When Dutch payments processing firm Adyen went public on June 13, the stock jumped 100 percent above the initial share price, giving the company a valuation of 14.8 billion euros ($17 billion). Adyen's spectacular entry into the elite ranks of unicorns — companies valued at more than $1 billion — was all the more noticeable because it was a European company.
For years Europe has had a reputation of nurturing tech start-ups that couldn't grow big enough to reach the billion-dollar mark. But 2018 may be the year that finally puts this stigma to rest. A series of billion-dollar European companies have staged successful IPOs or are planning to list this year on exchanges from London to Sydney.
So far this year, 27 IPOs totaling $32.5 billion have been launched in Europe, eclipsing the 57 listings worth $8.28 billion last year, according to dealroom.co, an Amsterdam firm that tracks fast-growing companies. The big difference this year is not the number of listings, which has been fairly steady in recent years, but the size of the valuations of the companies. "There is a clear emergence of unicorns after a few years of increasing investment in the venture capital sector," said Gilles Babinet, a French serial entrepreneur.
This year's string of big-value European IPOs started with Spotify's listing in April. The music streaming company, based in Stockholm, offered an unusually small proportion of its shares at a valuation of $29 billion. Then Avast, a Czech cybersecurity group with CVC Capital Partners and Summit partners as investors, went public on May 10 at a valuation of $2.7 billion. Swedish digital payments firm Izettle should have been the next head-turner for investors, but PayPal swooped in with an offer of $2.2 billion — twice the IPO value.
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More potential unicorns are in the queue. Funding Circle, an alternative lender, and luxury fashion site Farfetch, both based in London, are widely expected to announce IPOs this year. Funding Circle's blue chip investors include Index Ventures and Accel Partners, and the start-up could be valued at $2 billion. CNBC reported earlier that Farfetch could reach a valuation of $6 billion. Its investors include France's Eurazeo and Singapore's sovereign wealth fund Temasek.