2 3TITANS OF TECH: EUROPE’S FLAGSHIP COMPANIES 04THE VIEW FROM GP BULLHOUND 06 Chapter 1: Europe’s Billion-Dollar Companies18 EXPERT VIEWUri Levine, Waze 22 EXPERT VIEWPr-Jrgen Prson, Northzone 24 Chapter 2: The March Towards Europe’s First Titan30EXPERT VIEWPoppy Gustafsson, Darktrace 34EXPERT VIEWJason Kingdon, Blue Prism 36 Chapter 3: Titans Of Tomorrow43EXPERT VIEWCatherine Wines, WorldRemit 44 Methodology CONTENTS The best tech companies know how tobalance ambition and risk. This was thekey lesson Pr-Jrgen Prson, Partner atNorthzone and one of the earliest investorsin Spotify, told us about his experiencesupporting the growth of Europe’s largesttech start-up.With more billion-dollar tech companies thanever and the largest year of fund-raising onrecord, it is clear that Europe can rival theUS and Asia as a hub for tech companies.But to turn billion-dollar tech companies intodecacorns, and decacorns into tech titans,the European tech landscape is going tohave to start embracing risk.Last year, GP Bullhound introduced theconcept of tech titans to Europe. These are young tech companies with a valuationof $50bn or more. We saw a number of fast- growth tech companies with the potential to reach this lofty fgure, and wanted to set a new ambition level for the market.The subsequent 12 months have shownpositive signs that the journey towardsEurope’s frst $50bn tech company isprogressing rapidly, but taking that fnal step up to a valuation that truly competeswith the world’s largest tech companiesrequires a level of fearlessness and risk-takingthat we are yet to see.5TITANS OF TECH: EUROPE’S FLAGSHIP COMPANIES THE VIEW From GP Bullhound EXECUTIVE SUMMARY 4 Beyond Spotify, we believe Zalando and Delivery Hero are well on the way toachieving titan status. Europe increasingly has the capital to scale businesses to thislevel, but founders now need to know when to make bold decisions, when to betthe house on long-term growth and when to expand globally. Spotify has shown it can be done, and more will follow.Once again, GP Bullhound has analysedthe ecosystem in Europe fuelling thegrowth of the continent’s most successfultech companies, and the fndings areencouraging. There are now 69 billion-dollartech companies in Europe, a 2.3x increasesince 2014.These are serious businesses with seriousvaluations and revenue. The number of tech companies with a valuation of morethan $5bn has increased by 75% since 2016,and the combined value of Europe’s billion- dollar tech companies is actually growingfaster than the US or Asia.This growth is being accelerated byunprecedented levels of investment in terms of both the number and size of deals.2017 was the year of the mega-round, with nine tech companies closing deals worth$200m or more1. Of the ten billion-dollarEuropean tech companies that have raisedthe most equity since they were founded,seven of them closed deals last year.We are seeing Europe’s most ambitiousentrepreneurs attracting investment fromsome of the world’s biggest tech funds and corporates, then looking for more and closing further rounds.Within this frenzy of investment, the UK hasmaintained its position as the undisputedtech capital of Europe. The UK has addedsix new billion-dollar tech companies in thelast 12 months, meaning it now has 26 of thecontinent’s most successful tech companies. Despite ongoing concerns around Brexit, itappears that the UK is still home to the highestconcentration of ambitious entrepreneurs inEurope with successful business models thatspan a wide range of tech sectors. And with102 tech start-ups fast approaching a billion- dollar valuation, it looks like the prospect forBrexit Britain is strong. However, the UK is not the only countrydriving European tech success. Sweden hascontributed signifcant value towards Europe’stech ecosystem – $54bn in total – particularlysubstantial given the size of this market. Five years ago, GP Bullhound asked if Europecan regularly create billion-dollar techcompanies. Looking across the Europeaninvestment landscape fve years later, itsevolution in terms of ambitious entrepreneursand investors, mega rounds and successstories is remarkable. Our report clearly demonstrates that Europehas all the right ingredients to create a techtitan; with the right combination of ambitionand risk, there is no reason Europe can’t nowrealise its potential to create its frst. It’s time to reset the ambition level of Europe’s tech companies to make this a reality. MANISH MADHVANIManaging Partner MARVIN MAERZAssociate ALESSANDRO CASARTELLIDirector ALON KUPERMANDirector JOFFREY EZERZERAnalystADAM PAGEAssociateGP Bullhound analysis as of report cut-off date. 1. Primary Equity rounds onlyEUROPE’S BILLION-DOLLARCOMPANIES The highest year of tech investment on record Thanks to rising tech investment activity that is generating larger deals,Europe’s tech ecosystem now competes with the world’s largest tech investmenthubs. Investment is at an all time high, and Europe’s tech ecosystem is growingat a faster rate than anywhere else in the world.European tech companies have made astonishingprogress in the last few years. Globally, Europeis the fastest-growing region for tech businesses,and the number of companies entering into theexclusive club of billion and multi-billion-dollaroperators is growing rapidly.Billion-dollar businesses are no longer as elusive asthey once were. In 2014, Europe’s tech ecosystemincluded 30 billion-dollar companies foundedsince 2000; in 2018, this fgure has shot up to 69,amounting to a cumulative valuation of $240bn1. 14 new businesses worth a billion dollars or morehave emerged in the past year alone2. Theseinclude robotics process automation software BluePrism and end to end digital banking app Revolut. Businesses that do achieve billion-dollar statusaren’t showing any signs of slowing down. In thelast two years, the number of tech companies inEurope worth $5bn or more has almost doubled,from eight in our 2016 report to 14 in today. The unprecedented growth within Europe’s techecosystem is largely down to investor appetite -2017 marks the highest year of tech investment onrecord for Europe’s billion-dollar companies, with$20bn raised within Europe in 2017, increasing from $3bn in 2014. MAPPING EUROPE’S TECH LANDSCAPE The Journey So Far The interest from investors is driving Europe’s billion-dollar tech businesses into the next categoryalong towards titan status: the decacorn. Since2014, fve ‘decacorns’ - companies worth $10bnor more - have emerged into Europe’s tech scene:Yandex, Zalando, Supercell, MobilEye and Spotify.Of these, Spotify has emerged as the frontrunnerto reach the $50bn mark, as its valuation grew122% to $29bn in the last year alone.Within Europe, fve key markets are fuelling thegrowth of billion-dollar businesses: the UK, Sweden,Germany, Israel and Russia. Among these, theUK is leading the way, adding six billion-dollar tech companies to its club, more than any otherEuropean market, and has produced the highestnumber of billion-dollar companies in Europe since 2000.Yet the US and Asia continue to dominate theproduction of new billion-dollar businesses, withthe US generating almost half (48%) of the world’sbillion-dollar companies, Asia creating a third(35%) and Europe producing almost 1 in 5 (17%). Over the next chapter, this report considers thenew entrants to the club – and the key playerswithin Europe’s tech ecosystem that demonstratethe strength and velocity to reach ‘titan’ statuswithin the next few years. 1. Equity funds raised refer to capital raised through primary equity offering. 2. As of the cut-off date (April 30th 2018) for this report. 7TITANS OF TECH: EUROPE’S FLAGSHIP COMPANIES 6 CHAPTER 1 。。。。。。