Antler research reveals Europe’s unicorn boom is masking an early-stage funding crisis

A new report has unveiled an alarming early-stage funding crisis in Europe, as massive unicorn unicorns take the spotlight. The research, conducted by global VC Antler, examined 760 unicorn founders, 4,129 Series A founders, and 81,055 funding rounds in Europe since 2000. While Europe now boasts 33 post-2020 rocketship unicorns, these high-flying companies are masking a troubling trend in the early-stage funding pipeline.

Antler identified two categories of rocketship unicorns: Jets and Juggernauts. Jets are lean, capital-efficient companies, while Juggernauts are capital-intensive deep tech firms in sectors like defence, energy, and frontier labs. Despite the success of these unicorns, Series A funding has stagnated, with a drop in the number of active investors backing European startups from pre-seed through Series A since 2022.

European founders behind these rocketship unicorns are predominantly technical, with Juggernaut founders being older, more academically experienced, and often with Big Tech or research lab experience. However, Jets founders have more technical backgrounds and leadership roles. The report found that fewer than one in ten European startups make it to Series A, with the conversion rate falling from 23.3% in 2008-2019 to just 9.3% in 2023.

To remedy this crisis, Antler suggests investing $2.74 billion to restore the early-stage funding pipeline, equivalent to 10% of all funding raised by rocketship unicorns. This investment could generate an estimated 3 additional European unicorns annually, driving economic growth, job creation, and ecosystem liquidity. Antler's Christoph Klink emphasized that Europe's new generation of founders is more qualified than ever, but the lack of funding support is strangling their potential.