Netherlands a rare bright spot as EU struggles to breed unicorns

The US continues to hog the global herd of unicorns, dwarfing the EU in both the number and total valuation of billion-dollar startups. However, the Netherlands provides a minor bright spot, according to a new report by PwC.   

More than 3,000 companies worldwide have reached unicorn status since 2013, collectively reaching a staggering valuation of $27 trillion, according to the study. The US accounts for 55% of these and a whopping 75% of their total valuation.  

In stark contrast, the EU has contributed just 9% of billion-dollar startups and generated 4% of global unicorn value in that timeframe. 

Despite the bloc’s poor performance, the Netherlands punches above its weight, ranking as the fourth-largest unicorn hub in the EU.   

The country has produced 32 unicorns, with 72% still active. Most emerged between 2018 and 2022, mirroring global trends. 

The majority of the active flock have engaged with TNW’s services. Among them are Ayden, Bird, Bunq, Booking.com, and Picnic.  

Overall, Dutch unicorns account for 11% of the EU total, ranking behind Germany, France, and Sweden. Amsterdam alone hosts 7% of all unicorns in the bloc.

The Netherlands has also done better than most at attracting unicorns to relocate. Five billion-dollar startups have migrated to the country. Only one unicorn has left for the US.  

In contrast, 64 unicorns have left the EU (excluding the Netherlands) while only 10 startups have entered from outside its borders. 

The data was released just days after a worrying report on the Dutch tech ecosystem. The new findings provides a glimmer of hope for the Netherlands, but also raises concerns.

Like the rest of the EU, the country lags far behind the US in fostering high-growth companies, even after adjusting for economic size, population, and venture capital availability. 

New tips on breeding unicorns

There are four primary reasons why the US remains the preferred playground for billion-dollar startups, according to PwC.

First, venture capital intensity (as a share of GDP) is significantly higher in the US than in Europe — 0.7% compared to just 0.2%. 

Second, regulatory fragmentation is causing disruption. Differences in language, local business conditions, and the lack of an integrated capital or banking union can impede growth. 

Third, the sheer size and uniformity of the US domestic market provide a competitive edge. Finally, companies often move stateside to access a deeper talent pool.

If the EU wants to close the unicorn gap, PwC advises the bloc to act decisively. Increasing venture capital investment, streamlining regulations, and fostering a more integrated single market could help startups scale faster.

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