The Global Startup Ecosystem Report 2023

Insights, Rankings & Ecosystem Pages

Europe experienced an 18% increase in Series B+ deal count and 160% rise in Series B+ amount in 2018–2022.

Despite macroeconomic woes and geopolitical tensions, 2022 was the second-biggest year overall for European VC activity after 2021, with deal count and amount surpassing pre-2021 numbers. In 2022, the amount of early-stage funding in Europe was down 15% from the year before, but the average early-stage deal amount was up by 7% due to a significant reduction in the number of deals, just 75% of 2021’s number. For the same period, the number of Series B+ deals fell by 11% and the Series B+ funding amount by 29%, from $67 million in 2021 to $48 million in 2022. However, in the period 2018–2022, Europe experienced an 18% increase in Series B+ deal count and 160% in Series B+ amount. It also experienced a 56% increase in early-stage deal amount over the same period, all highlighting the long-term growth in startup investment in the region.

Fintech has become a major European sub-sector as digital adoption after the financial crisis disrupted the finance services industry. London’s and Revolut are two of the most valuable VC-backed companies in Europe. However, in 2022 the sub-sector trended downward, likely influenced by the prospect of regulations to be imposed over data, security, and the financial services industry in combination with the general downturn.

Several European nations implemented policies aimed at attracting and supporting startups in 2022, with both Spain and Portugal passing “startup laws.” Brussels pushed through two major bills that increased regulation for high-tech companies. One of these, the Digital Services Act (DSA), is particularly relevant to startups, as it emphasizes transparency and moderation. Additionally, all European startups utilizing AI will be affected by planned legislation that aims to tighten regulations to ensure safer and more trustworthy AI products.

Key Findings

  • London remains #1 in Europe and has the most companies valued over $1 billion in the region. The ecosystem’s 83 exits over $50 million include Wise, at a valuation of $12.2 billion, and Deliveroo at $10.5 billion. Revolut, one of Europe's largest Fintech unicorns, is valued at $33 billion.
  • Berlin moved up to #13 overall and #2 in Europe. The German capital minted five new unicorns in 2022, increasing the total count from 14 to 19. CoachHub was the highest valued at $1.5 billion. Exits over $50 million have increased by 40% from the GSER 2022 timeframe, with AUTO1-Group being the highest valued in a $9.2 billion IPO.
  • Amsterdam holds steady at #14 overall and #3 in Europe, thanks to an increase in exit count over $50 million, in early-stage deal count, and in the number of unicorns. Banking platform Backbase is the most recent addition, valued at 2.7 billion.
  • Paris has dropped three places to #18, yet remains a leading European ecosystem at #4 in the region. The French capital increased its number of unicorns from 14 to 30, with Back Market the highest valued at $5.7 billion.
  • Zurich shot up 10 places to #36l, making it to the top 30 + runners-up for the first time. The growth was spurred by the number of exits over $50 million increasing by 300% from the GSER 2022. The top-valued exit in the ecosystem was Sportradar’s 2021 $8 billion IPO.
  • Estonia has moved up 28 positions since the GSER 2022, reaching #10 in the Emerging Ecosystems ranking. It experienced an increase in early-stage funding rounds, and a 100% increase in exits over $50 million. Looking at the longer term, Estonia has experienced a massive 439% increase in early-stage deal amount from 2018 to 2022 and 50% increase in early-stage deal count in the same period.