Together with our partner Dealroom, we set out to find out what proportion of Seed-funded startups make it to a $1B+ valuation in Europe. This was inspired by an excellent analysis for the US market shared by CB Insights.
Our first step was to create a clean dataset; this involved creating filters that may exclude certain companies. These filters were used to exclude: crowdfunding rounds, rounds with no investor, and rounds involving companies without a founding date. This left a clean, standardised cohort of 1,064 companies that raised a qualifying Seed round between 2010 and 2013. The lifecycle of these companies has been tracked until November 2020.
The dataset quantifies their fundraising journey, path to exit and, ultimately, shows whether the companies reached a $1B+ valuation. We can see what rounds the companies raised, how much they raised and how long it took them along each step of the journey. For those companies that exited, we can explore when those exits happened and, when disclosed, at what valuation. The data also distinguishes companies that fail to raise further rounds of funding or make it to an exit. These companies are either out of business or have become self-sustaining companies. A key limitation of this analysis is the inability to specifically separate those that are out of business with those that are self-sustaining.
Dealroom's analysis for Europe is presented alongside the US data from CB Insights for illustrative benchmarking purposes. It should be noted that there may be minor differences in the underlying methodology, although we do not believe these would materially distort the findings.