25 high-potential European startups

In these days when digital technology is taking over the world, Europe can no longer depend on turnkey services provided by the United States. And its companies are ready to step up to the challenge. Here is our selection.

By Bertrand Beauté

  • Foundation: 2006
  • Headquarter: Amsterdam (NL)
  • Revenues: €684.2 million (2020)
  • Effectives: 1700
  • Stock Exchange:

Adyen’s capitalisation is more than twice that of Crédit Suisse: €57 billion. Quite impressive for a company founded in 2006. The payment systems expert is enjoying the benefits society’s digital transformation, which means more payment methods: bank cards, of course, but also digital wallets (Apple Pay, WeChat Pay) or Pay by Link, a tool for sending a secure payment link by email, chat or SMS. To manage all these systems, merchants turn to so-called "omnichannel" payment specialists such as Adyen.

This Dutch star boasts a portfolio of prestigious clients including Uber, Spotify and Driven by the pandemic, Adyen’s revenue grew 28% in 2020, to €684.2 million. Most analysts recommend holding shares. Although Adyen has a head start, the competition is tough with giants the likes of the French company Worldline, and US firms FIV and Stripe. The risk is that large customers switch to the enemy. In 2018, for example, eBay left PayPal for Adyen.

  • Foundation: 1999
  • Headquarter: Poznań (PL)
  • Revenues: €898 million (2020)
  • Effectives: 3150
  • Stock Exchange:

It was the event of the year, if not the decade, for Polish investors. On 12 October 2020, online retail specialist Allegro debuted on the Warsaw Stock Exchange, immediately seizing the top spot on the WIG20, the index of the nation’s 20 largest capitalisations. Founded in 1999 in a cellar in the western Polish city of Poznań, Allegro now controls nearly 50% of online commerce in a country of 40 million people. Although the firm’s revenue is paltry compared to that of US or Chinese giants (PLN 3.997 trillion in 2020, or €900 million), it is impressive for a company active in only one country. But beware! After years of vacillating, Amazon finally hit Poland in March 2021. The new competition may affect Allegro’s unbridled growth (54.2% in 2020).

  • Foundation: 1984
  • Headquarter: Veldhoven (NL)
  • Revenues: €14 billion (2020)
  • Effectives: 28073
  • Stock Exchange:

Car manufacturers Audi, Renault and Stellantis all announced temporary factory shutdowns in 2021 due to the semiconductor shortage. This crisis highlights European industry’s dependence on Taiwanese foundries (TSMC and UMC). But behind these giants is another giant, and it is European: ASML. The little known Dutch company is the biggest success story in European tech. In comparison, ASML has a higher valuation on the stock exchange than Volkswagen, Siemens or Novartis. The company is the world’s only manufacturer of EUV (Extreme Ultra-Violet) machines, which are used by the best foundries worldwide (TSMC, Intel, Samsung, etc.). In fact, ASML is taking full advantage of the higher global demand for semiconductors. Its revenue hit €14 billion in 2020, up by almost 20% compared to 2019. Most analysts recommend buying shares.

  • Foundation: 2012
  • Headquarter: Munich (DE)
  • Revenues: €2.830 billion (2019)
  • Effectives: 4165
  • Stock Exchange:

Founded in 2012, Berlin-based startup Auto1 Group bills itself as Europe’s largest online used car sales platform. And for good reason: since its founding, Auto1 has experienced spectacular growth. Its revenue rose from €128.5 million in 2014 to €3.476 trillion in 2019. The platform, which buys vehicles from individuals and then resells them to professionals throughout Europe, uses artificial intelligence to dig up the best deals available. However, the firm’s tremendous growth has slowed with the pandemic, leading to an 18% drop in revenue last year, to €2.8 billion. But that’s not enough to turn investors away. In February 2021, it made a spectacular debut on the Frankfurt Stock Exchange. Most analysts recommend buying shares.

  • Foundation: 1988
  • Headquarter: Prague (CZ)
  • Revenues: $922 million (2020)
  • Effectives: 1700
  • Stock Exchange:

Some time ago, private ownership was banned in the Czech Republic. In 1988, Alwil was founded as a cooperative, which was later renamed Avast. After the fall of the Berlin Wall, the cooperative formed a company in 1991 and moved into antivirus software. The company was quite successful in its local market when the second turning point in its history took shape: in 2001, the American antivirus giant Symantec attacked the Czech market. To survive, Avast completely changed its strategy and adopted a freemium model: its antivirus software became free for individuals, and the company made money off a more complete premium version. Thanks to this visionary choice, the company nibbles away at market share worldwide. Today, Avast claims more than 435 million users, or 12.69% of the global market for Windows-based antivirus software, just behind the number one Symantec (13.16%), according to Statista. Most analysts recommend buying shares.

  • Foundation: 2001
  • Headquarter: Warrington (UK)
  • Revenues: £ 141.4 million (2020)
  • Effectives: 1000
  • Stock Exchange:

Will humans soon be relieved of the most repetitive computing tasks? That is what UK deep tech company Blue Prism has set out to do. Founded in 2001, it has developed a technology called Robotic Process Automation (RPA), a term that has since been embraced by the entire sector. RPA software identifies the most repetitive human tasks and then reproduces them by itself – for example in finance, insurance and services. Big names such as Pfizer, Coca-Cola or Sony use Blue Prism software.

Still in its infancy, the RPA market is expected to reach $13.74 billion by 2028, according to a report by the California firm Grand View Research published last April, representing growth of 32.8% per year over the period. Most analysts recommend buying shares in Blue Prism, an industry pioneer. But to impose itself the young startup will have to face other startups: the Californian Automation Anywhere, the French Contextor (bought by the German giant SAP in 2018) and especially UiPath. Founded in Romania, UiPath would have placed high in this ranking if it had not moved to the United States.

  • Foundation: 1994
  • Headquarter: Warsaw (PL)
  • Revenues: €478 million (2020)
  • Effectives: 1111
  • Stock Exchange:

It was a genius move. In the mid-2000s, the small publisher CD Projekt bought the rights to adapt the The Witcher novel series by Polish writer Andrzej Sapkowski, very popular in his country, into video games. And then? Its success went far beyond Poland’s borders. Released in 2015, The Witcher 3 sold more than 30 million copies, making CD Projekt a worthy contender against the world’s big four video game companies (Ubisoft, Activision, Electronic Arts and Take‑Two Interactive). Instead of further developing its game suite, CD Projekt set aside its star game – and only franchise – to focus on a new project, Cyberpunk 2077. It was the most hotly awaited video game release in 2020. Many of them would be disappointed due to the many bugs on the console versions. In December, Sony even removed the blockbuster from its PlayStation Store platform. And that is a rare decision in the industry. Since then, CD Projekt’s share price has lost more than 60% of its value (between December 2020 and June 2021) and analysts cannot agree on what to do next.

  • Foundation: 2013
  • Headquarter: Cambridge (UK)
  • Revenues: $199.1 million (2020)
  • Effectives: 1500
  • Stock Exchange:

Darktrace is a pioneer in applying artificial intelligence to cybersecurity. This particularly innovative system is designed to stop unknown computer attacks autonomously, unlike antivirus software and other traditional firewalls that are built based on past events. Its potential convinced Microsoft. In May, the  tech giant signed a partnership with Darktrace to secure its cloud services, including Microsoft 365 and Azure. The firm went public on 30 April, 2021. Its shares are trading at around £350, 40% higher than its IPO price of £250.

  • Foundation: 2013
  • Headquarter: London (UK)
  • Revenues: £4.1 billion (2020)
  • Effectives: 2300
  • Stock Exchange:

Deliveroo’s IPO was supposed to be one of the success stories of the year. Unfortunately, the go-to home delivery service had a troubled start on the London Stock Exchange in March, tumbling more than 25% on its first day of trading. How did that happen? New labour rules threaten its business model. Some countries, such as Spain, have adopted laws requiring delivery workers to be company employees. This is a difficult burden for a company that reported a deficit of £9.6 million in 2020. Deliveroo plans to diversify through new revenue streams. The company has partnered with retail giant Carrefour to offer delivery of consumer goods in France, Belgium, Italy and Spain. Most analysts recommend holding shares.

  • Foundation: 2011
  • Headquarter: Berlin (DE)
  • Revenues: €2.471 billion (2020)
  • Effectives: 35528
  • Stock Exchange:

Delivery Hero has benefited significantly from the pandemic. The meal delivery specialist doubled its revenue in 2020 (up 95%) to €2.8 billion. Compared to its competitors (Uber Eats, Deliveroo, TakeAway), the company is unique in its firm positioning in emerging markets, with 2020 revenues of €257.4 million in South America, €386.3 million in the Middle East, and €667.7 million in Asia. The German delivery company prefers to leave mature markets where competition is too fierce. That is why Delivery Hero has moved out of Germany (its home country), Italy, the Netherlands, France and Australia. This strategy appeals to analysts, with most recommending buying shares. However, Delivery Hero has never been profitable since its creation in 2011, with a net loss in 2020 of €1.4 billion.

  • Foundation: 1876
  • Headquarter: Stockholm (SE)
  • Revenues: Stockholm (SE)
  • Effectives: 100000
  • Stock Exchange:

The setbacks experienced by Huawei, whose 5G infrastructure is banned in several countries, including the United States and the United Kingdom, are creating business for Ericsson. Several operators have left the Chinese company for the Swedish telecom equipment manufacturer, for example, Telefónica in Germany, British Telecom in the United Kingdom and Bell in Canada. As a result, Ericsson now holds 35% of the global 5G market (excluding China), far ahead of Nokia (25%) and Huawei (20%), according to Dell’Oro. Most analysts recommend buying shares.

  • Foundation: 1992
  • Headquarter: Stockholm (SE)
  • Revenues: €3.764 billion (2020)
  • Effectives: 20000
  • Stock Exchange:

"Data is in Hexagon’s DNA." Hexagon’s sleek website immediately sets the tone. The Swedish company is a data expert. But not just any data, industry data. The firm delivers a range of sensors and software to drive factory automation (Industry 4.0), but also the development of smart cities. On top of these core businesses, Hexagon has in recent years added machine learning and artificial intelligence. For example, the company works for manufacturers Daimler, Volkswagen and PSA (now Stellantis). Most analysts recommend holding shares.

  • Foundation: 2000
  • Headquarter: Amsterdam (NL)
  • Revenues: € 2.4 billion (2020)
  • Effectives: 9000
  • Stock Exchange:

Raging hunger? After merging with its UK competitor Just Eat in 2019, the meal delivery leader bought the US service Grubhub in 2020 for $7.3 billion. Today, the company claims to be the “world’s largest online food delivery company outside China”. With business fuelled by the pandemic, Just Eat Takeaway delivered 588 million orders in 2020, up 42% from 2019. Most analysts recommend buying shares.

  • Foundation: 2008
  • Headquarter: Montbonnot-Saint-Martin (FR)
  • Revenues: €1 million (2020)
  • Effectives: 100
  • Stock Exchange:

Kalray, a small company in the semiconductor world, dreams of becoming the future Nvidia (see Swissquote Magazine, July 2020). To make it there, the French tech leader is working towards the next revolution in the sector: embedded artificial intelligence. What does that mean? Artificial intelligence is currently hosted in data centres, but in the future it will be stored directly in objects, including autonomous cars. This new era known as “edge computing” requires purpose‑designed electronic chips. After coming out with several prototypes, Kalray is launching mass production of its edge computing processor this year. The goal is to sell 100,000 of them in the next two years, which should generate sales of €100 million by 2022. Along the way, Kalray will be competing with industry leader Nvidia, but also other star players including the UK company Graphcore.

  • Foundation: 1981
  • Headquarter: Lausanne (CH)
  • Revenues: $5.25 billion (2021)
  • Effectives: 6000
  • Stock Exchange:

Logitech is probably one of the firms to have benefited the most from the health crisis. Turning 40 this year, the Swiss computer peripheral manufacturer saw its revenue soar 74% for its financial year ended 31 March 2021. This performance is a result of the pandemic, as consumers worked and played more at home and bought hardware accordingly. "Fiscal Year 2021 was our best year ever," Bracken Darrell, the company’s US CEO, proudly stated. And the trend is expected to continue. Analysts believe that the growth of remote working and the advent of e-sports, a field where Logitech enjoys strong positioning, should continue long after the crisis.

  • Foundation: 1963
  • Headquarter: Munich (DE)
  • Revenues: €596.9 million (2020)
  • Effectives: 3000
  • Stock Exchange:

The German publisher is developing a range of 3D visualisation, modelling and animation software, covering the entire life cycle of buildings. An approach called "Building Information Modelling", or BIM, is spreading fast in the building and public works sector. BIM is used by various professionals involved in a project to share information and therefore manage costs better. Nemetschek boasts 6 million customers worldwide. Most analysts recommend buying shares as the company is expected to benefit from the post-pandemic stimulus plans.

  • Foundation: 1865
  • Headquarter: Espoo (FI)
  • Revenues: €21.9 billion (2020)
  • Effectives: 92000
  • Stock Exchange:

The pandemic has not helped. Nokia is still struggling. The Finnish equipment manufacturer went through a difficult year in 2020, racking up losses of €2.4 billion, against a small profit of €7 million in 2019. Now, time for shock treatment. In March, Nokia announced that it would be shedding 5,000 to 10,000 jobs over the next two years. The world’s third-largest 5G network is lagging behind its rivals Huawei and Ericsson. Even so, analysts recommend buying shares, which they currently consider undervalued.

  • Foundation: 1972
  • Headquarter: Weinheim (DE)
  • Revenues: €27.34 billion (2020)
  • Effectives: 102400
  • Stock Exchange:

In the world’s top 10 cloud infrastructures, there is only one European player: the German software company SAP, which Synergy Research places at number 10, far behind the American giants Amazon Web Services, Microsoft Azure and Google Cloud. SAP is best known in cloud services for software as a service, or SaaS, a segment where it ranks fourth globally, behind the US developers Microsoft, Oracle and IBM. Most analysts recommend buying shares, which should benefit from the boom of the cloud: the European market of the sector should more than quintuple from €53 billion in 2020 to between €300 and €500 billion by 2027-2030, according to a report by KPMG published in May 2021.

  • Foundation: 1968
  • Headquarter: Munich (DE)
  • Revenues: €1.207 billion (2020)
  • Effectives: 3800
  • Stock Exchange:

Silicon wafers are the base material required to make any electronic chip. Only a handful of suppliers manufacture these wafers: the Japanese companies Shin-Etsu and Sumco, the Taiwanese group GlobalWafers, the Korean SK Siltron and the German Siltronic. Together, the five of them control 90% of the market, estimated at $11.2 billion, with 13% for Siltronic. Analysts recommend holding its shares.

  • Foundation: 2006
  • Headquarter: Stockholm (SE)
  • Revenues: €7.88 billion (2020)
  • Effectives: 6554
  • Stock Exchange:

In tech, companies founded after the year 2000 valued at more than $50 billion are referred to as "Titans". One of Europe’s problems is that it has too few Titans to compete with US and Chinese tech giants. Spotify stands out as an exception in this category. In June 2020, the Swedish platform became Europe’s first Titan, since joined by Adyen.

Although its valuation has since fallen back below the symbolic $50 billion mark, Spotify can boast of being the world’s number one music streaming service, ahead of giants Apple Music and Amazon Music. At the end of 2020, the Swedish company counted 345 million users (up 27% in one year), far ahead of Amazon Music and its 55 million subscribers (Apple stopped reporting its number of users in 2019). The bad news comes from its financial results: last year, Spotify made a loss of €581 million, versus €186 million a year earlier. Even so, most analysts recommend buying shares.

  • Foundation: 1987
  • Headquarter: Plan-les-Ouates (CH)
  • Revenues: $10.22 billion
  • Effectives: 46000
  • Stock Exchange:

Tesla, Apple, or SpaceX. STMicroelectronics, the Franco-Italian chip design champion based in Geneva, flaunts an impressive array of customers. And the company is taking full advantage of the current context, marked by increased demand against the backdrop of a global semiconductor shortage. In April 2021, STMicroelectronics announced its target of reaching $12 billion in revenue by 2021, an 18% jump compared to 2020, i.e. two years ahead of its previous plan. The forecast pleased analysts, who recommend buying shares.

  • Foundation: 2001
  • Headquarter: Paris (FR)
  • Revenues: €13.9 million (2020)
  • Effectives: 190
  • Stock Exchange:

Inspired by WhatsApp, in 2013 Streamwide launched a solution similar to the US instant messaging service, but designed for and emphasising data security. The French company provides two flagship apps: the ultra-secure "team on mission", used for example by the GIGN (an elite French military unit), and "team on the run", aimed at more traditional customers such as EDF. With the tailwinds of the pandemic, the company’s share price has risen by more than 200% in one and a half years (between January 2020 and June 2021).

  • Foundation: 2005
  • Headquarter: Göppingen (DE)
  • Revenues: €460 million (2020)
  • Effectives: 1256
  • Stock Exchange:

The German state of Baden-Württemberg, bordering Switzerland, is known for being home to some of the biggest names in German manufacturing, such as Mercedes-Benz, Porsche and Bosch. But the region is also home to a company that one might instead imagine in Silicon Valley. Founded in 2005, TeamViewer develops features to supervise remote work, including remote support, video conferencing and industrial site monitoring. The sector took off phenomenally during the pandemic. With more than 1,880 corporate customers, the German firm saw its revenue jump 42% in 2020. TeamViewer’s competitors include big names such as Zoom for video conferencing, Slack for project management and Chrome Remote Desktop (Google) for the remote desktop functionality.

  • Foundation: 2004
  • Headquarter: Manchester (UK)
  • Revenues: £1.61 billion (2020)
  • Effectives: 7000
  • Stock Exchange:

With 10.7 million new customers in 2020, The Hut Group (THG) has been able to expand as a result of the pandemic. Specialising in online cosmetics, the UK company has become a major player in the beauty sector in just a few years. The group offers nearly 1,000 brands on its platform, including L’Occitane, Nuxe, L’Oréal and MAC, as well as its own products. To extend its range, THG buys promising small brands, including Eyeko in 2018 and Illamasqua in 2017.

  • Foundation: 2008
  • Headquarter: Berlin (DE)
  • Revenues: €7.982 billion (2020)
  • Effectives: 14194
  • Stock Exchange:

Zalando is going shopping in Switzerland. Last October, the German online fashion giant announced the acquisition of the Zurich-based startup Fision, which specialises in virtual fitting rooms. This will expand the features available on the platform, which experienced a banner year in 2020 with revenue up 23% to €8 billion. Fuelled by the pandemic, Zalando is still thinking big. The company hopes to triple its business volume to €30 billion by 2025, aiming to capture 10% of the European online fashion market, versus its current share of 2.4%. To do that, the German company will enter six new markets this year (Croatia, Estonia, Latvia, Lithuania, Slovakia, Slovenia), and two more in 2022 (Hungary and Romania). And to offset the growth of the Lithuanian unicorn Vinted (not listed on the stock exchange), Zalando launched a second‑hand platform in late 2020. Most analysts recommend buying shares.