The European and Israeli tech ecosystem continues to grow thanks to the flywheel of talent springing from existing unicorns, according to our updated founder factory report released today in partnership with Dealroom.
The report reveals that, of the more than 350 VC-backed unicorns in the region, 248 have fueled 1,451 new tech-enabled startups across Europe and Israel as former employees become founders. In addition to repeat founders, there is now a network of people around them who have a wealth of product, engineering and management experience, and have been on the startup journey before. This knowledge and experience is vital to building global success stories out of the region.
This new wave of startups founded by former European and Israeli unicorn employees are already attracting significant private investment, with more than half (59%) of these new startups securing funding.
Commenting on the report’s findings, Harry Nelis, Partner at Accel, said:
"The European and Israeli tech ecosystem continues to be a powerhouse of innovation and ambition. Despite a difficult macroeconomic climate, we're seeing a surge in entrepreneurial talent across the board, particularly in countries like Germany and sectors such as fintech and AI. Our data shows a striking trend: nearly 1,500 startups sprouted from the roots of European and Israeli unicorn companies, once again demonstrating that they continue to be thriving founder factories. This region is not just launching startups; it's creating seasoned founders equipped with deep industry insights and, in the current environment, the experience to build enduring and resilient businesses that can achieve sustainable growth."
A wave of new founder factories is rising
While familiar tech stalwarts such as Spotify, Delivery Hero, Zalando and Criteo continue to top the list, with 151 tech-enabled startups springing from those four companies alone, a new wave of founder factories is on the rise. Fintech unicorns dominate the top 10 as Revolut, Klarna, N26 and Wise rank fifth, sixth, seventh and ninth respectively, and former employees have produced more than 120 new tech companies between them.
Founder factories lay strong foundations in thriving tech hubs
The network effect created as unicorn employees go on to found their own companies extends to the cities within which their unicorn employer was minted. More than half (55%) of companies founded by ex-employees were founded in the same city as the unicorn. This results in thriving tech hubs developing in cities where unicorns have been created.
To see the full list of unicorn founder factories, view funding trends and discover more on the next generation of fintech companies springing from fintech unicorns, you can see the full report here.