From unicorn to centaur: European startups consolidate their position

European startups are becoming increasingly important, and there are now no fewer than 283 unicorns on the Old Continent - startups with a valuation in excess of $1 billion - and a few centaurs. Zoom in on this change in dimension.

From unicorns to centaurs

As part of the European tech fair VivaTech, which welcomes 1,700 startups to Paris from June 15 to 18, GP Bullhound has published its annual "Titans of Tech" report, taking stock of the European startup landscape.

There are now 283 unicorns on the Old Continent, startups valued at over $1 billion, 10 times more than 8 years ago in 2014. European decacorns, valued at over $10 billion, now number 37. These include Swedish fintech Klarna and Germany's Celonis.

Recently, startups known as "centaurs" have also been on the rise in Europe: the term refers to startups generating at least $100 million in annual recurring revenue (ARR).

Their precise number remains uncertain, as few of them make their financial results public. However, French unicorns Mirakl and EcoVadis stand out, with the latter poised to break the $100 million ARR barrier for its 2022 financial year.


Profitability, impact and parity

GB Bullhound's annual report "Euroopean tech sector doubles in value during pandemic" lists other indicators of the vitality of European startups. While one of the most frequently used criteria is the amount of funds raised, it is not the most relevant for assessing a startup's financial health.

Indeed, rapid growth is not necessarily synonymous with profitability, and investors are now asking for more security before committing themselves. This is all the more true in view of the fact that fundraising worldwide is declining, both in terms of the amounts raised and the number of deals.

Last year, some startups were still managing to raise millions of dollars without presenting any product; today, investors demand concrete proof of profitability to minimize risk.

Another sign that European startups are now playing in the big league is their growing commitment to social, societal and environmental impact. The "Titans of Tech" report points to a 50% increase in job offers dedicated to impact in the tech sector between 2020 and 2021.

More and more startups are not only communicating their CSR approach, but also making a commitment to parity. A few weeks ago, the French Tech mission drew up a "parity pact", signed to date by 140 startups. This parity pact includes a quota of 20% women on boards of directors by 2025, and 40% by 2028.

Finally, another indicator of the changing scale of European startups is the growth in mergers and acquisitions (M&A), which enable start-ups to grow by buying up struggling companies at lower cost.