Yesterday we launched our newest Sifted 250, ranking Europe’s 250 fastest-growing startups over the latest three financial years. Munich-based car subscription company Finn finished top (see the full list here).
But wait, no Lovable? I can almost hear this question being asked by readers everywhere. With good reason: Lovable, the Swedish AI vibe coding sensation, is the fastest company ever to hit $100m annualised recurring revenue (ARR), reaching the milestone in just eight months. Surely it has to be top?
Actually, no, because at Sifted, we believe actual revenue — the basis of our Sifted 250 calculations — is the most objective measure of a startup’s success as it scales. It reflects something fundamental: customers willing to pay for a company’s products or services because they meet real user needs and solve genuine pain points. That makes revenue a stronger long-term signal than hype, valuations or media buzz.
ARR, by comparison, is ultimately a projection: it extrapolates a full year’s revenue from a single month, which means one contract or a short-lived spike can distort the numbers. Realised revenue, by contrast, shows what a company has actually earned.
Our ranking is based on actual revenue growth over three financial years. Lovable’s platform hasn’t even been live for 12 months yet. A single year of rapid growth can be a flash in the pan — weak retention and churn are always lurking around the corner, especially in an era where AI is weakening moats. By looking across three years, the Sifted 250 highlights the companies sustaining growth and turning momentum into staying power.
None of this is to say that we think ARR is unimportant. Saul Klein, founder of London-based VC group Phoenix Court, told Sifted recently that “$100m ARR — however you want to get into the accounting of it — is a much stronger predictor of sustainability than a $100m valuation or even a $1bn valuation.”
Lovable founder Anton Osika has set a $1bn ARR target in the next 12 months — meaning the company may well top the Sifted 250 in years to come.
Rise of the ‘thoroughbreds’
Our ranking, of course, doesn’t showcase every great startup on the continent. Many are building durable businesses at a steadier pace, or are already operating at scale.
But the Sifted 250 shines a light on those compounding revenues the fastest — the startups whose growth trajectories signal real market demand and the potential to become the continent’s next generation of category leaders.
The top-ranked startup this year, Finn (up from fourth last year), illustrates just how quickly — and sustainably — startups can scale their revenues: from small beginnings at €3.2m in 2022, to a breakout year with €125.4m in 2023, before ramping to €444.3m in 2024 — a two-year CAGR of 1,078%.
The broader results tell a powerful story. The number of profitable companies in the ranking has risen from 37 to 57, while “thoroughbreds” generating more than $100m in annual revenue have leapt from four to 18. Average revenues are up from €17.1m to €25.3m.
At the same time, companies are becoming leaner and more efficient: average headcount has dipped from 102 to 98, even as average funding has risen from €71.9m to €93.5m. Rather than simply adding more people, startups are investing more heavily in technology and distribution — harnessing AI to boost productivity. Average revenue per employee has surged 54% from €168k to €258k.
The growth reflected across this year’s Sifted 250 cohort is more significant than individual success stories — it’s evidence of a maturing ecosystem that is bolstering the foundations of Europe’s economy. Together, the companies in this ranking generated €6.3bn in revenue in their latest financial year — creating lasting economic value that is making Europe more prosperous, innovative and competitive on the global stage.
