Want to create a startup? Join another first

Criteo SA (Pre-Reincorporation)

29/11/2022 09:00

By Supantha Mukherjee
       STOCKHOLM, Nov 29 (Reuters) - More than 1,000 technology
startups were created in Europe and Israel by former employees
of about 200 venture capital-backed unicorns in the region since
the financial crisis of 2008, a report by VC firm Accel showed
on Tuesday.
    After the boom in startups in the last two years, sentiment
has turned negative in the second half of this year with several
companies lowering valuations and cutting jobs in a bid to find
a path to profit. 
    But Accel argues that the community is in a much stronger
position than during the financial crisis with a strong set of
founders ready to create "the next wave of companies".
    Top startups such as BlaBlaCar, Criteo  CRTO.O , Delivery
Hero  DHER.DE , Klarna, N26, Revolut, Skype, Spotify  SPOT.N 
and Zalando  ZALG.DE  have become the breeding grounds for new
founders. Each of those companies has led to the creation of
more than 20 startups, helmed by former employees. 
    Former employees from each of the newer startups like
Babylon, Celonis, iZettle  IPO-IZET.ST  and SumUp have also
created more than 10 companies.    
    "Last year, the pace of investment was very high. That has
gone down dramatically," Harry Nelis, partner at Accel, said in
an interview.
    "There will be fewer deals, fewer transactions taking place
in a time of transition, but once the new level has been found,
I think things will pick up quite a bit," he said.
    While London saw the most number startups being created with
employees of 27 unicorns forming 168 startups, Swedish capital
Stockholm had one of the highest per capita numbers with 98
companies spawning from just 11 startups.
    "Unicorns tend to create more rounded founders than large
organizations like the tech behemoths because people have had
kind of a better training ground for entrepreneurial activity,"
Nelis said.
    Employees in a startup tends to get access to many different
functions from engineering to sales, giving them exposure to
various parts of the business, he said.
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[ Startups spawning startups ]    https://tmsnrt.rs/3UeBWbC
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 (Reporting by Supantha Mukherjee in Stockholm; editing by David
Evans)
 ((supantha.mukherjee@thomsonreuters.com; +46 70 721 1004;
Reuters Messaging:
supantha.mukherjee.thomsonreuters.com@reuters.net))