All that uncertainty has unnerved
markets. The number of IPOs in
Europe fell to 174 last year, a decline of
36 percent from 2015; and their value
dropped 49 percent, to $32 billion,
according to Ernst & Young. Five
high-profle IPOs in the U.K. were
delayed or withdrawn (Misys, PureGym,
TI Automotive, Mountain Warehouse,
and O2). Likewise, European M&A
activity declined 4 percent, and deal
value fell 20 percent, to $986 billion,
according to the Institute for Mergers,
Acquisitions & Alliances.
Despite all that, the mood among
European startups remains relatively
upbeat. It’s no wonder why: As revealed
by the third annual Inc. 5000 Europe
list—which recognizes Europe’s private
companies with the fastest-growing
revenue over three years—these com-
panies are averaging 486 percent three-
year revenue growth. That’s a collective
$70 billion of growth in revenue from
2012 to 2015.
Rich Pleeth is a former Google
employee who founded Sup, a social
network app that didn’t take of
because it couldn’t add users faster
than they abandoned the product.
But even he is optimistic about this
year. “I have a positive vibe about
THE STATE OF EUROPE
EUROPEAN STARTUPS CARRY
LAST SUMMER, a colorful truck began driving slowly around the streets of London. The back of it carried an electric pink, blue, and
yellow billboard that said, “Dear
startups, keep calm and move to
Berlin,” a play on the famous 1939
poster the British government used
to raise morale when the Nazi
bombing of London was imminent.
Indeed, the truck represented a
German invasion of sorts; it had
been sent by the FDP, a free-market
liberal political party in Germany.
As it drove around London’s Silicon
Roundabout, one Bloomberg
reporter tweeted a photo of it.
“The vultures are circling,” he wrote.
Neither London nor Europe is quite ready for vultures,
but 2016 was a punishing year. The Brexit referendum
threw the U.K. into chaos, unnerving London fntech
companies that discovered—to their horror—that they
may no longer be based in Europe’s banking capital
after 2019. Many will likely fee, along with the banks
they’ve partnered with, to other E.U. cities they
never imagined being stationed in. Already, Barclays
has identifed Dublin as the home of its new E.U.
The war in Syria has forced some two million
refugees into Europe, a displacement unmatched
since the expulsions of World War II. There was a
failed coup in Turkey, which is slowly turning away
from democracy and devolving into an Islamic
republic. And, of course, there were multiple mass
murders—in Brussels, Nice, and Berlin—inspired by
or directly tied to ISIS.
Regional economies are in a tailspin. The Italian
government has just begun the process of bailing
out its banks from the nonperforming loans on their
books, a task that Barclays believes will cost about
$55 billion all told, if it works. Impaired loans in the
entire system are estimated at $383 billion, about 20
percent of Italian GDP. Sitting on top of this economic
powder keg is a gaggle of right-wing populist parties,
like UKIP in Britain, the Five Star Movement in Italy,
the AfD in Germany, and the National Front in France,
which seem to be gaining strength. None of them are
expected to immediately win anywhere—but that’s
what everyone said about Trump and Brexit.
Since 2015, more
arrived in Europe
by sea, including
this group from
the Greek island
In the wake
vote to leave
to other cities.
BY JIM EDWARDS
18 - INC. - MARCH 2017
18 - INC. - MARCH 2017