The state of European unicorns: 2022 wrapped

in the middle of a rock european Tech Hour, A more robust but smaller herd of unicorns emerged this year, as only Europe’s top companies managed to graze on enough healthy capital to navigate the VC recession.

47 companies crossed the $1 billion valuation threshold for the first time in 2022, up from 69 the year before. The drop was inevitable as overall funding fell by around 23% year-over-year. Although still more than triple what was minted in 2020, the unicorn’s fall is a symptom of bleaker conditions in most European tech ecosystems.

Sifted took a deep dive into the data from this year’s cohort of Europe’s mythical beasts.

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From the north-south divide to convergence

Last year’s distribution of unicorns across the continent revealed some worrying trends across the ecosystem. Back then, 75% of unicorns were minted exclusively in the three main ecosystems (UK, France and Germany), while a timid portion was distributed throughout the Nordic countries and the Netherlands.

Every other country saw only a handful of billion-dollar-plus companies, and despite peak levels of VC funding, others had simply never grown a horn.

This year’s cohort has shown some improvements in distribution, with countries like Italy minting its first unicorns, Croatia making a comeback, and Spain racking up its tally of five strong unicorns.

But on the downside, the share of unicorns in Europe’s top three ecosystems plummeted by about 20 percentage points, as the best ones bore the brunt of unstable VC environments.

Although still in the lead, the UK only produced 11 unicorns – 23% of this year’s herd, up from 55% last year. France and Germany achieved 14 between them, compared to 29 in 2021.

The people behind the horns

Sifted tracked a total of 98 founders for the 2022 cohort.

Solo founders occupy most of them, including those of Satispay, Paddle and Rimac Automobili, which are named after their Croatian founder Mate Rimac.

34% of new unicorns had two founders, 26% had three, and only two had four. An average of two co-founders is generally consistent among unicorns of all ages.

The sifted analysis found that just 3.1% of all unicorn founders in the 2022 cohort were women, a 0.7 percentage point drop from 2021. Only three female founders reached the $1 billion valuation mark: Johanna Småros from Relex Solutions, Sinead Fitzmaurice from TransferMate and Hande Cilingir from Insider.

Previously a researcher at the Helsinki University of Technology, Småros took over as CMO when the company was founded in 2005. Relex is the oldest unicorn on this year’s list. This month, Småros, its co-founders and one of the first employees started a €100 million charitable foundation to donate to groups fighting climate change and working to reduce inequality.

Fitzmaurice is Ireland’s first female billion dollar plus founder and has spent around 30 years in audit and finance.

Cilingir is the co-founder and CEO of Istanbul-based marketing tool Insider, launched in 2012.

Fintech (once again)

With 14 new unicorns this year, almost a third of the total, fintech is once again the leading sector. Enterprise software is second with six new unicorns, while security and energy are tied for third with four new unicorns each.

This year also saw unicorns for the first time in emerging subsectors such as carbon capture (Switzerland’s Climeworks) and carbon accounting (France’s EcoVadis), showing that climate tech companies continue to grow in size and impact.

Looking towards 2023

There has hardly ever been a more difficult time for predictions, and this year’s cohort confirmed that while unicorns are not dead, their permanence is not guaranteed.

The cut valuations should not come as a surprise for later stages and follow-up rounds, as expectations recalibrate around new risks and rewards.

Some current unicorns could lose their status by wide margins, just look former unicorn Oda as a warning, but others will continue to rise to the occasion as large amounts of dry powder are yet to be deployed in some high-end opportunities.

Some movement on the M&A side can also be expected along the lines of recent Getir-Gorillas saga, and the outlook for European unicorns seeking initial public offerings remains bleak.

For a deeper data journey of the unicorns of 2022, check out our professional report here.

Federico Scolari is an intelligence analyst at Sifted. Amelie Bahr is a Senior Intelligence Analyst at Sifted.

*Sifting defines a unicorn as a private venture capital backed company valued at $1 billion. To be considered unicorns, startups must have: achieved a $1 billion valuation in any round prior to an IPO or acquisition, been founded after 2005, and be founded and headquartered in Europe. Companies valued at $1 billion at the IPO, but never at any stage of funding before, are not considered unicorns, since they are no longer privately held at that valuation.