Seedcamp data shows the startup trends in Europe

Next Story

Video: Motorola's new UI for Android, Moto BLUR

Seedcamp – the rolling European startups programme which started out as an annual competition and which has morphed into a pan-European network of mentors, investors and startups – will today announce it’s list of startups that have made the cut for Seedcamp Week in a fortnight’s time in London. But at a press conference in London CEO Reshma Sohoni and Chairman Saul Klein also gave out some fascinating data which (and I checked) we can share with you now, prior to the list announcement shortly. [Update: Here’s the list].

The data points are interesting because they show the trends in how tech companies are being formed from the primordial soup of Europe’s startup scene and which trends are emerging.

So, over the last three years Seedcamp has reviewed 1,500 applications, seen teams from 53 countries, has about 500 mentors in its network, held mini Seedcamp events in 10 countries, mentored 280 companies and invested in 14 startups, 11 of which had have follow on funding in the form of more Angel or Series A funding.

In terms of the trends amongst startups, social networks has gone down decidedly since 2007. Marketplaces (where the site acts as a broker between parties) have seen a 25% rise. Productivity/Business startups have gone up a whopping 97% (that would be down to the recession and there being a need for companies to increase productivity). Startups creating games platforms has also skyrocketed from a very small base, aiming at browser based games or social games.

In terms of business models they’ve seen a massive drop in advertising-lead business models, going from 30% of Seedcamp teams in 2007 down to 10% of them.

Freemium business models have more than doubled growth. And “blended models” (a mix of advertising or subscription, or freemium) have seen a 20% increase.

In terms of regions the fastest, biggest growing markets for startups have been in Scandinavia, Israel, the Balkans countries, and broadly across Central and Eastern Europe (or “New Europe, as we prefer to call it). We’re still not seeing a critical mass of startups coming out of Southern Europe (Italy, Spain, Greece etc).

As I said Seedcamp has come a long way. Their original idea was to run the project for three years and just run three week-long events. Instead their activity appears to have helped light the touch paper for many entrepreneurs in Europe. And it’s quite clear that they have adapted from quite a simple idea into an orgnisatioon that may end up having significant impact on the tech scene in Europe. Key to their growth has been tapping into local mentors and local people in each country. I think if they’d tried too much of a top-down approach, or perhaps something lead by local governments it would simply not have worked. Yes, they do have their critics in the venture capital world – not absolutely everyone is a fan of Seedcamp, though whether that’s because they are jealous of its ability to spot early, promising startups or not is a question there. But clearly the competition is healthy. And Seedcamp has not followed the exact Ycombinators or Techstars model – taking on all potential early stage tech companies, not just ones created by 20-something hackers (Ycombinator’s particular penchant).

The first year of Seedcamp saw mainly London companies, but after that they started to invest through mini Seedcamp in other European locations such as Paris or Berlin. The new aim will be to go for investing in 30-50 companies for 5-10% equity, bringing their large network of product marketing, engineering, recruiting, legal etc to bare on each companies.

There were seven events this year, four last year and they’ve also taken the event to the US. The feedback from Europe is that often young companies don’t know how to construct themselves, but that level of maturity is going up and applications are getting a lot better. Alex Hoye, a Seedcamp backer and former founder of GoIndustry, says the distribution curve of normal applications has improved greatly – “Every year gets better, and the depth gets better.”

The selection process for Seedcamp will also move selection to June/July next year, leaving teams to work on their ideas over the summer. Right now there is a mad-dash to the Seedcamp week in September, as is happening right now since teams are only now being told they got in. Successful teams all move to London for a few months, and it’s clear London is becoming THE tech hub in Europe with its combination of finance, links to the US and large melting pot.

Saul Klein says there is still a lot of work to be done bringing the Silicon Valley mindset (aggressiveness, agility, speed etc) to Europe, but “the best European startups have that in spades” but it’s still not at high enough levels. “You see it most in Israel, but it’s not at a critical mass in the rest of Europe yet.”

He also pointed out that Seedcamp is totally unlike the reality business shows on TV. “We’re not Dragons Den or The Apprentice. It’s not dissing people or firing them – it’s grass roots, on the ground, connecting people with the best advice and access to capital.”

It looks like it’s going to be an interesting week, all the same.

blog comments powered by Disqus