The outlook for European tech unicorns

The number of public offerings from European technology companies is expected to rise in the years to come as the region’s tally of private-startup unicorns valued at more than $1 billion climbs, says Clif Marriott in Goldman Sachs Global Banking & Markets.

The amount of capital invested in artificial intelligence, in particular, is growing, and investing in other technologies like cyber security is also increasing. “European tech has evolved immensely over the past decade,” Marriott, co-head of the Technology, Media, and Telecommunications Group in EMEA, said following the firm’s 10^th annual Disruptive Technology Symposium in London. Around 550 companies — and two-thirds of all European unicorns — have presented at the symposium since the event began in 2016.

More than $425 billion has been invested in European tech during the past 10 years, compared with about $45 billion in the prior decade, according to a report in 2024 from Atomico. The number of technology unicorns has ballooned to around 350, from less than 20, in that time period, the venture capital firm’s data shows. The count of early, growth stage, companies has risen by five times during that span.

“We think 2025 is going to be a breakout year” for the number of tech IPOs globally, Marriott says. The team anticipates that the number of tech IPOs will be significantly higher than the last few years: They expect the number of listings in public markets to be closer to the median number of yearly offerings (30) before the Covid pandemic and up substantially from the lull in 2022-2023. Marriott points out that technology-company merger and acquisition activity has increased about 25% in 2024 from the year before and momentum continues to build.

Even as the timeline for private companies to list has lengthened in some cases, a growing portion of Europe’s 350 unicorns will go public in the next five years. “While a number will go public on their own, some of those companies will need to merge or be acquired in order to access the public markets,” he adds.

How Europe’s technology ecosystem is evolving

Marriott points to the experience of Taavet Hinrikus, co-founder of fintech company Wise, as an example of how Europe’s tech ecosystem has changed over the past decade. Hinrikus was the first employee of Scandinavian internet-communications company Skype before starting Wise, a fintech company. The latter became Europe’s first direct listing when it went public in 2021. He then went on to become a founding Partner at Plural, an investment fund focused on European tech startups. Niklas Zennström, CEO of Atomico and Skype founder, recently said that more than 900 new companies have been created by first- and second-order Skype alumni.

Hinrikus’s experience is a template for other entrepreneurs in the region, Marriott says. “It’s why I feel really enthusiastic around Europe and the tech sector,” he says. “There are these repeat founders who are continuing to reinvest in the ecosystem.”

Is AI overhyped?

As AI advances, investors are trying to discern promising avenues for the technology. Billions of dollars are being invested in the infrastructure to build more powerful foundation models for generative intelligence that can be adapted to a wide range of tasks. Investors are also exploring opportunities among the makers of the chips that power those models as well as applications and products that could be created using the new technologies.

“There was a big debate about where AI is going and where the value will be created,” Marriott says of discussions during the symposium. He points out that around 14% of jobs in the US are in finance, insurance, and professional and technical services, which could benefit from AI tools that enhance productivity.

While there are signs of increasing scrutiny on the return on AI investment, much of the audience at the symposium was of the view that the technology is still underhyped. Some 62% of respondents to a poll during the event said AI is underhyped, compared with 58% of respondents at the same event in 2024.

“The more you peel back the onion around the capabilities, the use cases, and the efficiencies stemming from AI, the more benefit you see,” Marriott says.

Likewise, AI was the overwhelming answer when respondents were asked which technology they are most excited about. However there was also a surge in interest in cyber-security technology. The attention to cyber security comes as European governments indicate a growing need to fund defense, which includes electronic security.

“There's an opportunity for more entrepreneurship in defense technology,” Marriott says.

“That has implications for defense-tech spending,” he adds. “It also has implications for AI, AI sovereignty, and the global AI race. I wouldn't be surprised to see significantly more spending by companies and governments to increase the pace of innovation in all of those fields within Europe.”

 

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