The median VC fund closed in 2021 hit $64M, continuing a multi-year trend that has seen average fund sizes steadily increase. Interestingly, the median first-time fund raised in 2021 jumped to $66M and, in doing so, actually exceeded the median follow-on fund raised during the same period for the first time on record.

It's hard to say if this is a trend that may persist, but it'ss certainly illustrative of the potential to achieve positive outcomes for first-time fund managers that have the determination and persistence to withstand an often long and winding path to a final close.

Furthermore, there are definite differences across geographies, whereby Germany, Austria and Switzerland (DACH), and the UK & Ireland have a median VC fund size nearly double the size of the other European regions. This is perhaps less surprising given the relative maturity of these ecosystems, which has allowed them to raise larger successive funds.

Regardless, the increase in fund sizes speaks to the larger opportunity set available in Europe. As strong European companies become more numerous, it is crucial that European VCs and thereby European LPs have the necessary funding to capitalise on these opportunities.

If founders who have prior experience at a unicorn company are more likely to go on to help build another unicorn, the current distribution of those companies should act as a strong indicator for where success will compound over the coming years. To test this hypothesis, we compared each country's share of European unicorn companies, to their share of talent with unicorn experience.

Broadly-speaking, countries that have produced higher numbers of unicorn companies are also home to higher proportions of founders and leaders with unicorn experience. This is not surprising. However, some interesting variances emerge when we add data on the geographic distribution of all companies (not just unicorns) to the analysis.

Germany, for example, captures a disproportionate share of total unicorns, as well as share of founders and leaders with unicorn experience, relative to its share of all companies. Sweden and the UK follow the same pattern. France, by contrast, under-indexes on unicorns relative to its share of all companies in the dataset, even though in absolute terms it is still a key driver of European unicorn creation.

At a continental level, the whole of Europe has benefitted from the absolute increase in funds flowing into local startups. The proportion of funding flowing into individual regions has remained relatively constant over the past five years, but there are indicators that this may be starting to shift. While DACH and France & Benelux have captured roughly the same share of European funding throughout the last five years, the UK & Ireland have seen a small drawback as Southern Europe has been capturing a larger share of funding in the most recent years.

When looking at the number of startups per population in a country, some of these high success rates are put into perspective - Estonia, for example, produces an incredible number of unicorns, but also has the highest number of startups per capita, at over one startup per 1,000 inhabitants. Estonia's concentration of tech in society is the highest in Europe by this measure. Iceland and Ireland are almost tied next in line.

The United Kingdom is, again, further down the list but about twice the size of Europe's average of 269, at 574 startups per one million inhabitants. France is only just above the average at 307 startups. Germany is much further down the list, at only 227 startups per million people - only 83% of Europe's average.

Across European markets, there are interesting differences in the distribution of founders by years of cumulative experience in the role. France and Germany, for example, have a greater share of founders with less than five years of cumulative experience in the founder role. This could reflect the increasing attraction of entrepreneurship in the eyes of young talent, as the growing strength and maturity of their local ecosystem leads to better opportunities.

Through our sample of tech founders and leaders, we analysed more than 21,000 moves across European borders - and 40,000 moves between cities. This analysis highlights the inflows and outflows of talent in each country, and how these flows have evolved over time. For example, we can see that in the period 2020-2022, France has had a 2.2x net inflow of founder and leadership talent. In other words, for every tech leader that moved out of the country during this period, there were more than two that moved into France.

The data shows how certain ecosystems have been able to transform their talent flows over time. Most notably, France, Germany and Spain saw huge gains in inflow of founders and leaders in recent years. By contrast, other ecosystems, like Belgium and Ireland, have seen a small decline in net inflows.

It's important to note that this analysis is based on a data sample that exclusively looks at founders and C-Level leaders of companies that received investment in 2022. As such, the conclusions we can draw from these trends are limited by the scope of the analysis.