Enterprise capitalists invested more cash than ever into start-ups final 12 months

Hopin founder and CEO Johnny Boufarhat.


Enterprise capitalists invested greater than $675 billion in start-ups worldwide in 2021, doubling 2020’s earlier all-time excessive, in keeping with knowledge printed Thursday by VC evaluation agency Dealroom and British promo company London & Companions.

Regardless of the pandemic, the variety of so-called “unicorns” continued to rise at a clip final 12 months, with some 133 start-ups within the San Francisco Bay Space seeing their valuations climb to over $1 billion, adopted by 69 in New York, 21 in Larger Boston, 20 in London, 16 in Bengaluru and 15 in Berlin.

The surge within the variety of unicorns was complimented by the variety of megarounds — start-up funding rounds over $100 million.

These shot up dramatically in some cities, with London seeing a 3.4-times improve. There have been 64 of those megarounds in London alone final 12 months, up from 19 in 2020, in keeping with Dealroom. Fintech app Revolut raised an $800 million sequence E spherical, whereas rival Monzo raised over $600 million throughout two offers. Elsewhere, on-line occasions platform Hopin raised $850 million throughout two offers in 2021.

In whole, start-ups within the U.Ok. capital raised $25.5 billion from VCs final 12 months, up from $11.2 billion in 2020, and there at the moment are 75 unicorns in London, with current additions together with cellular banking app Starling Financial institution and insuretech start-up Marshmallow.

Laura Citron, CEO of London & Companions, mentioned in a press release that London is now a really mature international know-how capital.

“We’ve massive swimming pools of later stage funding, practically two new unicorn corporations each month, and large funding rounds and exits,” she mentioned. “This knowledge exhibits that London isn’t solely a superb place for entrepreneurs to start out companies, but additionally to develop them to a worldwide scale.”

VC companies in London raised $9.9 billion in new funds in 2021, accounting for 35% of all European VC funds. Index Ventures, Balderton Capital and 83North all closed massive new funds, whereas well-known U.S. VC companies together with Lightspeed and Basic Catalyst arrange workplaces within the metropolis.

Europe vs. the U.S. and China

However London, and the remainder of Europe, haven’t but produced any tech companies that may match the scale of Alphabet, Apple, Amazon, Meta or Microsoft within the U.S., or Alibaba and Tencent in China.

Europe’s greatest tech agency by market cap is chip manufacturing machine maker ASML, which is valued at over $300 billion. In the meantime, within the U.S., a number of corporations are valued at over $1 trillion and Apple briefly noticed its market cap climb to over $3 trillion earlier this month. Certainly, the U.S. and Asian tech giants have acquired a lot of Europe’s most promising corporations, together with synthetic intelligence lab DeepMind and chip designer Arm.

Enterprise capitalists pumped $328.8 billion into U.S. start-ups and $61.8 billion into Chinese language start-ups in 2021, whereas they solely invested $39.8 billion in U.Ok. start-ups. However VC funding within the U.Ok. and Europe is rising quicker than it’s within the U.S. and China.

A number of of the London’s best-known start-ups, together with meals supply agency Deliveroo and cybersecurity start-up Darktrace, went public on the London Inventory Trade in 2021. They obtained a blended reception from traders, nevertheless, and lots of of Europe’s greatest start-ups together with Spotify nonetheless select to checklist in New York.

Nazim Salur, co-founder of speedy grocery supply app Getir, informed CNBC in December that Europe would not deal with tech corporations in addition to the U.S. does.

“There’s an excessive amount of skepticism [in Europe],” he mentioned, including that this comes from traders and policymakers. He mentioned Getir, which was most lately valued at $7.5 billion, would principally possible checklist within the U.S. if it did go public. It’s in talks with traders a few new spherical of personal funding that may worth it at over $12 billion, in keeping with Bloomberg.

Whereas Europe has a “very sturdy economic system general” and is a robust participant in automobile manufacturing, prescribed drugs, style and different industries, it is not as highly effective in the case of start-ups, Salur mentioned.

“There are a number of good start-ups. However once you take a look at the sheer quantity of the unicorn checklist for instance, about 800 corporations, half are from U.S. and a 3rd are from China. And all the remaining is all the remainder of the world. Europe sadly isn’t represented correctly.”

Correction: This story has been up to date with the proper job title for Nazim Salur.


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