A new unicorn from the Baltics shows that Startups can grow in Europe too
The latest investment round for Vinted, a marketplace for used clothing, not only put 141 million Dollars into the pocket of the Lithuania based startup. It also valued the company at more than 1 billion dollar – the official definition of a unicorn (here). Vinted manages to put a cool chick on used cloths, calling it vintage and labelling it as sustainable – a very important word these days. That strategy made it the second unicorn from the Baltic region (the first was Estonian Taxify).
Vinted´s success is another sign, that finally Europe manages to get startups right. The VCs sums invested still get dwarfed compared to what companies get to rise in the US – 23 billion Dollar versus 130 billion Dollar in 2018 (Atomico). But Europe managed to quadruple it´s number within 5 years. Not all but some universities in Europe can keep up with it´s US counterparts in terms of the quality of research. At least some international students, not sure where Donald Trumps “America First” will mean for foreigners in the long run, look for Europe instead. One sign, the market evolves is that entities from the US like the Silicon Valley Bank reach out to small markets like Denmark (here).
And Europe managed to get better in turning good ideas into real businesses. The long boom in technology in the last 10 years made it possible for many founders to exit. Those former founders – acting as business angels in Berlin, Paris, London and Lisbon – are the foundation of an ecosystem that has been in place in the US for a long time. But for Europe, that is new. And it will still a long way to catch up. Angel money and Series A funding is much easier to come by in Europe than 10 years ago. But bigger rounds are still dominated by US VC-funds. To really catch up, Europe needs bigger pots of money to take nice businesses to dominating platforms. Europe has Vinted, the US has Google. Used cloths is nice, but hardly the kind of innovation that will shape the next decades.