Today’s Insights 🔍 

• Startup Success vs Failure

• The $7.8 billion startup failure of Hopin

• Startup Funding Data

• Top 5 Fastest Growing Startups

Read Time: 2.5 minutes

Startup Success vs Failure 📊 

The failure rate of European early-stage startups is over 86%. Of over 41,000 European startups analyzed only 5,700 managed to proceed to the growth stage through investor funding.

This statistic is not just a cautionary tale but a crucial data point for investors and founders. It underscores the reason behind a rigorous vetting process employed in VC portfolios which only invest in 0.05% of total startups.

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Startup feature
The $7.8 billion startup failure of Hopin

Pandemic-era tech unicorn Hopin, a virtual event company, was once the fastest growing startup in Europe.

Hopin launched in March 2020, a year later it hit a $5bn valuation. It became a triple digit growth startup raising over $1bn from investors such as a16z, Salesforce & Coatue.

It seemed to be the next big European unicorn, but after slowing growth, multiple rounds of layoffs and a misaligned strategic direction, it was forced to sell its primary video events business for only $15m to RIngCentral.

In August 2023 the valuation plummeted from a high of $7.8 billion to less than $200 million. 

Navigating in uncertainty as a startup can be a challenging endeavor, adding onto this the pressure of a record valuation, and expectation of high returns the crash of Hopin is a cautionary tale of the risks behind FOMO and investor pressure.

Startup Funding & Exit Likelihood ⚖️

Across data for 5,417 startups only 14% progress from the seed stage to series A. This emphasizes the challenges of early-stage growth.

Funding progression improves to 39% for Series B, suggesting better prospects for startups gaining traction. However, advancement rates decrease in Series C to E (34%, 26%, 31%), indicating a competitive market and a tendency towards early exits.

Top 5 Fastest Growing Startups 💹 

With thousand of funded European startups they are all competing to be the next high-growth success story. The average growth rate for startups are in reality more closely 20%, but there are always outliers.

Two startups are outpacing the rest:

333% Venteterra - building a global services business to help developers design, build, and operate their wind farms

303% Nothing - creating uniquely designed consumer electronics that are transparency-focused.

SearchVentures Insights

The data underscores the reality of startup risk with an 86% failure rate for European startups. In the funding landscape, data shows the competitive reality for startups: only 14% successfully transitioned from Seed to Series A funding.

A key insight is that while risks and opportunities coexist in European startup investments, data serves as a crucial tool for investors to assess the investment risk of startups with increased precision.

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See you next week

Cheers,

Odin Lund & Hariprasad Mohandas