As Silicon Valley charts a path forward through the post-COVID economic environment, Europe is emerging as a hot region for high-growth startups.
That’s not to say that the U.S. VC market is fizzling by any means, but the trendline points across the pond. Increasingly, European tech startups are growing into $1 billion+ businesses – or “Eurocorns” – and they’re doing so at a faster rate than their U.S. counterparts.
Year to date, Europe has minted 41 new unicorns, which is 58% of last year’s total. The United States has minted 159, which is 45% of last year’s total.1 In other words, the gap between the regions may be narrowing.
On the whole, the overall population of Eurocorns exceeds $350 billion2, and more are likely to come given that European venture capitalists are sitting on over $20 billion of dry powder.
That’s not to say that private companies in Europe aren't facing equally challenging economic headwinds as those in the United States. Issues like high inflation, tightening monetary policy, and the effects of the Russia-Ukraine war are notably acute in the region, with a particular impact on energy prices.
But while global venture funding tumbled in the second quarter, Europe only saw a 13% quarter-over-quarter decrease, compared with a 25% decline in both the United States and Asia, according to CB Insights.3
Only 29 IPOs occurred in Europe in Q2 2022, down from 142 in Q2 2021, according to PwC, and the pipeline for public debuts is likely to remain delayed for some time.4
Until then, we could see more companies and investors turning to private markets in search of liquidity – and Forge’s expansion into Europe offers the potential to broaden private market access for investors, shareholders, and companies.
Forge Global Holdings, Inc. (together with its subsidiaries, “Forge”) is a leading provider of marketplace infrastructure, data services and technology solutions for private market participants. By combining world-class trading technology and operating expertise, Forge Markets enables private company shareholders to trade private company shares with accredited investors. Forge Company Solutions, Forge Data and Forge Trust along with Forge Markets help provide additional transparency, access and solutions that companies, institutional and accredited investors need to confidently navigate and efficiently transact in the private markets. Securities-related services are offered through Forge Securities LLC (“Forge Securities”), a wholly-owned subsidiary of Forge. Forge Securities is a registered Broker Dealer and Member of FINRA/SIPC.
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