\European tech startups and scaleups to watch in 2021

\European tech startups and scaleups to watch in 2021

Europe’s startup scene is often overshadowed by Silicon Valley, but the continent is gaining ground with more than 70 tech startups valued at over $1bn.

Europe’s startup scene is often overshadowed by Silicon Valley, but the continent is gaining ground with more than 70 tech startups valued at over $1bn.

Here, Sifted’s reporters dig into the data, strategy and challenges behind the most important European startups and scaleups. We ask which companies are making waves and which are the ones to watch in 2021?

Keep reading below and stay informed about Europe’s new economy!

For in-depth analysis of the French tech ecosystem, dive into our recent report here.

(P.S The data is from European Startups with valuation estimates from Dealroom. If there is anyone missing from this list, or anything is wrong, please let us know by email at [email protected]).

Key

Year founded

Amount raised

Last funding round

Valuation

Employees

Klarna's logo

Klarna

Payment solutions for online storefronts

Stockholm, Sweden

2005

€3,000m

GROWTH EQUITY

€40.0bn

1000-5000

Sifted Take

Don't be fooled by Klarna's candy-pink branding, buzzy slogans and glitzy advertising. The fintech recently secured a $10.65bn valuation and is eyeing a public listing in the next couple of years.

Klarna offers “buy now pay later” loans at selected retailers, giving consumers instant credit at checkout, which they then pay back over in installments. It now operates across most of Europe, as well as Australia and the US.

Founded in 2005 in Sweden, the company makes most of its money from retailers, who give Klarna a chunk of the transaction price each time. Consumer late fees and interest make up an undisclosed part of its revenue, but the company was profitable for 10 years up until 2019.

Nonetheless, Klarna has come under fire in recent years for failing to flag the dangers of debt to consumers, with pressure groups lobbying for clearer advertising standards.

Read more: Pablo Escobar’s brother is suing Klarna for millions

Is Klarna worth $11bn?

Northvolt's logo

Northvolt

Lithium-ion batteries

Stockholm, Sweden

2016

€4,000m

GROWTH EQUITY

€3bn

500-1000

Sifted Take

When green energy startup Northvolt raised $1bn in 2019, it came as quite a surprise.

Based in northern Sweden and founded by a former Tesla employee, Northvolt is building a lithium-ion battery cell factory to supply the world's growing fleet of electric cars — and, perhaps, other forms of transport too.

It hit the headlines again in 2020, when Spotify founder Daniel Ek announced that he was participating in a new $600m funding round into Northvolt; the first investment from his €1bn 'moonshot' fund.

Read more: This Swedish startup just raised $1bn to build a battery farm to rival Tesla’s “gigafactory”

Spotify founder backs gigafactory as first deeptech investment

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UiPath's logo

UiPath

Designs and develops robotic process automation software

robotics / enterprise software

sifted.eu/articles/daniel-dines-uipath-brunch

Bucharest, Romania

2005

€1,800m

SERIES E

€9.3bn

1000-5000

Sifted Take

Designing and developing software robots to automate repetitive business tasks, UiPath has experienced explosive growth over the last few years.

Its valuation has jumped 6000% in the last few years to $7bn as investors bet it will become a global champion. The wider RPA sector is growing over 60% a year, positioning market leader UiPath well to benefit from the trend.

Of course, companies are waking up to the fact that RPA is not just a magic bullet that can fix all their problems (indeed, it can create a fair few), but it’s still powerful if used correctly.

The big question for cofounder Daniel Dines is if it’s going to be a big global RPA company or the big global RPA company. Rivals include companies such as Blue Prism in the UK and Automation Anywhere in the US.

The other big question is when they list on the stock market and where.

Read more: The Romanian unicorn automating your job

Eigen Technologies's logo

Eigen Technologies

Provides machine learning, qualitative analysis tool for businesses

London, UK

2014

€55m

SERIES B

€18-27m

100-500

Sifted Take

The financial services industry goes through a lot of documents, so of course its interested in natural language processing capabilities — and Eigen Technologies is a startup that does just that. Founded in 2014, their clients include Blackrock, Allen & Overy, and one-third of all G-SIBs. In 2020, its Series B round raised $42m, led by Goldman Sachs and ING. Read more: How AI is changing the game for banks

Ki Insurance's logo

Ki Insurance

Digital Lloyd's of London syndicate

London, UK

2020

€455m

SEED

10-50

Sifted Take

Launched in May 2020, KI is off to an impressive start. Using an algorithim designed in collaboration with UCL, it will evaluate Lloyd's policies and automatically quote using a platform built by Google Cloud. In 2020 it raised $500m in a seed round led by Blackstone and Fairfax Financial Holdings.

AUTO1 Group's logo

AUTO1 Group

Europe's leading digital automotive platform

Berlin, Germany

2012

€1,002m

CONVERTIBLE

€3bn

1000-5000

Sifted Take

Berlin-based Auto1 is a pan-European online marketplace for used cars. It values and buys used cars from individuals, dealerships, and manufacturers — then sells them for a profit to dealerships.

Used cars are a huge market, with around 39m cars sold every year in Europe (compared to 17m new). Within the market, Auto1 it’s a giant. The company has taken in €460m from Japanese conglomerate Softbank and since launching in 2012 has expanded into more than 30 countries. It says it is now trading with more than 35,000 professional partners and selling more than 40,000 cars per month.

But watch out, because there are rivals. Cazoo, the brainchild of Zoopla founder Alex Chesterman, has raised €60m pre-launch to sell second-hand cars direct to consumers later in 2019. It’s a slightly different model, as it’s selling to consumers not dealers, but still a potential threat as market dynamics in this space evolve swiftly.

Now the company is headed for a massive European IPO.

Revolut's logo

Revolut

A world beyond banking — a secure, mobile-based current account that allows you to hold, exchange and transfer without fees in 25 different currencies

London, United Kingdom

2015

€836m

SERIES D

€5bn

1000-5000

Sifted Take

Revolut almost needs no introduction, as one of the fastest-growing online banking platforms in Europe.

Having begun as a travel currency-exchange card, the company has since expanded aggressively into a full range of services, including cryptocurrency and stockbroking services. Led by Nikolay Storonsky, the company reports having 11m customers, and is adding around 11,000 accounts a day.

According to an analysis by Sifted last year, Revolut leads its peers Monzo, N26 and Starling in terms of downloads, deposits and revenues — even when adjusted for time.

Its 2020 fundraise also valued the company at $5.5bn, and Revolut now has ambitions of gaining a UK bank licence and conquering the US and Asia.

However, amid fast growth, Revolut has also been stung by complaints of a toxic corporate culture, while The Telegraph claimed the company turned off a system designed to prevent money laundering for three months in 2018 (Revolut denies both).

Read more: Digital banks Monzo, Revolut, Starling and N26 compared

Revolut staff vent frustration over share options

Europe is beating the US in fintech innovation, says Revolut’s Nikolay Storonsky

OakNorth's logo

OakNorth

The bank for entrepreneurs - fast, flexible and accessible debt finance

fintech / banking / mortgages & lending

sifted.eu/articles/oaknorth-downround

London, UK

2015

€783m

SECONDARY

€2.2bn

10-50

Sifted Take

OakNorth is largely comprised of a bog standard bank, which has had a meteoric rise granting loans to small businesses.

OakNorth Bank has a large loan book, with around £3bn in outstanding loans at the last count, and just two defaults. The bank made £66m in profit last year, making it one of the most profitable financial newcomers in Europe.

Still, OakNorth’s $2.8bn valuation largely rests in its “credit science” arm. The company white labels its credit-analysis technology (dubbed Acorn) to non-UK banks, with a handful of clients now signed up.

SoftBank’s Vision Fund led a high-profile funding round into the fintech in 2019.

Read more: Seven OakNorth power-players pulling the strings behind the scenes

Oxford Nanopore Technologies's logo

Oxford Nanopore Technologies

Developing a new generation of nanopore-based electronic systems for analysis of single molecules

Oxford, UK

2005

€957m

GROWTH EQUITY

€2bn

100-500

Sifted Take

Oxford University spin-out Oxford Nanopore develops and sells devices which analyse DNA, RNA, proteins and small molecules. That's useful not just in medicine, but also agriculture and science more broadly.

In May 2020, it won a $56m contract to help the UK government roll out a novel coronavirus test.

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N26 Group's logo

N26 Group

Bank account that can be managed entirely from a smartphone

Berlin, Germany

2013

€744m

SERIES D

€3.2bn

1000-5000

Sifted Take

N26 was the first mobile banking platform of its kind, launching in Germany in 2013.

Led by founder Valentin Stalf, the company now has over 3.5m subscribers in Europe and has now joined rivals such as Revolut in making a play for the US market.

N26 has raised close to $800m to date and is backed by the likes of Peter Thiel and serial fintech investor Ian Osborne.

It’s been less than plain sailing for N26 though. The company was forced to pull out of the UK after a year, citing Brexit as a key factor. It has also faced a string of high-profile departures as well as staff unrest.

Nonetheless, N26’s investors are bullish that Covid-19 has increased demand for digital banking, putting the startup in a good position to lead the new era of consumer finance.

Read more: N26 facing staff unrest in Berlin, as employees say confidence in management at “all time low”

N26 hits a $3.5bn valuation — but can it break into the US?

Improbable's logo

Improbable

A cloud-based platform for game developers to create AI-powered simulated worlds

London, UK

2012

€547m

GROWTH EQUITY

€1.8bn

500-1000

Sifted Take

Simulation software startup Improbable has always had an aura of mystery about it — partly because it operated in stealth for a long time, gained a billion-dollar valuation not long after launching and has landed numerous deals with the military.

Founder Herman Narula has sold investors including SoftBank and Andreessen Horowitz on his vision to "build the Matrix". The big question is whether he can actually pull it off.

Cazoo's logo

Cazoo

Online used car retailer

marketplace & ecommerce / transportation

sifted.eu/articles/cazoo-us-listing/

London, UK

2018

€1,300m

SERIES D

€2.3bn

100-500

Sifted Take

Online used car retailer Cazoo is proof of the power of the serial entrepreneur.

Founder Alex Chesterman, whose previous businesses include property platform Zoopla and media company LoveFilm, has raised several huge rounds of funding in just a few short years.

Many of Cazoo's investors have worked with him before — and they clearly want more. His goal is an ambitious one: he wants to shake up the £50bn second-hand-car market in the UK.

Read more: Cazoo becomes fastest-ever British unicorn Cazoo goes full speed ahead

FlixBus's logo

FlixBus

Benefit from comfortable, low-cost European bus travel

transportation / mobility

global.flixbus.com

Munich, Germany

2011

€805m

LATE VC

€1.8bn

1000-5000

Sifted Take

FlixBus's bright green buses are now running services in over 30 countries — including the US.

In 2019, the company carried 62m passengers but 2020 has, for obvious reasons, been more difficult, with FlixBus having to pause some services in response to national lockdowns.

Read more: German transport unicorn FlixMobility wants to move the world

Atom Bank's logo

Atom Bank

A digital financial company and challenger bank, providing banking services through a smartphone app

fintech / banking

atombank.co.uk

Durham, UK

2014

€546m

GRANT

€550m

100-500

Sifted Take

Atom Bank is another UK challenger lender making a play for the millennial market with mobile-first savings accounts.

Like its larger peers Starling, Monzo and N26 it is facing a difficult environment, particularly as competition heats up in the mortgage business.

Led by Mark Mullen and 40% owned by Spanish bank BBVA, it is rumoured to be aiming for an IPO in 2022.

Just as Nordic fintech Klarna is backed by Calvin Broadus (better known as Snoop Dogg, or Smoooth Dogg), the American rapper, Atom bank is backed by US musician will.i.am, the lead singer in the Black Eyed Peas.

Will.i.am is a strategic advisor and, apparently, provides “an external perspective on culture, philanthropy and technology”.

Related: Starling, Revolut and Monzo’s annual results compared

Glovo's logo

Glovo

Barcelona-based startup with food at the core of the business, delivers any product within cities at any time of day

food logistics & delivery /

glovoapp.com

Barcelona, Spain

2015

€902m

SERIES E

€1bn

1000-5000

Sifted Take

On-demand delivery platform Glovo will deliver just about anything — food, pills, flowers — to its customers' doors. The big question now is whether it can also deliver profit and growth to its investors.

To achieve that, Glovo is pushing hard into the fast-growing segment of grocery delivery and continues to pull out of markets where competition is too tough. (In September 2020, it sold its Latin American operations to competitor Delivery Hero “to focus on key markets where we can build a long-term sustainable business".)

It will need to battle not just the competition, but also the courts: like many food delivery companies, Glovo relies on freelance 'gig economy' workers to fulfil its speedy deliveries — but regulators are pushing for them to be treated like employees. That would throw a real spanner in the works.

Read more: [“What the hell have I invented?” – Glovo’s Sacha Michaud on gig economy controversy](https://sifted.eu/articles/glovo-gig-economy/)

On-demand delivery startup Glovo raises €150m and becomes Spain’s second unicorn

Glovo goes big on grocery

Glovo: The everything app

Starling Bank's logo

Starling Bank

Mobile-app based bank

fintech / banking

starlingbank.com

London, UK

2014

€876m

LATE VC

£540m

500-1000

Sifted Take

Starling is the youngest of the consumer-focused digital challenger banks. Although founded in 2014, it launched in 2017, after Revolut in 2015 and Monzo in 2016. It’s also smaller than both in terms of the number of users.

But in a fiercely competitive sector (Monzo’s Tom Blomfield worked at Starling before staging a walkout of top executives and forming the rival bank) Starling is on track to be the first to actually make a profit.

This is due to success outside just retail banking in the ream of business accounts and offering banking-as-a-service products to other financial institutions. There are also rumours of a planned IPO in 2022.

The company is 20% owned by staff with the rest owned by two main backers — Austrian-born investor Harry McPike and Merian Global Investors.

Related: Starling, Revolut and Monzo’s annual results compared

Inside Anne Boden’s Starling

Graphcore's logo

Graphcore

Created a new processor, the IPU, specifically designed for AI

robotics / semiconductors

graphcore.ai

Bristol, UK

2016

€620m

SERIES D

€1.8bn

100-500

Sifted Take

Smart chip company Graphcore started making the kind of intelligence processing units that AI companies would need before being an AI company was really a thing. Now, of course, every other startup likes to see themselves that way.

That makes Bristol-based Graphcore hot property. It has now shipped tens of thousands of its microchips, landed deals with Microsoft and Dell and attracted top investors like Atomico and Sequoia.

Read more: Graphcore takes aim at Nvidia with new AI chip

Snyk's logo

Snyk

Empowers software-driven businesses to develop fast and stay secure

security / enterprise software

snyk.io

London, United Kingdom

2015

€684m

SERIES D

€2.4bn

100-500

Sifted Take

It would be hard to jumble more jargon into one company's Google ad word listing than Snyk's: 'Dev First Security - Securing Cloud Native Apps'.

In plain speak, London-based Snyk helps developers find vulnerabilities in their code and keep businesses secure.

ApisProtect's logo

ApisProtect

Develops an agricultural technology designed for the management and care of bees

agritech / food

www.apisprotect.com

Cork, Ireland

2017

€3m

SEED

€7-11m

1-10

Sifted Take

ApisProtect may not be the biggest Irish startups, but it’s in an exciting field (much beloved by Sifted) of bee-tech. Founded in 2017, ApisProtect develops internet-connected beehive sensors and has raised more money than any bee-tech business in the world.

It’s hive sensors monitor temperature, humidity, carbon dioxide, sound and movement; data which can be analysed by machine learning to provide alerts for issues like disease, pests or unusual behaviour.

“Our machine learning turns data into useful information,” Fiona Murphy told Sifted last year. “We can show beekeepers which colonies are alive or dead, which are performing well or not, so they can decide if they need to feed them, apply insecticide or slap some extra insulation on the hives.”

ApisProtect has been training its AI with 20 beekeeper partners, 200 sensor units and 10m honey bees monitored across the US, Ireland, the UK and South Africa. “We don’t want to train an algorithm on Irish beehives and expect that to land in California and work,” says Murphy.

The startup has some rivals in the form of BeeHero (Israel), Pollenity (Bulgaria) and Arnia (Italy) and so this is a hot field which ApisProtect hopes to dominate.

Omio's logo

Omio

Multi-node search tool that compares and combines rail, air, bus and car for European destinations

travel / booking & search

omio.com

Berlin, Germany

2012

€360m

CONVERTIBLE

€909m

100-500

Sifted Take

At the start of 2020, travel app Omio was ready to take on the US, as well as helping people across Europe book train, bus and plane journeys.

Then Covid came along, and US expansion got somewhat put on hold.

Read more: Omio raises $100m in Europe’s biggest travel round of 2020

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