The latest SEP Monitor with preliminary data of the ICT scaleup UK ecosystem was released today. UK confirms its status as the “mecca and cradle” of European startups.

London, November 21, 2014 –  Today at the LSE, SEP organized its fourth SEP Matching Event. 20 one-to-one meetings were held between a selection of the best European scaleups and the SEP corporate members. Additionally, a new SEP Monitor with preliminary data on the UK ICT scaleup ecosystem was released.

Here are the main highlights:

Capital raised and IPOs
The SEP Monitor identified 359 UK’s ICT scaleups that received post-seed funding (>$1M in capital raised) in the past three years through venture capital funds. Approximately $5B was invested through venture capital funds, while $4B was collected on the stock market (IPO).

• 247 (69%) of the identified companies raised between $1M and $9M.
• 112 scaleups raised more than $10M in the past three years.
  • 55 companies (15%) received funding between $10M and $19M.
  • 32 scaleups (9%) were backed by funding between $20M and $49M, and 16 (4.5%) between $50M and $99M in the past three years.
  • 9 companies (2.5%) broke the $100M barrier in capital raised, and are now “scalers.”
• More than 10 companies raised money through an IPO in the same period: 7 companies raised more than $100M, while one company (Markit) broke the $1B barrier.

Notable scalers and scaleups

• The most notable companies that went public in the last three-year period are Markit, AO World, Zoopla, boohoo, King, Game Digital, Just Eat, Rightster, Ubisense.
• Powa Technologies, Truphone, Kobalt and Borro are the most notable UK ICT venture-backed startups that entered the “scaler” category via venture capital funding in the last three years.
• Among the most promising of UK’s ICT venture-backed Scaleups the SEP Monitor identified are Shazam Entertaiment, Mimecast, Hailo and DataSift.

Areas and markets

Software Solutions and E-commerce are the most relevant areas for UK ICT Scaleups, accounting respectively for 16% and 14% of all mapped scaleups. The Enterprise Services sector accounts for about 11% of the companies, closely followed by the Mobile, Advertising and Gaming social sector that appeal equally to 8% of the identified scaleups. The “fin-tech” segment attracted 5% of the identified companies.

Acquisitions

The Monitor identified over 50 notable acquisitions in the ICT sector from 2011-2014.

• Almost 60% of UK acquisitions have been accomplished by US buyers. 33% of the deals were completed by European companies of which nearly 70% (13) were from the UK.
• The largest acquisitions with disclosed deal size in the last three-year period were Autonomy (2011), NaturalMotion (2014) and DeepMind (2014).
• Terms remain undisclosed for about 40% of the deals.

“The UK confirms its status as the mecca and cradle of European startups,” said Alberto Onetti, Coordinator of SEP. As reported in the November Preliminary Study conducted by Startup Europe Partnership, over 25% of the EU startups are based in the UK, mainly in London, which makes it one of the most important hubs for startups in the world, surpassed only by New York and San Francisco. The main reasons why entrepreneurs go there are its realms of technology, the financial support and the promotion that the government provides to the venture.

About Startup Europe Partnership (SEP)
Established by the European Commission in January 2014, SEP is dedicated to transforming European startups into scaleups able to break the early-stage barriers to growth and development by linking them with global corporations in a pan-European entrepreneurial ecosystem. SEP’s goal is to accelerate early-stage companies to become global players and real job creators. By participating in the SEP program, global companies can help this process via business partnerships and strategic and venture corporate investments, providing them with access to the best technologies and talents through procurement of services, products, corporate acquisition or “acqui-hiring”. Under the umbrella of the EU Startup Europe initiative, SEP is the first open platform dedicated to support the growth and sustainability of European startups able to compete and raise funds interna­tionally. It is one of the six actions for web entrepreneurs defined in the Commission Communication, “Entrepreneurship 2020 Action Plan” (European Commission, January 2012), and conceived to realize recommendations included in the Startup Manifesto. Promoted by the European Commission, SEP is led by Mind the Bridge Foundation, a non-profit foundation based in Italy and United States, with the support of Nesta (the UK’s innovation foundation), and The Factory campus for startups and mature tech companies in Berlin. Partners include Telefónica, Orange, BBVA (Founding), and Telecom Italia, Unipol Group and Microsoft (SEP Corporate Member), with the institutional support of the European Investment Fund/European Investment Bank Group, Cambridge University, IE Business School and Alexander von Humboldt Institute for Internet and Society. SEP is a Startup Europe initiative. For more info: http://startupeuropepartnership.eu | @sep_eu  

About SEP Monitor SEP Monitor is published by SEP in collaboration with PEDAL Consulting and Ud’Anet. SEP Monitor is based on the SEP mapping and scouting database that focuses on scaleups. SEP categorizes high-tech companies as indicated below:

Startup: <$0.5M/1M funding raised in the last three-year period or bootstrapped companies with revenue in this range.
Scaleup: $0.5M/1M – $100M funding raised in the last three-year period or bootstrapped companies with revenue in this range.
Scaler: >$100M funding raised in the last three-year period or bootstrapped companies with revenue in this range. For companies that exited via M&A, the valuation is the amount that the company got acquired for. For a company that went public, the exit valuation is that on the day of the IPO.

Sources of information include the SEP database, portfolios of VC companies, corporate venture units, business angels, accel­erators and active seed and early stage funds, crowdfunding platforms, tech competitions, and other relevant channels. Research is ongoing and results reported in the SEP Monitor are not final. SEP welcomes everyone in the European startup ecosystem to contribute to the research by providing data, and indicating cases of scaleup companies and exits to be monitored (Contact: info@startupeuropepartnership.eu).