This finding comes from the recently published European tech ascendancy: Unlocking a continent’s innovation potential report, created by Creandum, the Stockholm-headquartered venture capital firm which backs early-stage tech companies, in collaboration with Dealroom, the tech startup data and intelligence provider.

The report has defined future unicorns as startups valued between $250 million and $1 billion which have raised since 2018. Meanwhile, a fully-fledged unicorn is generally defined as a private company that has reached or surpassed the $1 billion valuation threshold.

Specifically, the report highlighted that 34% of future unicorns are currently headquartered in the UK. The UK is followed by the “rest of Europe” at 22%, France at 16%, Germany at 15%, the Nordics at 8%, and Central and Eastern Europe (CEE) at 5%.

The above figures largely align with the statistics regarding the venture capital received in H1 of 2023: the United Kingdom secured 35% of the funding share, followed again by the “rest of Europe” at 19%, France at 17%, Germany at 15%, the Nordics at 11%, and CEE at 3%.

As it stands, Europe has 514 unicorns in 2023, spread across 65 cities and 25 countries. For instance, Tallinn — Estonia is particularly renowned for its tech unicorn output despite its comparatively small population and market size — has six unicorns, Stockholm has 31, Berlin 35, Paris 44, and London 105.

When it comes to the tech and business talent needed to drive innovation — and for possible future unicorns to indeed become unicorns — the report highlighted that Europe is comparatively well-placed.

For instance, Europe has 40% more developers than the US; students in the UK, Spain, Italy, France, and Germany are more interested in STEM-focused degrees compared to the US; and Europe is home to various leading universities for computer science and engineering, not least the University of Oxford, the University of Cambridge, and Imperial College London.

Further, in terms of density and innovation, Oxford is ranked as the third best science cluster in the world, coming only behind Boston and the Bay Area in the US.

“Over the past two decades, Europe’s tech scene has undergone a seismic shift, moving from an outsider to a global challenger,” said Staffan Helgesson, General Partner at Creandum.

“Europe now possesses all the essential ingredients for this continued revolution: a wealth of talent, a maturing ecosystem and entrepreneurial role models for the coming generations. By harnessing these strengths, Europe can lead the world in new innovation in all sectors.

“We have seen first hand how software has been a catalyst for disruption, accelerating the pace of innovation across various sectors. However, in the end it is the individual entrepreneur who will determine the success or failure of a venture.”

The full report can be read by navigating to the bottom of this blog post.

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While the report from Creandum and Dealroom underscores the sheer potential of the UK’s tech sector, many notable figureheads and organisations have recently suggested that the country will fall behind if the UK Government doesn’t amend its tech-related policies, regulations, and strategies.

For instance, in May, the CEO of Revolut — UK’s largest unicorn — said that “it’s hard to do business in the UK” and that “there are higher taxes to pay and an extremely bureaucratic regulator,” according to The Times.

Last month, at the beginning of June, techUK — the trade association — released a report that called on the government to ensure that the UK’s tech industry remains competitive and innovative, and provided 18 proposed solutions to the government for doing so.

“We need politicians to act, set out a long-term plan for the sector, provide a better approach to regulation and deliver on strategies for key technologies,” said Julian David, techUK’s CEO.