{"id":7752,"date":"2021-07-01T13:54:17","date_gmt":"2021-07-01T20:54:17","guid":{"rendered":"https:\/\/maccelerator.la\/?p=7752"},"modified":"2021-07-01T13:54:19","modified_gmt":"2021-07-01T20:54:19","slug":"b2b-the-european-investment-ecosystem-is-maturing","status":"publish","type":"post","link":"https:\/\/maccelerator.la\/en\/blog\/venture-capital\/b2b-the-european-investment-ecosystem-is-maturing\/","title":{"rendered":"B2B the European investment ecosystem itself is maturing"},"content":{"rendered":"\n
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American tech companies have earned accolades across the world for their growth<\/a> and innovation<\/a>. Silicon Valley has become a major startup hub for startups to exhibit their potential, hire talent, and gain funding<\/a> through venture capital. <\/p>\n\n\n\n

European entrepreneurs and investors who have long envied the success of the U.S. as the stage for startups are seeing signs of changing times in their home countries. <\/p>\n\n\n\n

The tech landscape has grown quickly over the past several years.<\/p>\n\n\n\n

Revolut, FlixBus, and Deliveroo are among the B2C start-ups that have been best known for shaping this new European start-up space. In recent years, we\u2019ve seen the growth of European B2B startups like UiPath, sender, Personia, and Klarna.  It is now a maturing market, positioning  Europe to have the competitive strength to hold its own in the startup ecosystem.<\/p>\n\n\n\n

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Rapid Growth in the European Startup Scene<\/h2>\n\n\n\n

One of the key indicators of Europe\u2019s evolution in the tech ecosystem was in 2017 when it raised a record 25 billion euros<\/a>. <\/p>\n\n\n\n

As compared to a short five years earlier of raising 4.3 billion, that\u2019s nearly a 500% increase<\/strong>. Europe seemed posed for this type of growth, given its diversified population. There are over 40 countries that make up the European continent. Each country brings its own culture, language, and legal system.\u00a0<\/p>\n\n\n\n

Of course, there are some disadvantages that this brings. For example, it is more difficult for a European startup to expand and scale<\/a> its operations outside of its home country. The language and regulatory guidelines create obvious problems. Yet, this is also its strength. The diversity<\/strong> found in this region allows for new ideas and creative endeavors to become possible.\u00a0<\/p>\n\n\n\n

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Key Trends<\/h2>\n\n\n\n

European startups<\/strong> have not only been able to raise record amounts of euros over the past several years. The size of the deals has also risen. For example, in 2017 there were 26 deals that were worth more than 100 million euros<\/a> as compared to the previous year that had half the amount.\u00a0<\/p>\n\n\n\n

\"Rapid
Photo by Maryna Yazbeck.<\/figcaption><\/figure>\n\n\n\n

Uk has been home to much of this growth. Over 7.1 billion euros<\/strong> was raised by British tech firms in 2017. German startups have also realized major increases in investment volume. They have raised nearly double in 2017 at 4 billion euros.<\/p>\n\n\n\n

Most of the rounds of investment in these European tech startups have originated from European VC<\/a> funds. However, international investors are taking a bigger role in funding during late-stage rounds<\/strong>. Softbank (Japan) , Naspers (South Africa), JD.com (China), and GIC (Singapore) all made investments in major rounds of funding for various European-based startups.\u00a0<\/p>\n\n\n\n

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European B2B Start-ups <\/h2>\n\n\n\n

B2C startups<\/strong> in the United States have what has propelled the country to its status as a high-tech and entrepreneurial region. Europe has a few solid B2B success stories. But it\u2019s been the B2B start-ups<\/strong> that garnered attention for their growing wave of high-performing start-ups. The innovation found in the European start-up space is in a place where it can rival its U.S. peers.\u00a0<\/p>\n\n\n\n

Data provided by McKinsey<\/a> indicates that European B2B startups are outperforming their counterparts in the U.S. in funding efficiency. This metric references how much value is invested per capita. Revenue would be an example of such a value. <\/p>\n\n\n\n

The data<\/a> shows that on average the revenue per dollar invested is 2.4 times greater than B2B startups based in the U.S. B2C startups in Europe also have this advantage over their U.S. counterparts, though it\u2019s not as glaring as the B2B startups. About 1.2 times more revenue is generated by European B2C startups than US B2C companies. <\/p>\n\n\n\n

Another interesting statistical reference that shows the growth of B2B startups in Europe is when you look at the valuation-to-investment ratio. This ratio is nearly 10 percent higher when compared to B2B startups based in the U.S. In addition, B2B startups in Europe outperform B2B startups located in this region. <\/p>\n\n\n\n

Here are a few reasons that European B2B startups are outperforming<\/strong> other companies in this region and in the U.S.:<\/p>\n\n\n\n