Why Europe and Israel’s unicorns are producing the next generation of tech founders
Talent is the cornerstone of any successful tech ecosystem. In the last two decades, we’ve seen a wealth of strong founders and operators emerge across Europe and Israel, building innovative products and category-defining, unicorn companies that are competing on the global stage.
This in turn has encouraged employees from some of Europe’s biggest tech success stories to take their experience working at a unicorn, use it to found the next generation of startups and win venture backing. As a result, we’re now seeing a spinning flywheel effect, in which unicorn pedigree and know-how is trickling down and fueling the next wave of ambitious entrepreneurs similar to what we have seen in the U.S. over the last few decades.
Since opening our London office 23 years ago, the Accel team has backed some of Europe’s greatest startup success stories, including Celonis, Miro, Monzo, Personio Spotify, Supercell, UiPath and Vinted.
Our recently launched Founder Factories Report explores the unicorns, or “founder factories,” now producing the largest amount of entrepreneurial talent in the region and the resulting journey from unicorn employee to tech founder.
The ecosystem is in a strong position despite current headwinds, thanks to its flywheel of inter-generational talent spawning from unicorns.
Our data paints a clear picture: the ecosystem is in a strong position despite current macroeconomic headwinds, thanks to its flywheel of inter-generational talent spawning from unicorns.
To illustrate this, let’s take a look at some key takeaways from the report:
The rise of the “founder factory”
Established juggernauts in the European and Israeli ecosystem are fast becoming hotbeds of talent. These “founder factories” are attracting and upskilling the region’s brightest tech operators – and inspiring many of them to become founders and start new ventures in the process.
Our data reveals that 221 of the region’s 353 VC-backed unicorns have fueled 1171 new tech-enabled startups through their alumni, illustrating this trend. Moreover:
- The founder factories at the top of our ranking are Sweden’s Spotify and Germany’s Delivery Hero, both of which have produced 32 startup spinoffs, followed by the likes of Criteo (31), Klarna (31) and Zalando (30). Other familiar unicorns including BlaBlaCar, Deliveroo, Glovo, N26, Revolut, Skype, Wise, Wix and Zalando, have all also produced more than 20 new tech startups each.
- However, a wave of newer founder factories is also on the rise with younger unicorns such as Babylon, Celonis, Conduit, iZettle and SumUp seeing 10 or more companies set up by former employees.
- Alumni-founded startups are attracting significant private investment, with more than half (59%) of these new startups already securing private funding. Of those, 45% (311) have raised between $1M-$10M and almost a third (30%) have raised more than $10M.