TWO YEARS ON: Which startup is Europe’s next €100 million exit?

€100 million_exitTwo years ago, I wrote a piece for TechCrunch about which European startup was ‘cleared for the next €100+ million exit’ and picked out five European companies that I considered the most likely to do so.

A lot can happen in two years, but as can be seen from the summaries below, all five have ‘moved on’, pulled in more funding and taken their businesses to another level. These five predictions weren’t too far off the mark and I’m currently putting together another list of five companies that look as if they have huge potential. Any suggestions would be welcomed.

But in the interim, here’s a round-up of those five companies. One has raised less than $10 million in funding while another has raised more than a quarter of a billion dollars. But they’re not so far apart, not so far apart at all. Perhaps all of them are worth at least €100 million, perhaps they don’t need to exit at all.

Brandwatch (less than $10 million funding)

When this list was published, Brandwatch’s US rival Radian6 had been bought by Salesforce for $260 million and the future looked good. It still looks very good. After two angel rounds of less than a million dollars, Series A for $1.5 million and a further venture round of $6 million from Nauta Captial at the end of last year, the company has been canny in its growth.

With offices now open in New York, Chicago and Berlin and an expanding team in Brighton, the UK’s upcoming tech cluster, its social media monitoring system defines Big Data and is used by the world’s leading brands to define their products. Earlier this year it was named on WorldBlu’s list of ‘Most Democratic Workplaces 2013’.

Mind Candy ($10 million funding)

Owner of Moshi Monsters, the company is London’s poster child company and its owner, Michael Acton Smith is now a TV star as well as the owner of ‘Facebook for Kids’. Two years ago, the hype was intense around Mind Candy, but its star has dimmed of late. Strong in the UK and Germany, the company is struggling to break into the US and Japanese markets.

The company may not even be the biggest games company in London after the extraordinary success of King.com (surely one for inclusion in the next list) and its Candy Crush phenomenon. However, partnerships with other games companies are helping it to push its business beyond its ‘young kids’ demographic. It will be interesting to see how this works out.

Viadeo (more than $50 million funding)

Rather like Brandwatch, Viadeo, the ‘French LinkedIn’ was the immediate beneficiary of a competitor’s business, but it was LinkedIn’s IPO rather than a rival’s acquisition that gave it some financial gloss.

Since then the company has pivoted from being a rival to LinkedIn to one that seeks to dominate in the non-English-speaking world after strategic acquisitions in India, Brazil and China. In the past two years, the company has added 20 million users and now has more than 50 million users and a much younger demographic in the expanding countries of its targeted territories.

Soundcloud (more than $63 million funding)

The ‘YouTube for audio’, Soundcloud is not only exceptional because it doesn’t only refuse to capitalise both words in its name, but because of its file-sharing service is now used by more than 200 million people every month.

Even with another round of funding of $50 million at the start of 2012 and unlike the other four companies profiled here, Soundcloud is yet to be profitable, but with these type of numbers, it is only a matter of time. Its rise can be compared with its head office in Berlin, an increasingly important global tech hub.

Spotify ($288 million funding)

What more needs to be said about Spofity’s potential? Since the TechCrunch piece was published, the company has gone through two separate rounds of $100 million in spite of competition from Amazon and Google. At some stage its investors will want its money back and an acquisition in great excess of €100 million is likely… or more funding.

Its 2012 revenues doubled to €435 million but also come with a €58.7 million loss and to get to profitability it may need even more funding. But there is great confidence about the product as it continues to launch in new territories. As the student yearbooks so often say… one most likely to.

Monty (624 Posts)

Monty Munford has more than 15 years' experience in mobile, digital media, web and journalism. He is the founder of Mob76, a company that helps tech companies raise money and exit. He speaks regularly at global media events with a focus on Africa, writes a weekly column for The Telegraph, is a regular contributor to The Economist, Wired, Mashable and speaks regularly on the BBC World Service.