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Unicorn Tech Startups – 2020

Unicorn Tech Startups – 2020

A unicorn, in the financial realm, refers to privately-owned startups that are valued above $1 billion.“The value of unicorns is generally based on how investors and venture capitalists feel they will grow and develop, so it all comes down to longer-term forecasting. This means their valuations have nothing to do with the way they perform financially. In fact, many of these companies rarely generate any profits when they first get running”.[1] Thus, the valuation of unicorns usually comes from funding rounds of large venture capital firms investing in these start-up companies.

The Startups Unicorns of this decade have latched on to the edge of technologies like smartphones, cloud computing, etc., and have combined it with the booming reach and exposure offered by social media to gain the Unicorn status. From this perspective, if we converge our focus on Europe, the Tech Startups that have emerged as the top funded business ventures as per CB Insights as of 03 February 2020 [2] are:

  • Klarna, Sweden
  • N26, Germany
  • Glovo, Spain
  • Bla Bla Car, France
  • OutSystems, Portugal
  • Vinted, Lithuania
  • Acronis, Switzerland
  • Bolt, Estonia
  • Klarna, Sweden

In the year 2005 Sebastian Siemiatkowski, Niklas Adalberth, and Victor Jacobsson founded “Klarna Bank AB, commonly referred to as Klarna” [3], at Stockholm, Sweden. The aim of the founders was to craft a business that would furnish a simple and secure online shopping payment interface for consumers and vendors. Initially funded by the angel investor Jane Walerud, who was an ex-sales manager at Erlang Systems; the business was later upheld by the funding of Investment AB Öresund.

In 2010, the San Francisco-based Sequoia Capital investing in Klarna and augmented’ sits financial presence. With such robust financial boosts, Klarna’s revenues surged over 80%. “In 2019, Klarna raised $460 million with plans to expand payment presence in the US, with participation from Dragoneer Investment Group, Commonwealth Bank of Australia, HMI Capital, Merian Chrysalis Investment Company Limited and others.This funding round valued the company at $5.5 billion, becoming the largest fintech start-up in Europe”.[3]

N26, Germany

“Max and Valentin founded Number 26 in 2013 to set new standards in the banking industry by integrating the most innovative technology, and to offer 100% digital banking experience that is customer-centric, user-friendly, and transparent”.[4] In April 2015, Number 26 received €10 million from Valar Ventures, which was co-founded by Peter Thiel. This was the series A, first significant round, venture capital financing of the firm, which was initially started without a banking license. In July 2016, it received its own banking license from the Federal Financial Supervisory Authority of Germany, BaFin, and was re-branded N26.[5]

In March 2018, N26 raised $160 million in a series C round by Chinese internet giant Tencent Holdings and Allianz X (Allianz). In January 2019, N26 raised an additional $300 million in a series D round led by Insight Venture Partners with Singapore's sovereign wealth fund GIC and a few existing investors also participating at a valuation of $2.7 billion. With its new valuation of $2.7 billion, N26 overtook Revolut as the most valuable mobile bank in Europe. On 11 July 2019, N26 collaborated with Axos Bank and launched its services in the United States. The following week, the company extended its series D round with an additional $170 million investment, valuing the company at $3.5 billion. [4]

Glovo, Spain

Glovo is a Spanish start-up founded in Barcelona in 2015. Oscar Pierre, the current CEO, founded the company and Sacha Michaud is the co-founder. Glovo is an on-demand courier service that purchases, picks up, and delivers products ordered through its mobile app. As of July 2019, Glovo is operational in more than 20 countries across Africa, Asia, Central America, Europe, South America, and the Caribbean. [6]

The company was endowed with a €150 million (approximately $166M) through its Series E round funding by Abu Dhabi state investment company, Mubadala. This investment was acquired by the company in December 2019, closely preceded by the April 2019 funding pumped in through a Series D round funding of €150M, and the mid-2018 Series C round funding of $134M. [7] [8]

The massive income attracted by the company’s impeccable business potential has pushed its valuation past the $1BN mark making it only the second privately held business in the country to achieve such a valuation. Oscar Pierre, Glovo’s CEO, asserts that the focus for the business in 2020 — now flush with Series E cash — will be achieving profitability. [8]

Bla Bla Cars, France:

Frédéric Mazzella together with the co-founders Francis Nappez and Nicolas Brusson, built the world’s leading long-distance carpooling platform, BlaBlaCar, which today is a global, trusted community of 87 million drivers and passengers in 22 countries.The platform connects people looking to travel long distances with drivers heading the same way, so they can travel together and share the cost. [9]

In 2009, the company raised €600,000 from the founders and their friends and family. In June 2010, Comuto raised 1.25 million euros from ISAI run by Jean-David Chamboredon. In January 2012, Comuto raised 7.5 million euros from Accel Partners, ISAI and Cabiedes & Partners in order to develop its activities in Europe. In July 2014, BlaBlaCar raised 100 million US dollars from Index Ventures with the objective of becoming the number one carpool service. In September 2015, the company raised another USD 200 million, primarily from Insight Venture Partners, in a round that valued the company at $1.6 billion. [10]

OutSystems, Portugal

The Portugal-based enterprise software firm Outsystems was founded by Paulo Rosado at Lisbon, Portugal, in the year 2001. The company offers a low-code platform for the development of Enterprise Web and mobile applications that are deployable on cloud (or) on premise (or) hybrid environments. Started with a vision to transform how enterprise software is delivered, today, the company is headquartered in Atlanta, USA, and is recognized as a market leader with over 1200 customers in 60 countries. [11] [12] [13]

Initially, OutSystems managed to raise 2.2 million Euros, and, in the year 2007, ES Ventures, today Armilar Venture Partners, invested 3.2 million Euros. Guidepost Growth Equity invested around $55 million in OutSystems in the year 2016, and it has recently raised $360 million in an investment round from KKR and Goldman Sachs. This has raised the funding values of the company to more than $1 billion. [15]

A report in the Forbes magazine claims, “Despite having reached the 100 million Euros revenue benchmark, OutSystems operates in a market with a potential value of 22 billion Euros. In the last six years, OutSystems has recorded soaring rates of growth with turnover spiking by an annual average of 41%. Last year’s revenue was up by 63%, surpassing 100 million Euros”. [15] It is recognized as one of the fastest-growing technology companies with revenues well above $100 million and growing at more than 70 percent annually. [14]

Vinted, Lithuania

Vinted was founded in the year 2008 by Milda Mitkute and Justas Janauskas at Vilnius, Lithuania. Aimed at testing a prototype virtual platform wherein the Lithuanian women could trade their clothes, the venture has become an online marketplace and community that allows its users to sell, buy, and swap secondhand clothing items and accessories. The company swiftly spread its business in Europe, and in 2010, launched its presence in the United States. [16]

Subsequent to its launch in the United States, Vinted raised 128 million Euros ($140 million) in a funding round led by Lightspeed Venture Partners, along with Sprints Capital, Insight Venture Partners, Accel and Burda Principal Investments. This investment round made Vinted to be valued at more than 1 billion euros, making it Lithuania’s first tech unicorn. [17]

Acronis, Switzerland

Acronis International GmbH, simply referred to as Acronis, was founded in Singapore by Serguei Beloussov, Ilya Zubarev, Stanislav Protassov and Max Tsyplyaevas a data backup and recovery company in 2003.[18][19] Presently, Acronis is a global leader in cyber protection headquartered in Switzerland, and has more than 1,400 employees in 18 countries. [19]

In 2004, Acronis sold part of its business to an outside firm in a secondary transaction for $11 million. On September 18, 2019, disclosed the receipt of a $147 million investment round led by Goldman Sachs. This investment round has set the valuation of the company to over one billion dollars. With the funding round led by Goldman Sachs, Acronis can increase its engineering capabilities and acquire new teams and technologies to accelerate the development of the Acronis products.[20]

Bolt, Estonia

Bolt, founded by Markus Villig in 2013 in Tallinn, Estonia is a ridesharing company that develops and operates the Bolt mobile application, which allows people to request a taxi or private driver from their smartphone, as well as electric scooters and food delivery services. As of December 2019, Bolt is operational in 35 countries in Europe, Africa, North Africa, West Asia, North America and Australia. The company has 25 million customers globally and more than 500,000 drivers use the platform to offer rides. [21]

Initially, Bolt had raised over €2 million in investment capital from Estonian and Finnish angel investors. In August 2017, Didi Chuxing invested an undisclosed "eight-figure U.S. dollar sum" in the company. In 2018 Daimler, Didi and others initiated a funding round with a $175 million investment that led to the 1 billion dollar valuation for the company, making it a unicorn. [21] In a disclosure on its website dated January 16, 2020 Bolt has declared that it has entered into a €50 million quasi-equity facility agreement with the European Investment Bank (EIB), the European Union’s long-term lending institution. [22]

Reference:

  1. https://www.investopedia.com/terms/u/unicorn.aspx
  2. https://www.cbinsights.com/research/top-startups-europe-map/
  3. https://en.wikipedia.org/wiki/Klarna
  4. https://n26.com/en-de/about-n26
  5. https://en.wikipedia.org/wiki/N26_(bank)
  6. https://en.wikipedia.org/wiki/Glovo
  7. https://techcrunch.com/2019/04/30/glovo-the-on-demand-deliver-anything-local-app-raises-169m-series-d/
  8. https://techcrunch.com/2019/12/19/spains-glovo-grabs-166m-series-e-for-its-deliver-anything-app/
  9. https://blog.blablacar.com/about-us
  10. https://en.wikipedia.org/wiki/BlaBlaCar
  11. https://www.outsystems.com/company/
  12. https://en.wikipedia.org/wiki/OutSystems
  13. https://techcrunch.com/2018/06/05/portugals-outsystems-raises-360m-from-kkr-and-goldman-sachs/
  14. https://www.outsystems.com/news/outsystems-raises-360-million-investment-from-kkr-and-goldmansachs/
  15. https://www.forbes.com/sites/forbesinternational/2018/07/13/is-outsystems-portugals-latest-unicorn/#408e5c6d3633
  16. https://en.wikipedia.org/wiki/Vinted
  17. https://www.bloomberg.com/news/articles/2019-11-28/first-lithuanian-unicorn-born-as-vinted-raises-140-million
  18. https://en.wikipedia.org/wiki/Acronis
  19. https://www.acronis.com/en-in/
  20. https://www.acronis.com/en-us/pr/2019/09/18-12-09.html
  21. https://en.wikipedia.org/wiki/Bolt_(company)
  22. https://blog.bolt.eu/en/bolt-enters-e50-million-funding-partnership-with-eu-investment-bank/