Navigating the tech landscape in 2023, Europe faced economic challenges, including the lingering impacts of Brexit, political shifts, and the persistent pandemic. Within this complex backdrop, the continent’s tech industry encountered a funding crunch, notably affecting European unicorns. Atomico‘s findings reveal a stark 43% decline in unicorn funding compared to the previous year, forecasting a total of $45 billion raised in 2023, down from $85 billion.
While early-stage funding maintained stability and Europe fostered a rising wave of new founders, the outlook for unicorns remained subdued, reflecting a global trend of reduced mega-funding rounds. Amid these challenges, there’s optimism for growth, with the hope that some startups securing funding in 2023 could emerge as the unicorns of tomorrow.
The State of European Tech report sheds light on key trends. AI and deep tech startups took center stage, constituting over 50% of the region’s top-funded companies. This underscores a commitment to cutting-edge innovation. Europe witnessed a 40% surge in unicorns since 2019, particularly from tech hubs like London, Berlin, and Stockholm, solidifying the region’s appeal for investors and talent.
As we transition into 2024, the evolving narrative of the European tech industry remains a focal point, with the potential for emerging unicorns to shape the future of technology in the region. The report identifies seven companies attaining unicorn status in 2023, each poised to revolutionise their respective industries.
Quantexa, an AI analytics company
Going with the trend, AI firm Quantexa headquartered in London raised a $129 million Series E funding round. With a valuation of $1.8 billion, the company became the first unicorn in the region in 2023.
The round was led by GIC, a global institutional investor, and existing investors also participated, including Warburg Pincus, Dawn Capital, British Patient Capital, Evolution Equity Partners, HSBC, BNY Mellon, ABN AMRO, and AlbionVC.
Founded by Imam Hoque and Vishal Marria in 2016, Quantexa is geared up to enhance its Decision Intelligence Platform capabilities in low-code data fusion, graph analytics, machine learning (ML), natural language processing (NLP), and artificial intelligence (AI). Its Q Assist, a generative AI assistant, has been creating a buzz in the industry in recent times. Also, its Decision Intelligence platform and suite of solutions for data management, customer intelligence, KYC, risk, fraud, and financial crime have been deployed in over 70 countries.
DeepL – deep learning in language translation
Cologne, Germany-based DeepL, which gives a challenge to Google’s language translation model has secured €100 million fundraising reaching a €1 billion valuation. While Silicon Valley/San Francisco VC IVP led the round, Bessemer Venture Partners, Atomico, and WiL participated in it alongside previous backers Benchmark and btov.
Founded by Jaroslaw Kutylowski in 2009, the company offers a free online translation service and saves its most advanced technology for those who pay via a translation-as-a-service model for businesses. As per the company, it boasts 20,000 business clients, which can access its AI-powered translation services via a web translator, browser extensions, desktop and mobile apps, and an application programming interface (API) that allows them to embed the technology into their software.
Synthesia, gen AI for enterprises
A gen AI company for enterprises, Synthesia bagged $90 million in a Series C round, achieving a post-money valuation of $1 billion, making it the third unicorn to be announced in Europe this year. The round was led by Accel, with participation from NVIDIA’s venture capital arm NVentures, Kleiner Perkins, GV, and Firstmark Capital.
Established by Lourdes Agapito, Matthias Niessner, Steffen Tjerrild, and Victor Riperbelli in 2017 in London, is Synthesia, a digital media platform that allows users to create professional AI-generated videos simply by typing text. The photo-realistic human faces and speech are indistinguishable from real video but without the need for cameras, actors, or expensive film studios.
As per the company, users can make polished video presentations in-browser with no professional expertise required from just text. Its technology helps over 50,000 businesses, including Amazon in creating custom AI avatars used in instructional and corporate videos.
AI21 Labs, an AI leader from Israel
A few months back, the Israeli unicorn snapped $155 million in a Series C funding round. The round includes investors Walden Catalyst, Pitango, SCB10X, b2venture, Samsung Next, and Prof. Amnon Shashua with participation from Google and NVIDIA. It brings the valuation of the company to $1.4 billion. AI21 Labs intends to use the funding to accelerate the growth of its highly accurate text-based generative AI services for enterprises.
Founded in 2017 by AI luminaries Amnon Shasuha, Yoav Shoham, and Ori Goshen in Tel Aviv, AI21 Labs was one of the first to bring generative AI to the masses. Its approach goes beyond models, building AI systems that are easy to integrate and that generate reliable, trustworthy, and accurate results with more refined control than any standalone existing model.
With the developer platform AI21 Studio, businesses can build their own generative AI-driven applications and services with the world’s most advanced family of language models.
Defense AI company Helsing
Munich-headquartered Helsing secured €209 million in its Series B funding round, with General Catalyst leading the investment. Swedish entity Saab also participated as a strategic investor, marking this funding round as the largest in European AI company history. Helsing is in plans to use the funds to expand its operations in France, Germany, and the UK.
Spotify founder Daniel Ek-backed Helsing was founded by Gundbert Scherf and Niklas Koehler in 2021. It works with the mission to develop software-based capabilities aimed at safeguarding democracies. The company leverages AI and software to facilitate swifter and more precise decision-making while optimising data usage at tactical, operational, and strategic levels.
Since 2022, the company has been actively engaged in Ukraine, providing frontline operations with capabilities and technology, deploying personnel on an ongoing basis. In June, the German government chose Helsing and partner Saab to supply AI-enabled electronic warfare capabilities for the forthcoming Eurofighter update.
Climate tech unicorn 1KOMMA5°
Yet another German unicorn is Hamburg-based 1KOMMA5°. It raised €430 million in a Series B round, which helped it reach a valuation of €1B in less than two years of its debut. The new round was led by G2VP, a California-based VC firm.
1KOMMA5° was founded in 2021 by Jannik Schall, Micha Grueber, Michael Hinderer, Philip Liesenfeld, and Philipp Schröder – an ex-Tesla country director. Aiming to be a one-stop shop for sale, installation, and services related to solar, electricity storage, and charging infrastructure in Europe, 1KOMMA5°’s proprietary Internet of Things (IoT) system called Heartbeat, which will smartly optimise power consumption to allow for energy savings to its consumers.
Having acquired Viasol, the company has already expanded into six new markets. Now, 1KOMMA5° plans to continue its expansion further into Spain, Italy, Austria, and Switzerland.
Builder.ai, an AI trailblazer
London-based AI firm Builder.ai secured a $250 million funding round led by the Qatar Investment Authority (QIA). Other investors in the deal included Iconiq Capital, Jungle Ventures, and Insight Partners.
Builder.ai was founded by Sachin Dev Duggal in 2017 and makes so-called “no-code” and “low-code” platforms. Using its software, anyone can develop and manage apps, from tech-shy artists looking to sell their work online to design professionals with limited programming experience.
It is expected to reshape the software development landscape. By democratising access to software development, the company empowers businesses of all sizes to embrace digital transformation and accelerate their growth.
