Inside illo Special Report Startups
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Europe’s fastest-growing companies have shrugged off challenges — from global trade wars to Brexit — to show record levels of revenue growth across the region, according to the FT’s latest ranking of the 1,000 fastest-growing companies.

To make this year’s list, compiled with data provider Statista, entrants needed a minimum 2015-18 compound annual growth rate (CAGR) of 38.3 per cent — a new high.

The very fastest-growing businesses — led by a British fintech and two platforms offering food delivery and ride-hailing services — reported triple-digit growth rates for the period. The spread of companies from a broad range of sectors affirmed Europe’s start-up environment to be in good health, before coronavirus puts these businesses through further stress-testing.

This year’s ranking showed the dominance of western European tech hubs being challenged by emerging rivals in central and eastern Europe. The list featured companies headquartered in 29 locations, with first-time entries from Malta and Bosnia-Herzegovina, and a strong showing from cities such as Warsaw in Poland and Vilnius in Lithuania.

“We have seen a democratisation of start-ups — they can be anywhere,” said James Wise, partner at London-based venture capital firm Balderton Capital. “The access to capital and ability to run off cloud infrastructure means the range of start-up hubs has grown immensely.”

Map showing city hotspots by number of companies

The largest number of fast-growing companies were based in Germany and Italy — each home to almost a fifth of entrants — followed by the UK and France. These four countries accounted for almost three-quarters of the list.

Rory Stirling, partner at seed-stage investor Connect Ventures, said this was no surprise since these countries also had the largest populations and gross domestic product in Europe, as well as the biggest supply of capital and talent. But he noted that other countries were punching above their weight: the increasing diversity of HQ locations in this year’s list reflects how the European market is changing.

“The best bit about [this] is that it can become a self-perpetuating flywheel for Europe,” he said. “We’ve seen time and again how teams from the highest growth companies create a ready-made talent pool for starting and building new companies of the future.”

The company with the highest CAGR was British fintech OakNorth, which specialises in providing finance to small businesses, and is backed by SoftBank, the Japanese conglomerate.

Sunil Chandra, head of OakNorth’s banking technology platform, which is licensed to other financial services businesses, said the key to its growth has been to focus on profitable financial performance — in contrast to some start-ups that prioritise revenue or user growth. “We have managed to scale it so quickly this year,” he said, adding that great companies have still been able to grow despite “headwinds” such as Brexit, coronavirus and macroeconomic issues.

Neither this approach nor the signs that UK businesses were becoming more cautious stop­ped profits at five-year-old OakNorth growing by double digits over the past year.

Bar chart of Share of the overall list by region (%) showing Germany loses ground as central and eastern Europe surges

Fintech start-ups featured heavily on the list. Toby Coppel, partner at London-based investor Mosaic Ventures, said there was a “strong appetite” for new payments, insurance and lending businesses, as “banks continue to under-serve SMEs and underinvest in innovative new products for consumers”. Sharing the podium with OakNorth were Finnish food-delivery service Wolt, followed by Estonia’s Uber-like ride-hailing app Bolt (formerly Taxify), which was also ranked third last year.

The pair represent two of the most hyped areas of tech in recent years, but the rest of the top 10 was unexpectedly diverse, with support services companies such as Spain’s Elements Global Services and French building insulation provider Les Eco-Isolateurs, alongside British games and app maker Gismart.

The broad category of technology accounted for nearly one in five companies on the list, rising to one-quarter when the separate ecommerce and fintech categories were added. Support services made up 9.3 per cent of the ranking, followed by construction with 7.5 per cent.

Chart showing number of tech companies on the FT 1000 list

London remained Europe’s top growth city, according to the list, with 83 companies, almost 20 more than last year. Indeed, the UK start-up sector appeared relatively immune to the negativity around Brexit that has weighed on larger companies.


OakNorth is just one of a number of unicorns — private companies valued at more than $1bn — in the UK. A number of bumper fund raisings took place before March, with Bristol-based artificial intelligence chipmaker Graphcore raising another $150m at a valuation of almost $2bn, and online bank Revolut securing $500m to become one of the most highly valued fintech businesses in Europe at $5.5bn.

13/03/2020 Sunil Chandra of OakNorth. For special reports.
OakNorth's Sunil Chandra, head of OakNorth's banking tech platform: UK remains ahead in fostering start-ups, thanks to capital, skills and the regulatory regime © Charlie Bibby/FT

Mr Chandra, who previously worked in Silicon Valley, said the UK was still ahead of much of Europe in fostering start-ups, thanks to its supply of capital and talented people, as well as a beneficial regulatory regime.

Mr Coppel agreed that the UK has Europe’s deepest pool of both experienced entrepreneurs and high-quality engineers: “The UK remains top choice for entrepreneurs who are scaling a globally significant company.” The main worry around Brexit was being able to continue to attract people with world-class technical skills to the UK, he added.

Matus Maar, managing partner at London-based venture capital firm Talis Capital, said that while it in­vested more in Germany and France in the past year, the UK is still “way ahead of these countries”, with world-leading tech centres outside the capital such as Oxford, Cambridge, Bristol and Manchester.

“It is very unlikely that the UK government would introduce Brexit-related new policies that would damage the tech and innovation sectors,” he added. Speaking before coronavirus hit, venture capital investors were also bullish about the future in the rest of Europe. Mr Coppel said there was no shortage of capital for any stage of growth, with “increased investment in Europe from the leading US venture firms including Benchmark, Sequoia, General Catalyst and Lightspeed”.

Founders have become more confident too, said Mr Wise. A few years ago, companies typically looked to sell out to larger, often US-based, rivals at billion-pound valuations but more recently they have been looking to do fundraising involving similar sums for the next leg of their own growth.

While a wide variety of businesses featured in the FT 1000 — from darts-themed bar chains such as Flight Club to dry-cleaning business Laundryheap — tech remained the biggest area of growth. Investors expected this to continue in the longer term.

Mr Coppel pointed to tech com­panies particularly using machine intelligence to power new software products.

“Opportunities for tech start-ups are larger than ever before,” he said.

Coronavirus presents the sector with an unprecedented combination of opportunity and risk.

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