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Who are the founders building tech’s next unicorns?
In 2022, the number of employees leaving tech companies that made layoffs to become tech founders more than doubled.
Founding a tech unicorn is, true to the name, rare.
Out of the tens of thousands of startups, just a few hundred have made it in Europe into the unicorn stable.
In the past 18 months or so it has become rarer still with companies valued at more than $1bn (or £1bn or €1bn, depending on who and where you are), occurring with much less and less frequency as valuations have come under increasing pressure.
Infact, a number of those startups previously priced in the tens of billions have seen large valuation ‘haircuts’, by as much as 90 per cent in some cases, and matching depressed share prices for publicly listed tech firms, especially those newly listed in 2021.
This period has brought a dose of realism to what constitutes a successful startup with sustainable revenue generation becoming more important for investors over the speed of hiring and product launches.
Those companies that already have locked in a comfortable unicorn valuation are more likely to have been laying off staff than hiring in many cases to help protect their lofty valuations.
That being the case, a budding new and exciting trend is emerging, reshaping the European entrepreneurial landscape and perhaps even helping to eventually create the next generation of unicorns.
From laid-off to founder
An influx of new founder talent though is being driven by these tech layoffs and redundancies.
Whereas unicorn founders have typically emerged from consulting or corporate and banking backgrounds, Europe’s new tech founders are now coming from these original unicorns, according to an in-depth study conducted by Antler VC, an early-stage venture capital firm, this month.
Could this be a clear sign of the growing maturity of Europe’s tech ecosystem?
Antler’s report analyses an impressive number of entrepreneurs.
This includes 845 unicorn founders, 2,500 founders participating in Antler ‘residencies’ and more than 70,000 aspiring founders who have applied to Antler in Europe (38,000 of which are based in the UK), to understand their academic history, professional expertise and demographics, making it one of the largest studies of European tech founders ever conducted.
It reveals a direct correlation between layoffs and the emergence of aspiring tech founders.
Astonishingly, within the 12 months following a tech company's announcement of layoffs, Antler identified a staggering 391 per cent increase in applications from employees seeking to embark on their entrepreneurial journey.
In 2022, the number of employees leaving tech companies that made layoffs to become tech founders increased by 111 per cent.
Klarna and, Uber are among the tech companies generating the most new tech founders in Europe after announcing layoffs.
“‘This data brings to life what we experience every day working with founders from day zero of their journey. In the last 12 months alone, we’ve invested in female rocket scientists sending satellites into space, mothers building a family at the same time as a proptech business, engineers who’ve found a way to extract carbon dioxide from the atmosphere and fintech experts keeping small businesses afloat during the economic downturn,” said Christoph Klink, a partner at Antler.
“Their backgrounds are different, but what unites them is the conviction that technology can make the world a better place. When I consider the founders I spend time with every day, I don’t think there’s ever been a more exciting time in the European tech ecosystem,” he added.
Shifting demographic sands
The report found - not a little unsurprisingly - that Europe’s unicorn founders have traditionally been a pretty homogenous bunch.
The typical unicorn founder is a man (96 male) building a tech company in their home country. A third of Europe’s unicorn founders went to the same 20 universities. Infact, a unicorn founder is more likely to be an Oxbridge graduate (36) than a woman (32).
Highlighting another, and well documented disparity, just 6 per cent of British unicorn founders are women, whilst 43 per cent originate from abroad. The UK has the highest number of international unicorn founders in Europe.
Interestingly, the new generation of European tech founders, the research shows, is becoming more diverse than ever before though.
New tech founders are five times more likely to be women and represent three more nationalities than Europe’s existing unicorn founders.
In the UK specifically, aspiring tech founders looking to create tech startups in the UK over the last three years are 266 per cent more likely to be women than British unicorn founders.
As tech layoffs sweep across Europe, a seismic shift is reshaping the industry.
The rise of new tech founders from the brutal layoffs seen in recent years signals a profound transformation in the landscape with more diverse backgrounds, origins, and ambitions. This is likely to ignite a new wave of innovation and progress.
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