[NUMBERS] The United Kingdom, France, Germany and Sweden, spearheads of scale-ups in Europe

by bold-lichterman

Investments in growing tech companies continue to climb in Europe. According to the joint report of Tech.eu and Stripe, “Life is Growth”, on the continent, more than 2,000 scale-ups raised 30 billion euros of financing during 2,300 raises between 2016 and 2018. On an annual basis, the total investment in these scale-ups and the number of rounds have thus almost doubled over the past 3 years.

The report considers as scale-ups, structures that have passed the early stages of creation, have a product or service that meets a market and whose investments are used to finance growth in terms of users, payroll, targeted markets and are no longer used for pure survival. How, where and when do these future tech champions emerge in Europe?

A fragmented Europe

On the continent, the emergence of scale-up is mainly driven by four countries: the United Kingdom, Germany, France and Sweden. The total amount of financing of structures in the growth phase in these 4 countries thus exceeded 21 billion euros between 2016 and 2018. This represents 70% of the total investment gathered over this period and almost double the amount generated by the 20 other countries following the ranking. Investments go to the most mature ecosystems with the United Kingdom in the lead (8.82 billion euros), followed by France (5.44 billion), Germany (4.85 billion) and Sweden (2 billion).

But in terms of growth, France and Germany were particularly dynamic with an increase of respectively 27% and 26% in investments in scale-ups in 2018, while investments in scale-ups stagnated in the Kingdom. United and decreased by 13% in Sweden.

These figures show in any case that the Tech ecosystem is still very fragmented in Europe.

Credit: Tech.eu/Stripe

FinTech, e-health and SaaS, the most attractive sectors

By sector, it is, in this order, the FinTech, MedTech / e-health, SaaS and transport companies that have captured the greatest part of the investments.

Credit: Tech.eu/Stripe

If FinTech is the most promising vertical in the United Kingdom, Germany and Sweden, France stands out on this point, since in France, it is MedTech that drives investments upwards.

Credit: Tech.eu/Stripe

Europe and international

On the internationalization side, “only one in two European companies in the growth phase has physically exported outside its home market”, Notes the report. The latter try to sell their products from their country of origin as long as possible. However, the majority of German, French, British, Spanish and Italian scale-ups start selling their products or services internationally from their two years of existence, in particular on the B2B market.

Despite this interesting increase in scale-up financing in Europe, it should be remembered that the continent, from a general point of view, still only captures a small fraction of private investment compared to the United States and China. , which has concrete consequences for the development of European tech companies. This encourages them to have to turn more to alternative investments, particularly public ones, which may be more limited.

Credit: Tech.eu/Stripe