Why there has never been a better time to be an immigrant founder in Europe
With the growth of Europe’s venture capital ecosystem, starting a business is going to be much easier for immigrant founders.
As ecosystems mature, they naturally become more accessible to immigrants, who outperform. By the end of 2022, the US had a total of 704 unicorns, the highest number worldwide. With a developed venture capital ecosystem, immigrant founders are able to gain investment early on, giving space for them to innovate in a wide range of industry sectors. It’s no wonder that 55% of the US’ unicorns are founded by immigrants, they make some of the best entrepreneurs. Here we will take you through key data on European countries, demonstrating that while ecosystems grow, the number of immigrant-founded unicorns will grow also.
THE UNITED KINGDOM
The UK currently has 45 active unicorns, as well as an additional 17 that have previously exited. Beauhurst revealed that 7 start-ups became unicorns in 2020, while a further 25 did so in 2021. This is the biggest increase in the number of unicorns that the UK has seen to date. Europe’s venture capital industry is coming out of its infancy, which means that there are more people in the ecosystem with the experience to advise new founders and, more importantly, greater access to funding early on in the game. Start-ups in this new era now have the opportunity to reach their full potential quicker.
When it comes to fintech, it turns out that the UK is the prevailing champion, receiving the most investment worldwide. When we take a closer look at the UK’s fintech start-ups, we find that many have been co-founded by immigrants including Deliveroo, WorldRemit, Revolut and GoCardless. Immigrants in the UK account for a growing portion of unicorn founders. Immigrants have founded 36% of all UK unicorns created before 2020 and 22% of unicorns created prior to 2014. The other immigrant co-founded unicorns include Rapyd, Improbable, Arrival, and Lendable.
If you are looking to start your new venture in Europe, the UK isn’t the only one you need to watch out for. At the beginning on 2022, Emmanuel Macron, announced on Twitter that France had reached 25 unicorns, which is 3 years earlier than the country’s intended target. In 2018, France was only in possession of 6 unicorns. With a 317% increase over 4 years, this European country is creating unicorns faster than most of the other ecosystems on the continent.
Furthermore, there has never been a better time to be an immigrant entrepreneur in France. Dealroom data revealed that in the Q2 of 2022, French start-ups raised a total of €3.7 billion in venture capital funding. The data also revealed that the ecosystem’s value grow to more than €260 billion. This increase is a result of attracting more foreign investment as well as the implementation of new policies that have facilitated the ecosystem’s growth, such as La French Tech Visa. Over the next 5 to 10 years, the French tech ecosystem will continue to grow, leading France to have as many unicorns as the UK today.
What has happened to the US & the UK will happen in Germany. German start-ups tend to cater to the large German markets. Start-ups will need to branch out into international markets in order for the ecosystem to grow. With the ability to bring an international network to the ecosystem, immigrant entrepreneurs will be vital throughout this process. The Migrant Monitor report 2021 revealed that a staggering 78% of immigrant founders expressed intent on expanding their start-up to other markets.
As the number of unicorns increases, the tech ecosystems mature causing the share of unicorns founded by immigrants to also increase. Germany is another growing ecosystem with 24 unicorns. Already, we are seeing immigrant co-founded unicorns doing this in Germany. These include Auto1, Choco, Personio, GetYourGuide, Razor and Omio.
European countries are in the process of acquiring more and more unicorns. When we look at the US, we can see a correlation between the increase in unicorns and the increase in immigrant founded-unicorns. This trend can now be seen throughout Europe’s biggest ecosystem, the UK.
Should this correlation continue to hold, it implies that immigrants will create 2 out of every 3 new unicorns in Germany over the next 5 to 10 years. The same goes for France. There has never been a better time for immigrant entrepreneurs to start up a business in Europe. European countries are keen to attract immigrants with innovative business ideas with the goal of driving their economies further.
Here at No Label Ventures, we are eager to hear your business idea and help you through the process. If you are an entrepreneur looking to start your business in Europe but not sure where to start, send us an email here.