple
Multiple
($B)
($B) ($B)
($B) Funds
Funds (Buyout/VC)
(Buyout/VC)
Funds committed
Funds to VC
committed to and Buyout
VC and Funds
Buyout byby
Funds
LP type (2013-2017) Sovereign
Sovereignwealth
wealthfunds
funds 0.3
0.3 24.5
24.5 1%1% 90.1 90.1
LP type (2013-2017)
Pension
Pensionfunds
funds 1.7 75.6
75.6 2%
2% 45.2 45.2
Insurance
Insurancecompanies
companies 0.9 19.1
19.1 5%
5% 20.7 20.7
Fund
Fund ofoffunds
funds 2.2 28.6
28.6 7%7% 13.3 13.3
Endowmentsand
Endowments andfoundations
foundations 1.1
1.1 8.4
8.4 12%
12% 7.4 7.4
Family
Family ces
o o ces 1.6
1.6 9.9
9.9 14%
14% 6.4 6.4
Banks 1.3 7.8 14% 6.2
Banks 1.3 7.8 14% 6.2
Other asset managers 1.8 11.4 14% 6.2
Other asset managers 1.8 11.4 14% 6.2
Private individuals 3.4 8.3 29% 2.5
Private individuals 3.4 8.3 29% 2.5
Capital markets 0.5 1.1 29% 2.4
Capital markets 0.5 1.1 29% 2.4
Academic institutions 0.2 0.2 42% 1.4
Academic institutions 0.2 0.2 42% 1.4
Corporate investors 3.8 2.8 58% 0.7
Corporate investors 3.8 2.8 58% 0.7
Government agencies 6.3 4.6 58% 0.7
Government agencies 6.3 4.6 58% 0.7
Note: Total of the LP types 24.9 202.3 11% 8.1
Note: Other asset managers include PE houses other than fund of Total of the LP types 24.9 202.3 11% 8.1
Other funds. Data takeninclude
asset managers from thePE
European Data Collective,
houses other than fund of
developed by Invest Europe. EDC data converted at EUR:USD
funds. Data taken from the European Data Collective,
of 1.1605, the rate on 30 September 2018.
developed by Invest Europe. EDC data converted at EUR:USD
of 1.1605, the rate on 30 September 2018.
European Buyout funds raise from a diverse LP geographic

European Buyout funds raise from a diverse LP geographic footprint, but European VCs are
footprint, but European VCs are overwhelmingly backed from
overwhelmingly backed from Europe.
Europe.
Funds raised by fund type and LP region

(2013-2017)
VC Funds
LEG END
Europe
North America
Asia & Australia
Rest of the world Buyout Funds
0 20 40 60 80 100
% of funds raised by LP region
Note:
Europe. Total may not sum to 100% due to rounding.
LPs can now see that huge success can be found in Europe
but the challenge of staying locked up in a 5+5 year fund
cycle remains unattractive. We have to remember investors
don’t just compare VCs to other VCs, they have the option of
investing into any asset class.
“ We believe that investors need to see different structures rather

than just the constrictive 5+5 year limited partnership. This is driven
by many issues such as liquidity, access, flexibility in the market as
well as the need for longer term capital to build bigger companies
in Europe. LPs can now see that huge success can be found in
Europe but the challenge of staying locked up in a 5+5 year fund
cycle remains unattractive. We have to remember investors don’t
Simon Cook just compare VCs to other VCs, they have the option of investing into
Draper Esprit any asset class. More liquidity is also attractive to entrepreneurs,
who want to be able to reward employees for hard work in the face of
huge competition for talent.”

Great European
Companies
Success of a global stage 2018 has been a truly remarkable and record-breaking
year for outsized outcomes in the European tech
industry. Another 17 European companies hit billion-
dollar valuations, and three of the ten biggest venture-
backed public listings came from Europe, including that
of blockbuster Spotify. Doubts about the region’s tech
prowess have definitively been put to rest.
ARTICLES
09.1 Billion-Dollar Companies
09.2 Blockbuster European Tech IPOs
09.3 Spotify: Celebrating a European Milestone
09.4 The European Exit Environment

Billion-Dollar Companies
2018 set another record for the number of new European

2018 set another record for the number of new European tech companies to surpass a $1
tech companies to surpass a $1 billion+ milestone for the rst
billion+ milestone for
time. first time.
the
# of new and total $1B+ European tech

companies per year founded since 2003
LEG END 17
Existing
New in Year 8
9
44
36
8
29
4 20
12
2 8
1 1 1 1 1 1 4
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Note: Source:
$1B+ European tech companies founded since 2003
Europe saw a record number of tech companies hit a EUROPEAN $B+ TECH COMPANIES
$1 billion+ milestone for the first time in 2018
17
number of European tech companies that
first surpassed a $1 billion+ milestone in
2018, an all-time record for the region
$1 billion+ European tech companies have now emerged from

14 unique countries in the region, led by the UK, Germany and
Sweden
$1 billion+ European tech companies have now emerged from
$1 billion+ European14tech
unique companies
countries inhave now emerged
the region, from
led by the UK, 14 unique
Germany and countries in the
# of $1B+ European tech companies by
Sweden
region, led by the UK, Germany and Sweden
country of origin
UK 13 6
Germany 8 3
LEG
# ofEND
$1B+ European tech companies by UK 13 6
country
Existingof origin
$1B+ companies Sweden 6 1
Added in 2018 Germany 8 3

LEG END Netherlands 2 2
Existing $1B+ companies Sweden 6 1

Russia 4
Added in 2018
Netherlands 2 2
Denmark 2 1
Russia 4
France 3
Denmark 2 1
Finland 2
France 3
Ireland 1 1
Finland 2
Spain 1 1
Ireland 1 1
Estonia 1
Spain 1 1
Romania 1
Estonia 1
Slovenia 1
Romania 1
Switzerland 1
Slovenia 1
Note: Source:
Switzerland 1
$1B+ European tech companies founded since 2003.
Note: Source:
$1B+ European tech companies founded since 2003.

The gripe used to be that Europe had yet to prove

it could be home to multiple $1 billion+ businesses.
We have decisively put that question to rest.
The gripe used to be that Europe had yet to prove it could be home to
multiple $1 billion+ businesses. We have decisively put that question
to rest. Momentum has accelerated, and now we are able to regularly
build businesses that surpass the $5 billion+ threshold and have
produced two in the $15 billion+ range. However, what we are missing
“ still is an iconic and enduring category leading business, based in
Europe that has scaled globally and is valued over $50 billion. I do
Sonali de Rycker believe this too is just a matter of time.”
Accel
European founders have built huge businesses in a wide

European foundersrange
haveofbuilt huge businesses in a wide range of categories
categories
# of $1B+ European tech companies founded Software for Enterprise Apps 14
since 2003 Financial Services 11
LEG END Retail 9
# of $1B+ companies
Interactive Entertainment 8
Travel & Transportation 6
Social & Consumer Apps 5
Food and Drink 3
Real Estate 3
Adtech 1
Healthcare 1
Note: Source:
$B+ European tech companies founded since 2003
The 2010s have already produced 15x more $1B+ companies by Year 8 (2018) of the
decade compared to the equivalent point (2008) of the 2000s. The cohort from that
earlier decade grewThe 2010s
from have
2 in already
2008 to 31produced 15x more
today. Based $B+
on companies
a similar by Year 8 (2018)
expansion of theof the decade compared to the
equivalent point (2008) of the 2000s. The cohort from that earlier decade grew from 2 in 2008 to 31 today. Based
cohort from the 2010s, it’s not far from unrealistic to imagine 30 companies today
on a similar expansion of the cohort from the 2010s, it's not far from unrealistic to imagine 30 companies today
from this decade growing
from thisto moregrowing
decade than 100.to more than 100.
# of European tech companies by founding

100
year decade that had reached a $1B+ 100
milestone by Year 8 and Year 18 of the decade
# of $1B+ European tech companies
(Year 18 for 2010s cohort illustrative only)

75
LEG END
2000s
2010s 50
30 31
25
2
0
Year 8 Year 18
Note:
$1B+ European tech companies split by the decade of the
founding year. The 100 number shown for Year 18 of the 2010s is Source:
illustrative only.

Europe is now consistently producing companies exceeding

Europe is now consistently producing companies exceeding $5B+ in value
$5B+ in value
# of $1B+ European tech companies by latest

valuation $1B+ 49
LEG END
# of $1B+ companies
$5B+ 7
$10B+ 5
0 5 10 15 20 25 30 35 40 45 50 55
# of $1B+ companies
Note:
$1B+ European tech companies founded since 2003. Latest Source:
valuation as of 31 October 2018.
Europe is now producing $1B+ tech companies at a EUROPEAN $B+ TECH COMPANIES
rate that is greater than an order of magnitude higher
15X
than the last decade increase in the number of $1B+ companies
founded per decade that hit a $1B+ by Year
8 of this decade (2010s) compared to Year 8
of the last decade (2000s)
Europe’s $1B+ tech companies are finding shareholder liquidity via IPOs and M&A and
Europe's $B+ tech companies are nding shareholder liquidity via IPOs and M&A and helping to release capital &
helping to release capital & experienced talent back into the ecosystem
experienced talent back into the ecosystem
# of $1B+ European tech companies by

ownership status Private 28
LEG END
Ownership status
Public 23
Acquired 10
0 5 10 15 20 25 30
# of $B+ European tech companies
Note:
$1B+ European tech companies founded since 2003. Latest Source:
ownership status as of 31 October 2018.

Blockbuster European Tech IPOs
2018 has been a truly remarkable and a record-breaking year for outsized outcomes in the
European tech industry, capped by Spotify’s giant $25B direct listing.
Country
Country City City Amount Amount
raised ($M)
raisedValue
($M)at IPOValue
($M) at IPO ($M)
TopTop 10 largest
10 largest VC-backedIPOs
VC-backed IPOsby
by market
market cap
cap Spotify
Spotify Sweden
Sweden Stockholm 9,200
Stockholm 9,200 26,500 26,500
at exit
at exit in 2018
in 2018 Adyen Netherlands Amsterdam 1,045 7,810
Adyen Netherlands Amsterdam 1,045 7,810
Farfetch United Kingdom London 885 5,800
Farfetch United Kingdom London 885 5,800
Avast Software Czech Republic Prague 195 3,168
Avast Software Czech Republic Prague 195 3,168
Elastic Netherlands Amsterdam 252 2,500
Elastic Netherlands Amsterdam 252 2,500
Funding Circle United Kingdom London 396 1,980
Funding Circle United Kingdom London 396 1,980
Home24 Germany Berlin 165 660
Westwing
Home24 Germany
Germany Munich
Berlin 145
165 605
660
Westwing
Navya Germany
France Munich 38
Villeurbanne 145 190 605
Navya
Marley Spoon France
Germany Berlin Villeurbanne
51 38 145 190
Marley Spoon Germany Berlin 51 145

Source:
Source:
Europe has delivered more large tech IPOs in 2018 EUROPEAN TECH IPOS
than the US
4X $5B
Number of European tech IPOs
with an enterprise value of more
than $5B in 2018, versus just one
from the US
As we have demonstrated in previous iterations of the State of European Tech,

there are more tech IPOs per year from Europe than the US. There are many
reasons that underpin this long-standing trend, but it is best summarised by the
fact that there are completely different characteristics that shape the environment
The number of tech IPOs from European companies has
around access to thesteadily increased, farfor
public markets tech companies.
surpassing the US
# of tech IPOs by region 69

70
63
LEG END
60
Europe
# of tech IPOs by region
US 49
50
43
41
40
34
29 30
28 28
30
20
20
10
2013 2014 2015 2016 2017 2018 9M
Source:

“ Since 2014, European tech companies have IPO’d at rates far

exceeding that of US tech companies – European markets, like
European tech has London’s AIM, are structured to support tech listings of all sizes,
and Europe’s public market investors back them. But as Europe has
arrived, and whether stretched its lead with smaller caps, 2018 also heralded the arrival of
a series of long awaited, high profile listings, all well in excess of $1bn
they’re valued in tens of in market cap, and a surge of Fintech companies on public markets.
millions or tens of billions, European tech has arrived, and whether they’re valued in tens of
millions or tens of billions, they bust the myths about European tech
they bust the myths about with each new listing.”
European tech with each James Clark

London Stock Exchange
new listing.
In the US, for example, most tech IPOs tend to be sponsor-backed. This means there are
financial investors, whether VCs or PE funds, that play a ‘sponsoring’ role in bringing these
companies to the public market. While the numbers of sponsor-backed tech IPOs per
region are similar in Europe and the US, because Europe sees far more IPO, the percentage
share of European tech IPOs that are ‘sponsored’ are typically lower, which is a reflection of
The number of sponsor-backed tech IPOs is stable both in
a greater diversity in types
Europe ofthe
and companies
US that have access to public markets.
# of sponsor-backed tech IPOs by region 15

14
LEG END
Europe
# of sponsor-backed tech IPOs
11
US 10 10 10
10
9
8 8
7
6
3 3
0
2013 2014 2015 2016 2017 2018 9M
Source:
European tech IPOs far exceed those in the US by volume due to the fact that European
capital markets areMany more European tech SMEs choose to go public
supportive of enabling companies of all sizes by enterprise value,
indicating Europe's supportive listing environment for earlier
whether $1B+ or sub-$100M, to
stage companiescome to market.
# of tech IPOs with less than $1B market cap 62
at IPO by year and region

# of tech IPOs with less than $1B market cap at IPO
60 56
LEG END 50 46
Europe
US 40 36
29 28
30
23
20 16 15 15
11
10
0
2013 2014 2015 2016 2017 2018 9M
Source:

Smaller cap European tech companies make up the majority of European tech
companies, a reflection of the fact that founders of European tech companies
take advantage of the fact that there are many different paths to raising the
capital required to The
support and
US still grow
have theirmore
two times companies.
$1B+ exits than Europe
# of tech IPOs with $1B+ market cap at IPO by

17
year and region
# of tech IPOs with $1B+ market cap at IPO

15 15
15
LEG END
Europe
12
US 11
10
10
7 7
5 5
5
0
0
2013 2014 2015 2016 2017 2018 9M
Source:
“ The advantage of European startups is that they have an aptitude

for complexity in their DNA. This comes from looking at various
The advantage of markets, making sure their intellectual property is protected
internationally, and approaching customers with a multicultural
European startups is that focus. The nimbleness of European startups - which comes from
not having as much capital chasing them as U.S. startups - has also
they have an aptitude for taught them well what the essentials of their business are and how
complexity in their DNA. to be customer facing.”
Natalie Massenet
Imaginary Ventures
Europe’s notably strong performance in terms of delivering its largest ever crop
of large-cap venture-backed European tech IPOs has also been followed with
European tech IPO vintages have been able to compete with
strong weighted aftermarket
Americans inperformance.
aftermarket performance
Weighted aftermarket performance of Tech 222%
IPOs by vintage year (%)

200
Weighted aftermarket performance
LEG END 165%

Europe 149%
150
US
100% 100% 100%

100
64%
39% 42%
50
0
2013 2014 2015 2016 2017 2018 9M
Source:

Questions are often raised about the sophistication of institutional investors in the
European capital markets and their ability and willingness to invest into tech. The data
shows very clearly, however, that there is a strong pool of European investors that have
built deep and sophisticated understanding of tech by having built large portfolios of
holdings in global tech companies.
Parent
Parent # of#Global Tech
of Global companies
Tech theythey
companies invest in in
invest
Top
Top1010European
EuropeanInvestors inin
Investors global tech
global tech Graubundner Kantonalbank
Graubundner (Private
Kantonalbank Banking)
(Private Banking) Graubundner Kantonalbank
Graubundner Kantonalbank 1 748
1 748
companies
companies
Norges Bank
Norges Investment
Bank Management
Investment Management Government of Norway
Government of Norway 1 746
1 746
DWS Investment
DWS GmbH
Investment GmbH Deutsche Bank
Deutsche AG AG
Bank 1 657
1 657
Deutsche Asset
Deutsche Management
Asset (UK)
Management Ltd.
(UK) (Investment
Ltd. Management)
(Investment Management) Deutsche Bank
Deutsche AG AG
Bank 1 394
1 394
Legal & General

Legal Investment
& General Management
Investment Ltd.
Management Ltd. Legal & General
Legal Group
& General Plc Plc
Group 1 3111 311
UBS Asset
UBS Management
Asset (UK)
Management Ltd.
(UK) Ltd. UB UB
S Group AG AG
S Group 1 264
1 264
Credit Suisse
Credit AGAG
Suisse Credit Suisse
Credit Group
Suisse AG AG
Group 1 259
1 259
Zurcher Kantonalbank
Zurcher (Investment
Kantonalbank Management)
(Investment Management) State of Zurich
State of Zurich 1 248
1 248
UBS AGAG
UBS (Investment Management)
(Investment Management) UBS Group
UBS AG AG
Group 1 1991 199
Barclays Bank
Barclays PlcPlc
Bank (Private Banking)
(Private Banking) Barclays PlcPlc
Barclays 1 038
1 038
Source:
Source:
Ownership in European public tech companies is more widely distributed than in their
counterparts in theOwnership in European public tech companies is more widely
US and China
distributed than in their counterparts in the US and China
Average free oat for tech issuance by year 35 34%

33% 33%
and region 32%
31%
30%
LEG END
30
Europe
Average ee oat %
USA
China
25 24% 24%
23%
22%
21% 21%
20%
20 19%
18%
17%
15
2013 2014 2015 2016 2017 2018 9M
Source:
European founders need to adopt a moonshot

mentality if they are to build the next Google or
Amazon. There is no playing it safe.
European founders need to adopt a moonshot mentality if they are

to build the next Google or Amazon. There is no playing it safe. As
a founder you need to show investors that you’re passionate, that
you have the drive to make it happen, and that you understand the
market from a global perspective. Don’t obsess about building the
“ perfect product – start shipping, and figure things out as you go.
Lastly, the best founders will have a strong sense of purpose and a
Jacob de Geer vision that guides their company through the difficult moments –
iZettle there will be many!”

Spotify: Celebrating a
European Milestone
Spotifiers are founding, building and investing in a

new generation of European tech companies
Founder
Investor
Builder
Note:
This is just a small selection of
former Spotifiers that are now
helping to build or invest in a
new generation of companies.
Due to constraints, it is not
intended to be complete.
“ Spotify is truly a game changer for the entrepreneurial ecosystem

Spotify is truly a game changer for the across all of Europe. With a relentless focus on doing things better
entrepreneurial ecosystem across all and differently, they successfully outcompeted even giants such as
Apple, Google and Amazon. The direct listing was another example
of Europe. With a relentless focus on of Spotify’s famous out of the box thinking. Having concluded that
the traditional and outdated way to IPO wasn’t optimal neither for the
doing things better and differently, they company nor its shareholders and prospective shareholders, they
successfully outcompeted even giants embarked on a course few other companies would have dared - and
succeeded.
such as Apple, Google and Amazon.
The founders Daniel Ek and Martin Lorentzon had decided already at
the get go on April 1, 2006 to go big or go home. They were successful
entrepreneurs already then and managed to attract the best talent
around when they set out to disrupt a notoriously difficult industry
Pär-Jörgen Pärson that had already claimed a number of startup casualties. They
Northzone respected the rights-holders and managed to convince an industry to
change its business model over a period of five years.
Today, the music business is as healthy as ever, and Spotify enabled

that change.
I am so grateful and humbled to have played a role as first institutional

investor and board member over 9 years in a seminal company.”

The European Exit
Environment
2018 has been a truly remarkable and a record-breaking year for outsized outcomes in the
European tech industry, capped by Spotify’s giant $25B direct listing
20182018
has has
been a truly
been remarkable
a truly remarkableand
and aa record-breaking
record-breaking year year
forfor outsized
outsized outcomes
outcomes in theinEuropean
the European tech industry,
tech industry,
capped by Spotify's
capped giant
by Spotify's $25B
giant $25Bdirect
direct listing. Intotal,
listing. In total,the
the Top
Top 10 10 exits
exits of 2018
of 2018 had ahad a combined
combined ofthan
of more more than $50B.
$50B.
Exit type
Exit type Country
Country City City Value at Value
IPO / EV
atinIPO
M&A ($M)
/ EV in M&A ($M)
Top 10Top 10 largest
largest VC-backed
VC-backed exits
exits byby valueatat
value Spotify
Spotify IPOIPO Sweden
Sweden Stockholm 26,500 26,500
Stockholm
exit inexit in 2018,
2018, IPO &IPO & M&A
M&A Adyen IPO Netherlands Amsterdam 7,810
Adyen IPO Netherlands Amsterdam 7,810
Farfetch IPO United Kingdom London 5,800
Farfetch IPO United Kingdom London 5,800
Avast Software IPO Czech Republic Prague 3,168
Avast Software IPO Czech Republic Prague 3,168
Zoopla M&A United Kingdom London 2,904
Zoopla M&A United Kingdom London 2,904
Elastic IPO Netherlands Amsterdam 2,500
Elastic IPO Netherlands Amsterdam 2,500
iZettle M&A Sweden Stockholm 2,200
iZettle Circle
Funding IPOM&A Sweden
United Kingdom LondonStockholm
1,980 2,200
Funding Circle
Mendix IPO
M&A United Kingdom
Netherlands London 730
Amsterdam 1,980
Trendyol
Mendix M&A
M&A Turkey
Netherlands Istanbul 728
Amsterdam 730
Trendyol M&A Turkey Istanbul 728

Source:
Source:
Country
Country City City EV ($M)EV ($M)
Top 10Top 10 largest

largest VC-backed
VC-backed M&AM&A exits
exits bybyvalue
value Zoopla
Zoopla United Kingdom
United KingdomLondon
London 2,904 2,904
at exitatinexit
2018in 2018
iZettle Sweden Stockholm 2,200
iZettle Sweden Stockholm 2,200
Mendix Netherlands Amsterdam 730
Mendix Netherlands Amsterdam 730
Trendyol Turkey Istanbul 728
Trendyol Turkey Istanbul 728
CCP Games Iceland Reykjavik 425
CCP Games Iceland Reykjavik 425
Shazam United Kingdom London 400
Shazam United Kingdom London 400
NewVoiceMedia United Kingdom Basingstoke 350
NewVoiceMedia Germany
Relayr United KingdomBerlinBasingstoke
300 350
Relayr
Gram Games Germany
Turkey Berlin
Istanbul 250 300
MetaPack
Gram Games United Kingdom
Turkey London
Istanbul 230 250
MetaPack United Kingdom London 230

Source:
Source:

Building on top of several large European tech IPOs, Europe has also seen
significant exit value via M&A in 2018. Multibillion-dollar acquisitions, such as
Building
iZettle’s $2B+ sale to PayPal,on top of several
have helpedlarge European
to drive tech IPOs,
the total valueEurope hasof
of M&A also seen signi cant exit value via M&A in 2018.
VC-
Multi-billion acquisitions, such as iZettle's $2B+ sale to PayPal, have helped to drive the total value of M&A of VC-
backed European tech companies to $31B in the first nine months of 2018.
backed European tech companies to $31B in the rst nine months of 2018.
European M&A exit value ($B) and count by DATASET: EXIT VALUE
company type (VC-backed or not) 120
LEG END
VC-backed exit value
Non-VC-backed exit value
61
52
45
35
Building on top of several large European tech IPOs, Europe has also seen 32
signi cant exit value
25
via M&A31in 2018.
Multi-billion acquisitions, such as iZettle's $2B+12 sale to PayPal,
19
have helped to drive the total value of M&A of VC-
backed European tech companies to $31B in the rst nine months of 2018.
2013 2014 2015 2016 2017 2018 9M
European M&A exit value ($B) and count by

company type (VC-backed or not) DATASET: EXIT COUNT
DATASET: EXIT CO UNT 584
543 552
LEG END
VC-backed exit count
Non-VC-backed exit count
303
256 268 259
243
159
142 135
94
2013 2014 2015 2016 2017 2018 9M

Note:
Note:
M&A exit value based on total enterprise value of all
M&A exit transactions
tracked value based on total enterprise value of all tracked
transactions
Strong activity in M&A of VC-backed European tech companies has been

underpinned by a record number of acquisitions with an enterprise value of more
than $500 million atA exit,
strongasforwell
M&Aas
ofrecord
VC-backed European
numbers oftech companiesof
acquisitions has been underpinned
European VC- by a record number of
acquisitions with an enterprise value of more than $500M at exit, as well as record numbers of acquisitions of
backed companiesEuropean
acquiredVC-backed
for between $250 million and $500 million.
companies acquired for between $250M and $500M.
DATASET: DISCLOSED EXIT VALUE

VC-backed M&A exit count by deal size
50
LEG END 45
41 42
$0-$100M
$100-$250M 40
$250-$500M
$500M+ 30
# of deals
24 25
19
20 17
13 14
11 11
9 9
10 5 6 7
A strong for M&A of VC-backed European tech companies has been underpinned5by a record 4 number of
acquisitions with an enterprise value of more

0
than $500M at exit, as well
1
as record numbers of acquisitions of
European VC-backed companies acquired for between2013 $250M
2014 and $500M.
2015 2016 2017 2018 9M
LEGE ND
DATASET: UNDISCLOSED EXIT VALUE
103
Undisclosed
100
75 65
# of deals
50
36
20 23
25
12
0
2013 2014 2015 2016 2017 2018 9M

Contrary to the popular but false narrative that European tech companies exit
primarily to US-based buyers, the share of M&A transactions of European tech
Contrary
companies that involved to the popular,
European but false
acquirers narrative that
exceeded moreEuropean techof
than 50% companies
all M&A exit primarily to US-based buyers, the
share of M&A transactions of European tech companies that involved European acquirers exceeded more than
transactions in 2018, as it has done in each of the past four years.
50% of all M&A transactions in 2018, as it has done in each of the past four years.
100
Share of M&A exits by buyer region by year
LEG END
75
Europe
# of deals stacked to 100%

USA and Canada
Asia
Other (incl. unknown buyer counry) 50
25
0
2013 2014 2015 2016 2017 2018 9M
Note:
Only VC-backed deals included. 2018 numbers estimated by Source:
Dealroom.co.
Europe’s traditional companies continue to look at M&A as a strategy to accelerate

Europe's
their response to thetraditional
digitizationcompanies
of their corecontinue
industries toand
lookinat M&A as
several a strategy
cases took to accelerate their response to the
digitization
material bets of more thanof their
Europe's
$500M.core
traditional
Theindustries
companies and in
continue
largest single to several cases
look at
acquisition M&A as a took material
strategy
in 2018 to
involved bets
accelerate ofresponse
their more than $500M. The large
to the
digitization of their core industries and in several cases took material bets of more than $500M. The largest single
Richemont’sacquisition
completion inof
2018
the involved
100% Richemont's
acquisition of completion
digital commerce of company,
the 100% acquisition of digital commerce compan
acquisition in 2018 involved Richemont's completion of the 100% acquisition of digital commerce company, Yoox
Net-a-Porter,
Yoox Net-a-Porter, for anforimplied
for an implied
Net-a-Porter, enterprise
an enterprise
implied value
value ofvalue
enterprise more of $6B.
of than
$6B. $5B.
Acquiror Acquiror
Date EV Date
($M) EV ($M)
Largest acquisitions of European tech
Largest acquisitions of European tech Yoox Net-a-Porter
Yoox Net-a-Porter
Richemont
Richemont
May 2018 5,500
May 2018 5,500
companies by European non-tech companies
companies by European
in 2018, by EV non-tech companies Mendix Siemens Aug 2018 730
in 2018, by EV Mendix Siemens Aug 2018 730

Payvision ING Group Mar 2018 528
Payvision
relayr Munich ReING Group
Sep 2018 Mar 2018
300 528
Tails Nestlé Apr 2018 192

relayr Munich Re Sep 2018 300
Chargemaster BP Global Jun 2018 166
Tails Nestlé Apr 2018 192
FreeAgent RBS Mar 2018 75
Chargemaster BP Global Jun 2018 166
Source:
FreeAgent RBS Mar 2018 75
Source:
Photo: Samuli Pentti

Challenges
Priorities for Despite the region’s blockbuster year, European tech
faces challenges. The journey for founders is still
convoluted, diversity lags, and institutional capital must
European Tech be more accessible. Finally, Europe needs to unlock
research potential, and tech and policymakers must
align more effectively.
ARTICLES
10.1 There’s Lots to Overcome

There’s Lots to Overcome
This year’s report is another strong indication of the upward trend

in European tech. There is much to celebrate, but the report also
highlights some obvious challenges we need to address if we are to
continue the progress of the past decade.
Prioritise diversity and Europe’s diversity and inclusion in any meaningful way in recent years.
challenges are stark. Just 4% of VC The result: Europe has lost untold
inclusion funds go to female or mixed gender talent and value due to these issues.
teams in Europe. The level of funding to This is not somebody else’s problem. It
other underrepresented groups is even is our problem. Why are we not taking
lower. Those numbers have not budged more positive action?
Mobilise hidden talent pools There are at least 15 cities across most cases. By contrast, Stockholm,
Europe that have more than 50,000 which has around 80,000 professional
professional developers but have seen developers, has attracted almost $5B
less than $1B in total capital investment over that period. How can we get all of
since 2013 and less than $500M in those cities to punch at that level?
10x pension fund Pension funds have committed just European VC is now competitive with
$2.4B to European VCs in aggregate US VC and European private equity.
commitments to European since 2013, equating to less than $500M How can we educate and create the
VC per year. This equates to just 0.01% of right incentives and allocation models
total European pension fund assets to entice more pension funds to
under management of around $4 support a European VC ecosystem?
trillion. All of that despite the fact that
Build density through Europe’s ecosystem is unique in its flows across borders and 28% of
geographic diversity. In response to Europe’s founders and employees have
interconnectivity this, the region’s interconnected hubs also moved across hubs. How can we
are achieving density in a uniquely strengthen this interconnectivity even
European way. More than a third of all further?
investments by European VC already
Lose the inferiority complex There is no better proof that European never deviated from its long-term vision
tech companies can compete on the despite untold distractions. And they
global stage than Spotify. It is hard to still ended up as the global category
think of a company anywhere that has leader and a trusted consumer brand
had to fight fiercer competition from the world over. What can we learn from
the world’s largest tech companies and Daniel and his team?

10.1 There’s lots to overcome
Build an investor base to The transformation of the European have access to the same capital and
investor base into a deep and advice as those in London, Paris or
target underrepresented increasingly sophisticated network Berlin. This means a new generation
communities of interconnected sources of funding of sophisticated investors in new
has elevated European tech to geographies and explicitly seeking to
another level. But the job is not close invest in diverse groups of founders.
to being finished. Europe’s challenge What can we do to help incentivise
is to identify and support emerging and support this next generation of
fund managers and angels that can investors?
target the communities that do not
Bridge the tech and policy European tech leaders and and help strengthen the European tech
policymakers want to work more closely ecosystem. How can we build a bridge
divide to harness tech for together, but they are still speaking to create a European tech ecosystem
good across each other today. If aligned that is working in concert with its
more closely we could create better policymakers to unlock the potential of
products and services for consumers using tech for good?
Stop living in the past and People still talk about Europe like it region of multiple democratic countries
can’t do tech. And for sure, Europe and languages. We need to throw away
drop the cliches has historically not created as much disparaging clichés about European
enterprise value from tech as the US tech. Europe’s tech ecosystem is
and China. That isn’t surprising. The US flourishing and rapidly gaining ‘market
tech ecosystem has a 30-year headstart share’ on the global stage. If we can’t
on the European ecosystem. China is a stop talking about the past, how can we
closed market with heavy government focus on the future?
support which cannot be replicated in a
Compensate talent and Europe’s biggest challenge, arguably, back from overseas. Europe now
remains a shallow pool of executive offers compelling opportunities to
bring it to Europe level talent with experience scaling tech join amazing companies, but needs to
companies to thousands of employees, align compensation to compete with
millions of users and billions of revenue. benchmarks elsewhere. What can
The ecosystem is, therefore, reliant Europe do to help incentivise talent
on attracting global talent to Europe more effectively?
or to luring home European talent
Prioritise diversity and This challenge is so great, it should be and stakeholders even if it solves all the
Europe’s first and most urgent priority. other challenges. Some people have
inclusion If Europe fails to make meaningful started to make a difference. Diversity
progress on this, it will still be unable VC has created a toolkit for founders
to reach its full potential in terms of to address diversity and inclusion. So,
creating value for consumers, business what are you doing?

Mythbusting
Don’t Bring Anecdotes #fakenews about European tech? We put those
myths to rest.
to a Data Fight
ARTICLES
11.1 Myths Aplenty Around European Tech
11.2 2018 Mythbusting

Myths Aplenty Around
European Tech
Those working withinwithin

Those working the European techtech
the European ecosystem
ecosystemregularly
Those working within theaEuropean tech ecosystem regularly
encounter a large
regularly number
encounter oflarge
myths about
number ofwhat
myths is happening
about
encounter a large number of myths about what is happening
what
in the region is happening in the region
in the region
Biggest myth by SOET region Baltics

Biggest myth by SOET region Baltics
DACH
LE GE ND
DACH
L E G END Lack of Ecosystem
France & Benelux
Capital Availability
Lack of Ecosystem
Global Competitiveness France & Benelux
Nordics
Market Fragmentation
Global Competitiveness
Slow Moving Rest of Europe Nordics
Not Innovative
Southern Europe
Talent Availability
Slow Moving Rest of Europe
Overly Regulated
UK & Ireland
Not Innovative
Diversity
Southern Europe
Talent Availability
Startup Unfriendly 0 10 20 30 40 50 60 70 80 90 100
% of respondents
Overly Regulated
UK & Ireland
Diversity
Source:
Startup Unfriendly 0 10 20 30 40 50 60 70 80 90 100
% of respondents
Note:
Based on respondents that gave explicit responses only Source:
Note:Founders and investors are aligned that the biggest

myths
Founders andare the lackare
investors of an ecosystem,
aligned that thethebiggest
level of myths are the lack of an ecosystem, the level of capital
Based on respondents that gave explicit responses only
Founders and investors are aligned that the biggest myths are the lack of an ecosystem, the level of capital
capital availability and its global
availability and its global competitiveness competitiveness
availability and its global competitiveness
15%
What, in your opinion, is the biggest myth you Lack of Ecosystem 15%
Lack of Ecosystem 18%
What, in regularly
your opinion, is the biggest myth you
encounter about the state of the 14% 18%
Global Competitiveness
12% 14%
regularlyEuropean
encounter tech about the state of the
ecosystem? Global Competitiveness
14% 12%
European tech ecosystem? 17%
14%
LE GE ND Capital Availability
12%
17%
Founder or startup/scale-up employee Slow Moving 11% 12%
L E G END Market Fragmentation
Investor 9%
Talent Availability
Founder or startup/scale-up employee Slow Moving 8% 11%
Overly Regulated 9%
Investor 4%
9%
Talent Availability 8%
Not Innovative 8%
13%
Overly
DiversityRegulated
5% 9%
4%
4%
Startup Unfriendly 8%
Not Innovative
13%
0 3 5 8 10 13 15 18 20
5%
Diversity % of respondents
Startup Unfriendly 4%
Source:
0 3 5 8 10 13 15 18 20
% of respondents
Note:
Founder and investor respondents only. Based on respondents
that gave explicit responses only Source:
Note:
Founder and investor respondents only. Based on respondents
that gave explicit responses only

2018 Mythbusting
Europe is irrelevant as its share of public tech

market cap versus the US and China is small
Busted: If you choose to look at all the data, then yes, the market cap of public
European tech companies make up just 8% compared to the market caps of US and
Chinese tech companies.
Busted:However, given
If you choose that
to look at most
all the the
data,US companies’
then market
yes, the market cap
cap of is European tech companies make up
public
taken up by just fivejust
companies
8% compared (Alphabet, Amazon,
to the market caps of Apple,
US andFacebook
Chinese techand Microsoft)
companies. However, given that most the US
and most of them are companies’
over 20market
years cap
old,isittaken up bybetter
is much just vetocompanies
look at the (Alphabet,
marketAmazon,
caps Apple, Facebook and Microsoft) and
of those public tech companies founded after 2006 if you want to understand the caps of those public tech companies
most of them are over 20 years old, it is much better to look at the market
founded after 2006 if you want to understand the direction of future travel. Once you do that, then Europe begins
direction of future travel. Once you do that, then Europe begins to punch a lot harder.
to punch a lot harder.
68%
Share of total market cap of public Internet &
Software companies by region
60
% of total market cap
L EG END 47%
All public tech companies
40
All public tech companies founded since 2006 33%
23%
21%
20
8%
0
China Europe US
Note:
Share of total public Internet & software market cap by region
and cohort. % distribution based on share of total value of US,
China and Europe. Total may not sum to 100% due to rounding. S&P Global Market Intelligence
All the best European founders want to

move to Silicon Valley
It's often said that European founders 'all want to move to the Valley'. This is not what the data shows. Only 6% of
The overwhelming European
majority founders
of European
wouldfounders do and build their company in Silicon Valley if given the chance to start
choose to found
not feel the allure of moving
over again. to Silicon Valley
If you were to start over, where would you I would stay where we are now 63.9%
choose to found and build your company?
A different European city 19.3%

LE GE ND
% of founders
Silicon Valley/Bay Area 6.2%
Somewhere else (e.g. Asia) 3.7%
Other (please specify) 3.6%
A different US city (not Silicon Valley/Bay

3.0%
Area)
0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0

% of respondents
Note:

11.2 Mythbusting
European tech founders don’t understand

how to use stock options
Busted: European tech companies have historically lagged behind those from the US in
their use of stock options as an effective tool to attract, incentivise and retain talent.
However, looking at Advanced-HR’s latest employee ownership survey, there are signs that
the latest generation of companies from Europe are now properly rewarding their most
talented executives and employees. While there is likely sample bias because most founders
who participate in the survey are likely to a) understand the issue more and b) be better at
remunerating their employees, it is a positive sign. There is still work to do but thanks to
leading European VCs, such as Index Ventures and Balderton, more founders are starting to
take this issue seriously and the rest will hopefully follow suit. European governments need
to pay attention too and ensure the implementation of progressive policies around use of
stock options do not lag behind this evolved attitude among European founders. If you support
enabling more effective use of stock options to incentivize talent in Europe, we recommend
The average level of employee ownership by funding round
checking out the Not Optional
stage initiative
is broadly similar inatEurope
www.notoptional.eu.
compared to the US
20.0
Employee ownership by funding round stage
in 50th percentile by region
LEGEND 15.0
Executives (Europe)
% of ownership
Executives (US)
Staff + Other (Europe) 10.0
Staff + Other (US)

Unissued (Europe)
Unissued (US) 5.0
0.0
Note: Europe US Europe US Europe US Europe US
This details equity held by executive-level employees, staff- Seed Series A Series B Series C
level employees and remaining unissued options. It excludes
Founder’s Shares and equity allocations displayed as a
percentage of fully diluted shares. Equity not related to salary
nor incentives
GDPR has been a disaster for all concerned

The European tech community actually takes a surprisingly positive view on
the impact of GDPR, especially in terms of whether it has been a good thing for
European consumers. There is a more nuanced perspective on whether it has had
Importantly, however, there is a very strong majority agreement across the board from all stakeholder types that
a negative impact on
GDPR hasown
their beencompanies, butEuropean
a good thing for if it is generally seen
consumers. Oneas positive
might for
say, therefore, that any perceived negative
consumers then it’simpact
possible to argue it is a necessary cost to scale ethically.
for companies is a justi able cost of scaling more ethically

consumers
DATAS E T : A L L RE S P O ND E N TS
L E GE ND
Agree All respondents

Disagree
0 10 20 30 40 50 60 70 80 90 100
% of respondents

Predictions
What’s Coming Next We explore how some of last year’s predictions played
out, and give our forecasts for European tech in 2019.
ARTICLES
12.1 What We Got Right and Wrong Last Year
12.2 Predictions for 2019

What We Got Right and Wrong
Last Year
In last year’s report, we made some predictions about

what 2018 would hold for European tech
It would be a bit cheeky of us not to look
back at them and see how we did...
So, er, how did we do?
2017 Prediction
Founders will come to see regulation as a source of
potential competitive advantage
The ‘move fast and break things’ Cycles, Kry or Babylon in the healthcare
mentality has never sat well with heavily market. They are all early examples
regulated markets. As founders realise of companies that have embarked
they can gain an advantage through upon - and come out on the other
regulatory compliance, it will go from side of - lengthy regulatory approval
being seen as a perceived handcuff processes to gain an advantage on their
to being seen as a potential source of competitors.
competitive advantage. Think of Natural
We totally got this right!
Mark: 1/1 This trend came through hard and fast

in 2018 across numerous industries.
Netherlands respectively. Perhaps the
strongest example of the change in
Financial services has long since founder attitudes towards regulation,
been an industry where venture- however, has come in the emerging
backed companies, such as N26 and micro-mobility market. European
Monzo, actively leveraged their fully micro-mobility startups such as VOI and
licensed banking status to strengthen Tier have explicitly pointed to their pro-
their market positions. In the digital regulation approach as a key source of
health space, messaging-centric competitive advantage as they seek
applications such as Forward Health to capture the hearts and minds of
and Siilo have overcome barriers to European consumers and policymakers
become powerful new services in their and to steal a march on US players
local health systems in the UK and entering the European markets.

A venture-backed European tech startup will exit for a $B+

to a traditional non-tech European giant
Non-tech European corporates have millions (for example, BNP Paribas and
already made billion-dollar tech Compte Nickel). This will change in 2018
acquisitions (Anglo-Dutch Unilever as European non-tech corporates put
picked up Dollar Shave Club), but some of their combined $1.5 trillion
acquisitions within Europe have cash holdings to work.
typically been in the hundreds of
We...sort-of got this maybe half-right
In the purest sense, this did not come enterprise value of around $6 billion.
Mark: 0.5/1 to pass. There was no single acquisition Siemens, the German industrial giant,
of a European VC-backed company acquired Mendix, a Netherlands-
for more than $1 billion to a traditional born, -funded and -raised enterprise
non-tech European giant. But that’s software company, for $730 million.
not to say that there was not plenty of In other smaller, but still meaningful
relevant M&A activity that validated transactions, ING Group acquired
this trend. In fact, the year started in Payvision for a fee that valued the
January with Richemont’s acquisition of business at more than $500 million,
full control of the European, formerly- while Munich Re acquired Berlin’s Relayr
VC-backed, but now public company for $300 million. All this taken together,
Yoox Net-a-Porter for an implied total we think this deserves a half mark.
European founders will increase efforts to tap engineering

talent pools outside of traditional hubs
The battle for talent in Europe is ensuring talent flows are not a one-
intensifying. Not only are there more way street into tech. In order to stay
venture-backed startups that are better competitive in this context, European
funded and hungrier for engineering founders will look for creative ways to
talent than ever, but global tech giants best exploit the untapped engineering
are also expanding aggressively in the talent pools in less obvious places.
region with inflated salaries on offer for For example, we expect to see more
the most talented. At the same time, satellite offices opening up across the
European corporates are fighting back, region in upcoming hubs.
Yeah, we nailed this one too
This trend has certainly taken hold in already opened satellite offices to
Mark: 1/1 Europe in 2018, driven by increasing tap new talent pools and 80% of
levels of competition for talent in core those founders expressed increased
European tech hubs and a growing interested in opening additional
awareness of the depth of talent in offices. As one example, N26 has
emerging hubs. According to the more opened its first major office outside of
than 1,000 founders that responded Berlin, choosing Barcelona to build an
to this year’s State of European Tech office that will quickly expand to 100
Survey, more than 50% of companies employees.
with more than 100 employees have

A top tier, established European VC will participate in

a token offering/ICO
In 2017, top tier US funds (including newest funds, such as Blueyard. But the
Andreessen Horowitz and Union Square region’s most established funds have
Ventures) actively invested directly yet to participate. This will change in
in tokens via Initial Coin Offerings. 2018.
They were joined by some of Europe’s
Yeah...no, this didn’t happen
This did not happen, at least not through the year, but under the surface
Mark: 0/1 publicly. In 2018, making any sort of European teams have continued to
prediction around the state of the make progress and raise funds from
crypto market proved particularly top tier European investors, often via
dangerous given the extreme level of traditional equity. Argent, for example,
volatility in the market and an enduring raised capital from Index Ventures and
bear market. The price of crypto assets Creandum.
has inevitably dominated the headlines
So how did we do overall? We think 2.5/4 isn’t bad going...now

onto our predictions for next year...
Photo: Riku Kyla / Juuso Hmlinen

Predictions for 2019
Investing in
Underrepresented Founders
First-time funds targeting underrepresented European

communities emerge
The figures are damning. Only 7% funded today. We cannot shy away
of all capital invested in European from how difficult it will be to turn
tech companies in 2018 went to this tide. Established VC firms have
female or mixed gender founding a responsibility to look harder, and
teams. We cannot measure the face down their unconscious biases.
imbalance in funding allocated to Dedicated funds targeting investment
other underrepresented communities, into these communities are also part
but those figures would only be of the answer. These numbers have to
harder to read. It is even harder to change if we are to fulfil our potential.
consider just how much talent and 2019 is the year that new funds will start
value has evaporated away from our to make this happen.
industry because they are not being
Build
From Home
Founders choose to stay where they are and

build from home
According to the European Centre for their companies, and the second was
Policy Studies, tech talent in Europe defined by entrepreneurs staying to
is 10x more likely to move than the build from Europe but choosing one of
average citizen in Europe. This is the region’s major hubs (London, Berlin,
extraordinary and owes much to the etc.); then we’re entering a third phase
historic geographic opportunities where founders choose to stay where
of European tech. Europe is set to they are, emboldened by the quality of
enter a third phase in the evolution of the local ecosystems they see arising
entrepreneurial tech talent mobility. around them all across Europe. The
If the first phase was defined by the more that founders and talent choose
frequent flow of talented European to build from home, the more that 10x
entrepreneurs moving to the US to build difference will contract.

Semicorns?
$500 million+ rounds become a thing
Softbank Vision Fund has mostly the 12 $5 billion+ companies that have
set its eyes on the US, but it has also been founded in the past 15 years and
been active in Europe, leading giant as more growth stage capital lines up to
$500 million+ rounds into Improbable capture the European tech opportunity,
and Auto1. As Europe produces more we should expect $500 million+ rounds
multibillion-dollar companies to go with to become more common.
EuroSaaS
European SaaS companies take the public stage
European founders and investors are going to predict who makes it out first,
the first to admit that Europe started but we do think 2019 will see the next
behind the curve in SaaS. But Europe’s set of European SaaS IPOs to follow
leading SaaS companies are making in the footsteps of pioneers such as
up for lost time and scaling quickly. Mimecast. It’s about time too.
We’re looking at you, UIPath. We are not

About
Who, How, What, Why
ARTICLES
13.1 Our Data Partners
13.2 Our Contributors
13.3 Acknowledgements
13.4 About Atomico
13.5 About Slush
13.6 About Orrick
13.7 About Studio Lovelock

Our Data Partners
Advanced HR CBRE European Organization Dealroom European

for Nuclear Research Investment Fund
(CERN)
Indeed Invest Europe LinkedIn London Stock Meetup

Exchange
Politico Pro Preqin Quid Stack Overflow Startup Heatmap

Intelligence Europe

Our Contributors
Thanks to all of the following people for their

assistance and insight in developing this year’s
State of European Tech Report
Giovanni Anelli Alice Bentinck Elsa Bernadotte Christina Brinck Ophelia Brown
CERN EF Karma Sixth Swedish National Blossom Capital
Pension Fund
Tugce Bulut James Clark Michael Collins Simon Cook Rosie Dallas
Streetbees London Stock Invest Europe Draper Esprit Fat Llama
Exchange
Jacob de Geer Sonali de Rycker Lisa Edgar Rasmus Ekholm Linda Griffin
iZettle Accel Top Tier Capital Slush King
Partners
Irina Haivas Taavet Hinrikus Pip Jamieson Baroness Martha Nenad Marovac
Atomico TransferWise The Dots Lane Fox Invest Europe
Doteveryone

13.2 Our Contributors
Natalie Massenet Jamie McFarlane Raj Mukherjee Dave Norwood Steve O’Hear
Imaginary Creator Fund Indeed Oxford Sciences TechCrunch
Ventures Innovation
Pär-Jörgen Pärson Sharmadean Reid Mate Rimac Naren Shaam Sebastian

Northzone Beautystack Rimac Automobili GoEuro Siemiatkowski
Klarna
Pierre Stadler Juan Urdiales Munish Varma Caroline Walerud Teddie Wardi
Pictet Alternative Jobandtalent SoftBank Vision Voumental Insight Venture
Advisors Fund Partners
Check Warner Sara Wimmercranz Chris Yiu Niklas Zennström

Diversity VC / Susanne Najafi Tony Blair Institute Atomico
Backingminds for Global Change

Acknowledgements
We wouldn’t have been able to put together the State

of European Tech without a lot of help - thanks to all
of the following in particular:
Mike Allanson Ciarán Boylan Jon Brewer Liz Chang James Clark
Studio Lovelock Indeed Orrick Meetup London Stock
Exchange
Matt Collins Sergei Filimonov Rugiyya Gahramanli Ben Jakob Ant Jumratsilpa
Studio Lovelock Craft London Stock Studio Lovelock Studio Lovelock
Exchange
Bryce Keane Julie Kim Thomas Koesters Janne Korpela Jani Kurki
Atomico Quid European Startup Slush Slush
Initiative
Conrad Lee Ilya Levtov Joe Lovelock Declan McNamara, Gligor Micajkov
Advanced HR Craft Studio Lovelock Phd Dealroom
LinkedIn

13.4 Acknowledgements Photo: Kai Kuusisto
Milltown Partners Mohamed Cornelius Mueller Matt Muir Raj Mukherjee

Mohamed Invest Europe Indeed
Atomico
Marcus Nordberg Joanna Nye Julien Puls Anais Rassat Maeve Ryan
CERN Preqin Dealroom CERN LinkedIn
Julia Silge Karthik Suresh Eleanor Warnock Tom Wehmeier Yoram Wijngaarde
Stack Overflow Craft Atomico Atomico Dealroom
Chief Squirrel
Atomico

About Atomico
We’re Atomico. You probably knew that already.

We’re not a traditional venture capital breakers who want to build the next
But who are we really? firm. leader in their category. The world-
shapers creating companies that
We are built by founders for founders. fundamentally shift the way we live
Every single aspect of Atomico, today. The gamechangers using
every part of our culture, and every technology to rewire the world in favour
decision we take, is designed with the of something better, for as many people
sole ambition of helping our partners as possible.
succeed.
When we find these people, we invest
We exist for more than returns. We much more than money. We work hand-
believe entrepreneurs are the ultimate in-glove with them, drawing on hard-
agents of positive, transformational won experience scaling some of the
change across every aspect of our most successful technology companies
society and economy. in the world.
Our mission is to spur this progress Want to work on this report with us
forward. next year? We’re looking for a Research
Associate. Drop Tom a line at tom@
It’s why we partner with the world’s atomico.com.
most ambitious founders. The rule-
About Slush
Once again we’ve partnered with Slush to

produce the State of European Tech report
Slush is a global movement, supporting The very core of Slush is to facilitate
But what is Slush? the next generation of founders. It’s founder-investor meetings and to
a not-for-profit event organized by a build a worldwide startup community.
community of entrepreneurs, investors, In 2018, more than 1800 investors and
students, and festival organizers. 3000 startup companies came to
Helsinki for the event.
In 2018, Slush gathered more than
45,000 people in 75 events all around Slush is run by a community of students
the world, from South Africa to Tokyo. who want to radically change how
The Slush year culminates in Helsinki entrepreneurship is perceived in
in December, when 20,000 founders, Northern Europe and beyond. Several
investors, media and executives from successful entrepreneurs, from the
130+ countries gather in Helsinki. founders of Supercell and Spotify
among others, have already become a
Held during the darkest time of the year, part of the not-for-profit initiative that
Slush has always been characterized has already become a movement of
by a unique energy and enthusiasm. global magnitude.

About Orrick
But who is Orrick?

Orrick counsels more than 1,800 tech in the areas that are important to tech
Creators. Visionaries. companies, as well as the most active companies’ success: privacy and
Underdogs. The Daring. funds, corporate venture investors and cybersecurity, intellectual property,
public tech companies worldwide. We payments, and beyond.
help you disrupt. We help you build. We
protect you. We help you win. And we innovate not only in our legal
advice but also in the way we deliver our
We are the No. 1 most active law firm services. That’s why Financial Times
in European venture capital, No. 3 named us the most innovative law firm
globally (PitchBook), top 10 for global in North America in 2016 and 2017.
M&A (Bloomberg) and advisors to
seven of the top 15 global private equity
funds. We offer destination practices
About Studio Lovelock
Studio who?
Studio Lovelock is a branding and We pride ourselves on our willingness to

Smart, open-minded communications design agency based push beyond our comfort zone and the
and creatively restless in London. quality of the relationships we’ve built
with our clients.
We are a collection of open-minded,
smart and creatively restless folk, Being friendly, helpful and reliable
driven to help the businesses we doesn’t hurt either.
believe in achieve great things.
We are founded on the belief that

creativity and clear design thinking are
critical components in the long term
www.studiolovelock.com success of any business.

Appendix
Notes, Etc.
ARTICLES
14.1 Survey Respondents
14.2 More About Our Data Partners

Survey Respondents
Nordics 35.0%
Geographic origin of survey respondents
UK & Ireland 19.4%
L EG E ND
DACH 12.3%
% of respondents
Southern Europe 9.4%
France & Benelux 9.1%
Central Europe & Baltics 5.3%
Eastern Europe 4.3%
Rest of world 3.1%
United States 2.1%
0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0

% of respondents
Note: Source:
Numbers may not add to 100 due to rounding.
Founder 27.9%
Occupation of survey respondents
Investor 16.2%
L EG E ND
Company employee (non-tech) 16.2%
% of respondents
Startup/scale-up employee 15.2%
Company employee (public tech co) 6.9%
Other 5.9%
Student 4.8%
Public sector / policymaker 4.4%
Academic/researcher 2.0%
0.0 5.0 10.0 15.0 20.0 25.0 30.0

% of respondents
Note: Source:
Numbers may not add to 100 due to rounding.
Gender of respondents
Male 70.81%
L EG E ND
% of respondents
Female 27.37%
Prefer not to say 1.74%
Other (specify) 0.08%
0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00

% of respondents
Source:

More About Our Data Partners
Advanced-HR Advanced-HR is the leading provider and service providers. The VCECS
of pre-IPO compensation data. We results are leveraged in the Option
partner with top-tier investors and Impact compensation database, an
portfolio companies to produce ongoing survey where companies
the world’s largest compensation maintain current information in the
database specific to private, venture- system in exchange for full database
backed companies. Advanced-HR’s access at no cost. Advanced-HR is a
VC Executive Compensation Survey Solium company (Solium Capital Inc.)
(VCECS) is for corporate use by (TSX: SUM). To learn more, please visit
investors, management professionals, www.advanced-hr.com.
CBRE CBRE Group, Inc. (NYSE:CBG), a (excluding affiliates) worldwide. CBRE

Fortune 500 and S&P 500 company offers a broad range of integrated
headquartered in Los Angeles, is services, including facilities,
the world’s largest commercial real transaction and project management;
estate services and investment firm property management; investment
(based on 2017 revenue). The company management; appraisal and valuation;
has more than 80,000 employees property leasing; strategic consulting;
(excluding affiliates), and serves property sales; mortgage services and
real estate investors and occupiers development services. Please visit our
through approximately 450 offices website at www.cbre.com.
CERN The European Organisation for Nuclear aerospace, and industry 4.0, and are
Research (CERN) - is a world-renowned already present in start-ups hosted in
centre for scientific research, CERN’s network of Business Incubation
celebrated for its recent discovery of Centres. CERN is also part of the
the Higgs boson. CERN’s technology ATTRACT initiative, a European call for
provides concrete business solutions breakthrough ideas that will fund 170
in many fields: from medtech to innovative projects from 2019.
Craft Craft is a machine-learning powered of sources to provide comprehensive,

data and analytics platform building up-to-date sector and company
the “Source of Truth” on companies profiles, ranging from early-stage to
and mapping the global economy. The the largest companies in the world, with
Company organizes financial, operating analytics and tools such as signal alerts,
and human capital data from thousands trends and benchmarking.
Dealroom Dealroom is a global company clients are world-leading strategy

information database & research firm. consulting firms, investment banks,
Its software, database and bespoke multinationals, technology firms,
research enable its clients to stay at venture capital & buyout firms and
the forefront of innovation, discover governments. For more information,
promising companies and identify please visit: https://dealroom.co
strategic opportunities. Among its

EIF The European Investment Fund (EIF) is capital, guarantees and microfinance
part of the European Investment Bank instruments, which specifically target
group. Its central mission is to support this market segment. In this role, EIF
Europe’s micro, small and medium- fosters EU objectives in support of
sized businesses (SMEs) by helping innovation, research and development,
them to access finance. EIF designs entrepreneurship, growth, and
and develops venture and growth employment.
European Startup Initiative The European Startup initiative startup hubs. The 2018 survey was
behind the Heatmap is a non-profit collected between April and August
organization enabling founders and 2018 and had 1,500 participants. After
tech talent to navigate European cleaning and sampling the data, 984
startup hubs and support community complete datasets remained that
builders to connect their ecosystems. were weighted to adjust for regional
representativeness on country level.
http://www.startupheatmap.com Founders were 57.52% of respondents.
For long-term trends in founder
The Startup Heatmap Europe is mobility, we used a combined dataset
an annual survey among founders of 3 years with 1,661 distinct founder
and the greater tech community on dataset
mobility and the attractiveness of
Indeed More people find jobs on Indeed than people each month search for jobs,
anywhere else. Indeed is the #1 job post CVs, and research companies on
site in the world and allows jobseekers Indeed, and Indeed is the #1 source
to search millions of jobs on the web of external hires for thousands of
or mobile in over 60 countries and companies (sources: SilkRoad & iCIMS).
28 languages. More than 200 million For more information, visit indeed.com.
Invest Europe Invest Europe is the association in Europe. We provide information

representing Europe’s private equity, to the public on our members’ role in
venture capital and infrastructure the economy. Our research provides
sectors, as well as their investors. the most authoritative source of data
on trends and developments in our
Our members take a long-term industry.
approach to investing in privately
held companies, from start-ups to Invest Europe is the guardian of the
established firms. They inject not only industry’s professional standards,
capital but dynamism, innovation and demanding accountability, good
expertise. This commitment helps governance and transparency from our
deliver strong and sustainable growth, members.
resulting in healthy returns for Europe’s
leading pension funds and insurers, to Invest Europe is a non-profit
the benefit of the millions of European organisation with 21 employees in
citizens who depend on them. Brussels, Belgium.
Invest Europe aims to make a For more information visit www.

constructive contribution to policy investeurope.
affecting private capital investment
LinkedIn Founded in 2003, LinkedIn connects network on the Internet. The company
the world’s professionals to make has a diversified business model with
them more productive and successful. revenue coming from Talent Solutions,
With more than 590+ million members Marketing Solutions, and Premium
worldwide, including executives from Subscriptions products. Headquartered
every Fortune 500 company, LinkedIn in Silicon Valley, LinkedIn has offices
is the world’s largest professional across the globe.

London Stock Exchange London Stock Exchange Group CCP, LCH.

(LSE.L) is a diversified international
exchange Group that sits at the heart The Group offers its customers an
of the world’s financial community. extensive range of real-time and
The Group can trace its history back reference data products, including
to 1801. The Group operates a broad Sedol, UnaVista and RNS. FTSE
range of international equity, bond calculates thousands of unique
and derivatives markets, including indices that measure and benchmark
London Stock Exchange; Borsa Italiana; markets and asset classes in more
MTS, Europe’s leading fixed income than 80 countries around the world.
market; and the pan-European equities London Stock Exchange Group is also a
platform, Turquoise. Through its leading developer of high performance
markets, the Group offers international trading platforms and capital markets
business, and investors, unrivalled software. In addition to the Group’s own
access to Europe’s capital markets. markets, over 40 other organisations
Post trade and risk management and exchanges around the world use
services are a significant and growing the Group’s MillenniumIT trading,
part of the Group’s business operations. surveillance and post trade technology.
LSEG operates CC&G, the Rome Headquartered in London, United
headquartered CCP and Monte Titoli, Kingdom with significant operations
the significant European settlement in Italy, France, North America
business, selected as a first wave T2S and Sri Lanka, the Group employs
participant. The Group is also a majority approximately 4,700 peopl
owner of leading multi-asset global
Meetup Meetup is a global community platform around the world. Meetup was acquired
that connects people in real life. It by WeWork in 2017. The two companies
was founded with one simple idea: share a vision of the power of bringing
use technology to get people off people together, and together
technology. Our vision is to harness using technology to create new and
technology to remove the barriers to innovative ways of building community.
human connection and deliver real life Follow us @Meetup on Twitter, @
community. Meetup supports over 40 Meetup on Instagram and Facebook, or
million members+, 320,000+ Meetup visit meetup.com to learn more.
groups and 12,000 Meetups per day
Politico POLITICO Europe, launched in April industries from Technology, Financial

2015, is a joint venture between Services and Trade to Competition,
POLITICO LLC, a global nonpartisan Data & Digitization, Mobility and more.
politics and policy news organization, Subscribers include EU and national
and Axel Springer, the leading digital government, corporations, trade
publisher in Europe. associations, consultancies, law firms,
and NGOs.
With operations based in Brussels and
additional offices in London, Berlin, POLITICO Pro’s newest offering, Pro
Paris, Warsaw, and Frankfurt, POLITICO Intelligence, is an innovative platform
Europe connects the dots between which fuses the power of technology
European power centers. In June 2018, with the power of journalism, providing
an annual ComRes/Burson-Marsteller professionals with an overview of
survey ranked POLITICO Europe as bills, legislation, voting behaviour and
the #1 most influential publication on attendance, tweets, activities, press
European affairs, for the second year releases, transcripts and more, at the
running. touch of a button. Users can track
information on the EU Institutions and
POLITICO’s premium policy intelligence national legislatures in the UK, France
service, POLITICO Pro, empowers and Germany. Pro Intelligence was used
thousands of policy experts and by Atomico to research data on EU Tech
decision-makers from over 730 legislation for this report.
organizations in 28 countries, on key

Preqin Preqin is the home of alternative Our products and services are relied
assets, providing indispensable data, upon by more than 60,000 industry
solutions and insights to support participants in over 90 countries,
alternative asset professionals at for a range of activities including
every stage of the investment cycle. fundraising, investor relations, asset
Since 2003, we have been the most allocation, fund manager selection
trusted source of information on and business development. Preqin is
alternative assets, spanning private an independent business with over
equity, venture capital, hedge funds, 400 staff based in New York, London,
real estate, infrastructure, private debt, Singapore, San Francisco, Hong Kong,
natural resources and secondaries. Guangzhou and Manila.
Quid Quid is software that reads millions analytics, natural language processing
of documents and offers immediate and network science to help surface
insight by organizing that content key insights, enabling our Fortune 1000
visually. We power human intuition clients to quickly complete analyses
with machine intelligence, enabling like competitive tracking, market
organizations to make decisions landscapes, brand narrative maps, and
that matter. The tool uses big-data intelligence briefings.
Stack Overflow Founded in 2008, Stack Overflow is the Overflow partners with businesses to
largest, most trusted online community help them understand, hire, engage,
for developers to learn, share their and enable the world’s developers. Our
knowledge, and build their careers. products and services are focused
More than 50 million professional and on developer marketing, technical
aspiring programmers visit Stack recruiting, market research, and
Overflow each month to help solve knowledge sharing within organizations.
coding problems, develop new skills,
and find job opportunities. Stack

Photo: Jussi Helsten
Thanks for taking the time to read this
year’s State of European Tech Report
This report wouldn’t be possible without the many valuable

contributions from our data partners and the tireless work
by our survey distribution partners who help us reach tech
communities across the continent each year.
If you are interested in becoming a data or community partner

for next year’s report please drop us an email on media@
atomico.com with the subject line ‘SoET 2019’ and we will get
back to you in due course.
We look forward to sharing the results with you next year of

what has become the most comprehensive data-driven study
of the European technology ecosystem available today.
Tom Wehmeier and the Atomico Team
In Partnership with &

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In Partnership with &

01 The State of European Tech 2018 7

02 Tech & the European Economy 14

03 Diversity & Inclusion 26

04 Europe’s Got Talent 43

06 Research & Development 82

08 Investors & Investment 102

09 Great European Companies 126

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European tech in the

01 Another record year for investment into the European

02 Europe urgently needs to fix its diversity & inclusion

03 Europe’s tech industry is the best hope for growth for

05 Mobilising Europe’s hidden tech talent pool can unlock

06 Europe is producing $B+ companies at a level that is

07 Top highlight statistics for Europe

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Another record year for investment into

TECH IPO COMPANIES

Europe urgently needs to fix its diversity

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Europe’s tech industry is the best hope for

EMERGING TECH HUBS

The gains from Europe’s tech boom are not

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Mobilising Europe’s hidden tech talent

EMERGING TECH HUBS

Europe is producing $B+ companies at a

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01.1 Welcome to the State of European Tech 2018

01.2 Executive Summary

In Partnership with & www.thestateofeuropeantech.com

We’re proud to present the 2018 edition of the State

Each year we aim to produce a

8 In Partnership with & www.thestateofeuropeantech.com

9 In Partnership with & www.thestateofeuropeantech.com

10 In Partnership with & www.thestateofeuropeantech.com

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A Word from Slush

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A Word from Orrick

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02.1 Powering Workforce Growth

02.2 Tech: The Motor for GDP Growth

02.3 Heritage as opportunity

02.4 Smiles (almost) all round in European techv

02.5 Tech for Good: A European Opportunity?

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Employment growth TheinEuropean

EU employment growth, 2016-2018

YoY growth (%)

It is worth comparing EU employment growth rate TECH WORKER POPULATION GROWTH

The French tech worker population is growing

Tech worker population growth in France,

United Kingdom 3.3%

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0

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France’s tech worker population grew at the fastest WORKFORCE GROWTH

7.3 % French tech workforce growth in 2018,

The rate of tech workforce growth across Europe

Czech Republic 1.9%

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0

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