![]() ![]() Music streaming platform Spotify laid off 6% of its headcount, "buy now, pay later" firm Klarna announced cuts of 10%, while money transfer unicorn Zepz recently let go 26% of employees.Īn Accel spokesperson said that the impact of layoffs on new startup generation did not feature in its report.īut despite the darkening outlook for tech, Nelis said he is hopeful for the future. Last year, more than $400 billion was wiped off the value of Europe's tech industry, according to data from VC firm Atomico. The market value of firms such as Klarna has been slashed as investors reevaluate the tech sector. Nevertheless, the outlook for tech startups more broadly has darkened as interest rates have risen, putting pressure on valuations of late-stage companies in particular. The average time taken for a startup to hit unicorn status in Europe is now just seven years, Accel said. More than 59% of startups that came from so-called startup mafias have already managed to raise VC funding, with 45% pulling in around $1 million to $10 million and 30% receiving more than $10 million. Three-quarters of second-generation founders received higher education, with 60% obtaining a master's degree. It takes second-generation founders an average of 28 months before founding their own startups, according to Accel, and the average age of these entrepreneurs is 33. The data also offers insight into the journey people take to becoming founders. More than 59% of startups that came from so-called startup mafias have already managed to raise VC funding, with 45% attracting around $1 million to $10 million of investment, and 30% receiving more than $10 million. Within Europe, London hosted the most startup factories for a single city, with 27 unicorns and 185 startups, while Berlin was close behind with its 25 founder factories and 165 startup spinouts. Tel Aviv was the largest single hub for producing startup factories, with 127 new firms being spun out from 33 unicorns, Accel said. Startup employees in Europe and Israel tend to favor their own cities for setting up their new businesses, with over half of new firms founded in the same city as the unicorn they exited, according to Accel. The largest cohort of newly established startup mafias comes from fintech, with almost 20% of European startups spun out of unicorns operating in the sector. Today, the likes of Spotify, Delivery Hero, Klarna and Wise have become founder factories in their own right. ![]() "Now, unless you came out of university and studied in exactly the same way that I did, and you go straight into a startup - not like a raw startup but an established one where you can learn a trade and then you have your career already - it's that kind of new philosophy that will, I think, help Europe over time, and has been helping the ecosystem." Then I'd go back to the Netherlands and my friends and my parents would say, why would you do that? Why wouldn't you go work for Shell or Unilever? That has held Europe back," Harry Nelis, partner at Accel, told CNBC. "When I got started like 30 years ago back in the Valley, I did it in the West Coast, Palo Alto. It began to take shape with the advent of maturing internet platforms like Skype, from which Niklas Zennstrom started VC fund Atomico and Taavet Hinrikus co-founded fintech giant Wise. VC investors say that those entrepreneurs came from a culture of risk-taking in Silicon Valley that, for many years, hasn't existed in the same way in Europe. fintech giant PayPal, Elon Musk went on to start electric-car maker Tesla and space exploration firm SpaceX, for example, while Peter Thiel co-founded the big data company Palantir and is now a renowned investor with his Valar Ventures and Founders Fund VC firms. These "mafias," which are firms started by employees of other tech firms, have historically led to the creation of some of the largest tech companies known today.įrom U.S. Such companies are referred to in the startup world as "mafias" - and no, they're not like the mobs of the Italian-American gangster films. The biggest examples of companies whose former talent went on to establish new companies include Spotify, which spawned 32 new companies, Delivery Hero, which generated 32, and Criteo, from which 31 new startups were born. Personal Loans for 670 Credit Score or LowerĪ similar report from the firm last year showed that, out of 344 VC-backed unicorns, 201 led to 1,018 new startups being created. Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit ![]()
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