Start-ups call for ‘game-changer’ policies to boost unicorns in Europe

10 May 2021

Image: © brichuas/

Dublin’s Fenergo recently joined the unicorn club but the number of billion-dollar start-ups in Europe still trails behind the US.

As more European start-ups reach billion-dollar valuations, start-up groups are urging the EU to introduce policy reforms that will ramp up the number of so-called unicorns.

A group of start-up organisations from around Europe will present plans to the European Commission today (10 May) that they believe will improve the business environment for start-ups and encourage more founders to build their businesses at home, rather than looking to the US.

The groups will urge EU innovation commissioner Mariya Gabriel to enact Europe-wide policies that can stimulate start-up growth.

Among these policy proposals are adjustments to tax incentives, revamping rules around share options, introducing a start-up-specific visa and implementing more supports to encourage female-founded start-ups.

Scale Ireland, the non-profit organisation that lobbies on behalf of Irish start-ups, is one of the groups taking part.

“This is an ambitious and important initiative as it has been drawn up by national start-up organisations across the European Union, and it provides the European Commission with a very clear and comprehensive list of measures to help Europe become a global leader for start-ups,” Martina Fitzgerald, chief executive of Scale Ireland, said.

“If most of these recommendations were enacted, it would be a game changer for the sector in Europe. It also recognises the need for the European Commission and political leaders to adopt an EU-wide approach to the sector, which has huge potential in terms of innovation, employment and exports.”

Billion-dollar club

According to figures cited by Scale Ireland, there are more than 80,000 start-ups in Europe, with 51 of these being billion-dollar unicorns.

Europe has not produced as many homegrown billion-dollar start-ups as the US, but the number is growing.

European start-ups raised more than $41bn in 2020, up from $36.6bn the year before, despite the challenges posed by the pandemic. This has been driving up valuations of late.

In the first months of 2021, 27 European companies passed the billion-dollar threshold, such as Ireland’s Fenergo and just last week France’s Shift Technologies hit the mark after its $220m Series D round. But, as reported by this EU start-up initiative, very few companies remain based in Europe, which “paints a much bleaker picture”.

Europe’s tech industry will be looking at success stories like Stripe, the payments giant founded by Irish brothers Patrick and John Collison that was started and scaled in the US, and hoping to create an environment where the next Stripe can be built in Europe.

According to Irish Times sources, Fenergo’s recent $600m funding deal brought the fintech company to the unicorn’s table, joining a small club of privately held Irish companies that are valued at more than $1bn.

Intercom reached this status in 2018 while Workhuman was valued at $1.2bn last year.

Later today, the groups leading this initiative will meet with commissioner Gabriel at a summit.

“I am convinced that if the ecosystem leaders and the political leaders work together we can build a true pan-EU innovation ecosystem that will help the new generation of innovators and entrepreneurs to scale up and become tech champions to help Europe in a greener and digital Covid recovery,” Gabriel said.

Greener and digital has been the main theme of the European Commission’s plan for recovery from Covid-19, with many stipulations in its recovery fund around low-carbon investments and pumping money into the digital economy.

Gabriel has been meeting with leaders from some of Europe’s top start-ups and unicorns – including Dublin-based Immedis – to work on a new EU policy for innovation.

Jonathan Keane is a freelance business and technology journalist based in Dublin