Startups in Europe: how many startups are there and what's the potential?
The startup ecosystem in Europe is diverse and dynamic, with many different countries and regions contributing to its growth. European startups are known for their innovative ideas and technologies, and they are often at the forefront of emerging industries such as fintech, artificial intelligence, and renewable energy.
One trend that has been on the rise in Europe is the growth of "unicorn" startups, which are privately-held companies valued at over $1 billion. Europe is home to many successful unicorn startups, such as Deliveroo, Spotify, and Farfetch. These companies have helped to put Europe on the map as a hub for startup activity and innovation.
In terms of how European startups compare to their counterparts in the United States, there are some differences. European startups tend to be more focused on innovative technology and disruptive business models, whereas many US startups are focused on consumer-oriented products and services. However, European startups often face challenges such as a lack of access to funding and a fragmented market, which can make it difficult for them to scale up and compete with larger, more established companies.
As for the top startup ecosystems in Europe, some of the most successful and dynamic regions include London, Berlin, and Paris. These cities are home to many successful startups and have a thriving startup culture, with support from local governments and a large pool of talented entrepreneurs and investors. Other top European startup ecosystems include Amsterdam, Barcelona, and Stockholm.
In terms of the investment scene in Europe, there has been a growing amount of venture capital and other forms of funding available for startups in recent years. This has helped to support the growth of the startup ecosystem and has made it easier for startups to access the capital they need to grow and succeed. However, there are still challenges and barriers to investment in Europe, such as a lack of standardization across different countries and regions.
In 2021, Europe was called the “fastest growing region for VC investment,” with startups attracted $121 billion of capital, compared to $41 billion attracted in 2020. Today, Europe hosts over 320 unicorn startups, with almost every third of them being created in 2021.
France, Germany, Italy, Spain, and the UK together host over 1,200 business incubators or accelerators, while the Netherlands alone has more than a hundred of them.
The reason for such an impressive growth lies in how the European startup ecosystem embraces new technologies and online services to adapt to global changes. Some countries do it way better than others.
Startup founders should consider a slew of factors when it comes to choosing the best country to host their company.
Looking to apply for EU Funding? Check out the article on writing a successful application here.
There is plenty of research and annual reports that explore the investment climate, costs of doing business, legislation environment, and the innovative potential of various countries’ economies.
The UK: the highest attracted investments
The UK startup ecosystem managed to almost double the overall investment flow from $9.6 billion in the second half of 2020 to the astonishing $18.9 billion in the first half of 2021.
The country attracts startup founders with a good business climate and relatively low costs of doing business, thanks to declining corporate tax rates, business-friendly regulations, and better access to venture capital financing.
On top of that, startups who choose the UK to be their base of operations can also benefit from a large number of governmental and private organizations assisting to freshly-created ventures.
The only drawbacks that pulls the UK back from being the ultimate landing pad for startups in Europe are high cost of living in the country and a huge competition for experienced developers, which dramatically increases the hiring cost of skilled IT professionals.
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The Netherlands: the highest economic health score
No surprise, the Netherlands is also on the list of the top European countries for aspiring entrepreneurs to establish a business, along with the UK, Germany, Sweden, and Switzerland.
The economy of the Netherlands has been consecutively acknowledged among the healthiest and the most innovative in Europe. Dutch startups enjoyed a venture capital investment flow of $3.68 billion for the first six months of 2021 and the numbers keep growing.
We have been in the Netherlands since 2018, participated in several incubators and received funding from the Dutch Government on numerous occasions. We are happy to share our experience with you and can help with preparation of your funding applications, incubator outreach and other things.
Also, we have a completely FREE module about Startups in the Netherlands where you can learn about setting up a company, getting funded, dealing with the legal and tax systems. Sign up for the free startup school and navigate to "Startups in the Netherlands" module by typing "Netherlands" in the search.
The country continues its ascension in the annual ranking by NimbleFins as one of the best countries for startups in Europe. Thanks to high levels of education and staff training, the Netherlands scores high points in Labor Force Quality, while business-friendly legislation and a great number of startup-focused incubators like StartupAmsterdam provide excellent climate for young innovative ventures.
On the other hand, high costs of doing business require that startups in the Netherlands provide well-thought-out business plans, in order to make it before receiving their first venture capital investment or one of dozens of governmental or non-governmental grants.
Are you interested in incubators in the Netherlands? Do you want to relocate your startup to Europe or are looking to establish a company here and get funded? Send us a quick message and we will consult you for free.
Young and promising ecosystem for startups in Malta
For those who strive to launch a project in Malta – and get a residence permit along the way – there is the Malta Start-Up Residence Program.
The program is focused on both experienced entrepreneurs and startups at university level who fulfil the requirements set by the government and contribute to the country's economy.
While a number of other European countries have adopted similar programs for quite some time now, Malta is new to it. But it doesn't seem to be a problem for the island nation to develop a progressive attitude and favorable conditions for attracting foreign investment and talent as part of this initiative.
We have our own R&D&I base in Malta that we established in 2021 (read our press release here) and received funding from Malta Enterprise. We are happy to share our experience with you and can help with preparation of your funding application and other things.
Also, we have a completely FREE module about Startups in Malta where you can learn about setting up a company and getting funded. Sign up for the free startup school and navigate to "Startups in Malta" module by typing "Malta" in the search.
Malta is well-known for having a long history of entrepreneurship and family businesses, which can be proud of their success stories.
As of now, the most promising and demanded sectors for running a business in Malta are information technologies, including gaming and blockchain, the consumer sector, and healthcare.
It gives a clearer picture of the advanced business infrastructure in Malta that offers entrepreneurs highly-developed IT infrastructure, accessibility, and business support services.
Malta has recently announced their startup visa. Read about it here.
Are you interested in incubators in Malta? Do you want to relocate your startup to Europe or are looking to establish a company here and get funded? Send us a quick message and we will consult you for free.
Overall, the startup scene in Europe is vibrant and dynamic, with many exciting opportunities for entrepreneurs and investors. Despite some challenges, European startups are at the forefront of innovation and are driving the growth of new industries and technologies.
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