This is the second report Tech.eu and Stripe release after “Seed the Future” (November 2018), which looked specifically at early-stage investment in Europe.
What's clear from the report is that investment in European growth-stage technology companies is at an all-time high, with total capital invested into scale-ups at €30 billion across 2,300+ rounds tracked between 2016 and 2018.
In fact, on an annual basis, both the total investment in growth-stage startups and the number of funding deals have roughly doubled in the last three full years.
Overall, more than 2,000 European tech startups have reached growth-stage, with a median size of investment round of €10 million.
But it also becomes apparent that the growth-stage is still largely reserved only for tech companies a small number of mature hubs across Europe. The total of financing going to British, German, French and Swedish growth-stage tech startups from 2016 to 2018 exceeds €21 billion. This represents 70% of total growth investment in that time period, and nearly double the amount raised by tech companies in the next 20 countries in the ranking.
The UK remains the absolute leader in growth-stage investment (€8.82 billion), but France (€5.44 billion) and Germany (€4.85 billion) are catching up fast; our research shows that between 2017 and 2018, total investment into French and German growth-stage tech startups in France and Germany grew by roughly 27% and 26%, respectively, whereas the number in the UK virtually stagnated.
As for verticals, the trends are also clear as day. Similarly to what is happening with seed investment, the report found that Fintech startups such as Monzo (UK) and N26 (Germany), and MedTech startups such as PushDoctor (UK), Kry (Sweden) and Doctolib (France) have benefited most from the influx of growth-stage investment.
They have each received €5.38 billion and €4.22 billion in investment respectively over the last three years.
Fintech is the top vertical in the UK, Germany, and Sweden by a comfortable margin, while MedTech is by far the top vertical in France.
Saas, with €2.5 billion in investment, is a strong third in most European countries, driven by strong B2B players such as Aircall (France) or Teamleader (Belgium).
“The European startup ecosystem is on the right track to create technology giants in the years to come. Seed investment is strong and growth investment is getting stronger, year after year. But while the UK, France, Germany and Sweden are frequently seeing the birth of globally competitive tech companies, the rest of European hubs lag behind”, said Guillaume Princen, Head of Continental Europe at Stripe.
“Startups are in Stripe’s DNA and we want to abstract the complexity of starting and growing a global business, regardless of where it was initially started.”
The "Life is Growth" report can be downloaded free of charge. Tell us what you think!