Interview, Conference Presentation
Unicorns and Soonicorns: What’s Driving Significant Growth in European Tech
- The European tech sector is projected to expand over the next five to 10 years, driven by a founder shift toward growing valuations to "multiple billions" rather than early exits, building on a recent six-year period where VC funding increased sixfold to $43 billion.
- Market capitalization and private company numbers are expected to rise, with a "slew" of public companies holding market caps between $20 billion and $70 billion anticipated to persist and grow, eventually increasing the count of firms exceeding $100 billion from two to a range of five to 10 within the next few years.
- Subsector growth is forecasted to continue in health tech, food tech, and fintech, with EdTech specifically expected to see a significant rise in unicorns, while fintech and software sectors are predicted to maintain their collective total of over 25 unicorns.
- Companies are expected to remain private longer and pursue larger public market capital raises, aiming for IPO valuations of "10 billion plus," supported by a record pace of six to seven billion-dollar IPOs in the last 12 months and a strategic pivot in 2021 toward capital raising following 2020's dominant strategic activity.
- Investor interest in both private and public markets is anticipated to remain high in search of growth, with the sector's best performance expected to be driven by capital investments creating the next generation of unicorns.
- A structural divergence is expected where enterprise-focused companies may face an "exodus from Europe to the U.S." to access American business customers, whereas consumer-side technology companies are hoped to successfully scale as listed European entities without relocating.