23TITANS OF TECH: EUROPE’S FLAGSHIP COMPANIES 04THE VIEW FROM GP BULLHOUNDManish Madhvani, GP Bullhound 06 Chapter 1: The New Titans of the Tech World10EXPERT VIEWIlkka Paananen, Supercell 16 Chapter 2: Europe’s Flagship Tech Companies28EXPERT VIEWJitse Groen, Takeaway 34 Chapter 3: Focusing on the Founders38EXPERT VIEWTomer Bar-Zeev, IronSource 40 Chapter 4: Titans of Tomorrow 44 Methodology CONTENTSManish MadhvaniManaging Partner In the past, many people including us focusedon the billion-dollar valuation to defne a certainbreed of success. It’s time to remind ourselvesthat the valuation itself is not the most importantthing, and is just a proxy to gauge the underlyingstrength of a business.It has often been said that European techentrepreneurs are focused only on exits, theyare too quick to sell, and they are thereforeincapable of building serious technology andcompanies of genuine scale. We believeotherwise. Our research into Europe’s billion-dollartechnology companies has shown that thereis an army of ambitious entrepreneurs buildingbusinesses of serious scale across the continent. Europe is now home to 57 businesses worth abillion dollars or more and it is even home to threebusinesses valued at over $10 billion – Supercell,Zalando and Spotify. Clearly, Europe’s technologysector has the talent, confdence, and capital tocreate a stable of healthy billion-dollar businesses;but what nextHow can we raise the ambitionlevel further As the industry surpasses these milestones withincreasing regularity, it is more important thanever before to set the next ambition level.Entrepreneurs must aim for new heights to scale.This is why we have set out in this report to identifyand understand European tech’s next milestone:the ‘titan’.Titans are tech companies that have consistentlyoutperformed the market. They are businessesthat scale through solid revenue growth, rapidcustomer acquisition, and a level of ambitionthat propels them to achieve global dominance,reaching valuations of over $50 billion in a shortperiod of time. There’s very few of them in theworld, six in fact founded after 2000 – Facebook,Uber, and Tesla in the US and Baidu, Ant Financialand Didi Chuxing in China – and we frmly believethat a European business will soon follow in theirfootsteps. This report examines in detail a number ofperformance indicators and shifts in marketconditions that suggest that Europe will soonachieve the critical mass required to deliver atitan to rival the US and Asian leaders.We have also focused on our successfulentrepreneurs to understand what sets themapart in the landscape, and how they can inspirethe future generation of founders. We haveincluded the expert insights of three inspirationalfounders: Ilkka Paananen of Supercell, Tomer BarZeev of ironSource and Jitse Groen of Takeaway. com. Their creativity and ambition fuels theirsuccess, and motivate all of us to think bigger. The starting point is encouraging: Europe’s billion- dollar businesses are healthier than ever. As theindustry matures, there is a whole host of provenwinners that are reaping the benefts of marketconsolidation to accelerate revenue growth andtransition to proftability. When we looked at asample of billion-dollar companies from acrossEurope, we found that revenues nearly tripledbetween 2013 and 2015, rising from $163 millionto $454 million.(1) Similarly, we found that acrossa range of European companies valued over$1 billion, 72 per cent of these businesses areproftable, versus 60 per cent in last year’s set.(2) Europe has also never been home to such adepth of world-leading technology hubs that arecapable of creating businesses of genuine scale.Ambition defnes successful entrepreneurs. Ambition sets apart the handful of pioneers that confront fundamental problems in the world’s largest industries andcreate innovations that transform business and society. However, the ambition ofEurope’s leading digital entrepreneurs has been questioned time and again. This is whywe have consistently set ourselves the objective of setting Europe’s next ambition level.THE VIEW From GP Bullhound EXECUTIVE SUMMARY 4 。。。。。。