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Ecosystems of startups companies in the world

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In this article I will talk about startups companies and where they are in the world. First we start by defining what an ecosystem is. An ecosystem  in biology is the set of species in a given area that interact with each other and with the environment that surrounds them. If we now refer to the business world, we can also say that there are ecosystems, clearly defined places where there are a large number of companies working in more or less similar sectors. They form a kind of niche in which they develop their activity.

The power of entrepreneurship

The entrepreneurial spirit that some countries have makes them excellent places where new companies are created that proliferate as if they were mushrooms in a forest. Entrepreneurs are considered as national assets that must be maintained, cultivated, motivated and remunerated in an appropriate manner. Part of the success of many nations, such as the United States, is because they are world leaders in innovation, research and  are born with the seed of a forward-thinking entrepreneur.

Large entrepreneurial companies change the world as we know it. They use technology as a tool to promote innovations that improve the lives of others or enrich the way we connect with the world.

The birth of fertile territories

The fertile territories of start-up companies arise in places that favor the development of those same companies. It is a habitat with the right characteristics for the birth of companies. A habitat under this premise would be a series of physical and geographical factors that affect the development of companies in the same area.

The west coast of the United States is characterized by many valleys. A very famous valley is Silicon Valley. Silicon is a metalloid and the second most abundant compound on earth. It is very similar to Carbon, but it was preferred to Silicon due to its lower atomic weight to form biological structures.

Silicon Valley is named after its sand. As a term, it first appeared on the cover of Electronic News Magazine in 1971. The term quickly became associated with technology, so that now the two concepts are almost inseparable.

Many companies that make computer chips (such as Intel) operated or were headquartered in Silicon Valley in 1971. The first ingredient in the computer chip manufacturing process is sand. With the passage of time the name was maintained and today represents part of the technology industry, due in part to a large presence of these companies in this area.

Silicon Valley, the place where Unicorns born

“Unicorn” is a term used in the venture capital industry to describe a startup company worth more than $1 billion. The term was first popularized by Aileen Lee, founder of Cowboy Ventures, an equity fund based in Palo Alto, California. Unicorn companies owe their name to the fact that they are like the mythological animal of the unicorn, exceptionally rare and synonymous with success.

In October 2021 there were more than 800 unicorn companies worldwide. Former unicorn companies are Apple,  Facebook  and  Google. Many of these companies are in Silicon Valley, California. In the following graph you can see the location of unicorn companies in the world, ranking from 2017 to 2021.

Ecosystems in Europe

Europe’s start-up ecosystems often lose their comparison to Silicon Valley, but the continent is gaining ground with more tech startups valued at more than a billion dollars. According to the website Europeanstartups.co  there are a total of 119,000 start-ups in Europe and provides employment to about 2.9 million people.

Figure 1. Data on entrepreneurial companies in Europe, source: https://app.europeanstartups.co/dashboard

Germany is home to Europe’s largest start-up, BionTech,a company that develops personalized immunotherapies with a focus on cancer medicine and has developed one of the vaccines for the pandemic caused by the  SARS-CoV-2 virus. It is estimated an increase in turnover in 2021 of 3000%. It also has  65 patents  according to data from this website.

Nordic Countries: The Rise of Finland

The Nordic countries are an emerging powerhouse among tech start-ups. Two of these companies should be highlighted:

  • Spotify, based in Stockholm, Sweden. It is a company that provides streaming music to listen to on various devices. We talked about it in this article How Spotify Suggests Songs You Like.
  • Supercell, based in Helsinki, Finland. It is a company that makes touch screen games focused on tablets and mobile devices.

Nordic countries are usually countries with high taxes and expenses, where employees receive generous social benefits and long vacations. It seems not to be the best ingredients for the emergence of emerging companies, however, it is a region where many entrepreneurial companies usually appear. These countries have a strong reputation for creating innovative companies that work to create a sustainable impact on the world.

Comparison between territories

The global map highlights the United States, Europe  and  China. According to data from  Dealroom.co if we look at the invested venture capital, we can clearly see the power of the United States and Canada, as shown in the following table:

20172018201920202021
USA and Canada81.900 M €128.000 M €119.500 M €140.900 M €231.700 M €
 Europe23.300 M €26.800 M €38.600 M €38.700 M €80.600 M €
 China55.400 M €83.000 M €47.500 M €47.100 M € 42.000 M €
Southeast Asia6.300 M €8.600 M €7.600 M €7.200 M €   15.600 M €
Latin America1.100 M €2.700 M €4.500 M €4.500 M €14.200 M €
 Africa 250 M €607 M €998 M €576 M €1.500 M €

Entrepreneurship in Spain

There is a close relationship between the economy, the progress of a country and the presence of entrepreneurs. In Anglo-Saxon countries, for example, there is a long tradition of working hard, as well as a strong defense of market freedom. These countries were the pioneers in the Industrial Revolution and have reached high levels of income.

In Spain there have also been large companies and entrepreneurs. Not all projects, ideas and initiatives come to fruition. In Spain there have been many entrepreneurs, and most of them have had projects that failed. There are several examples of entrepreneurs in Spain who started several companies that failed to succeed. However, the ideas of these people were the germ used by other companies that did curdle and now those companies are unicorns. For example, in Spain the idea of cloud computing arose through a platform called Eye OS that provided a remote desktop through a web browser.

Unicorns in Spain

In Spain we can also talk about unicorn companies. According to the consultancy CB Insights in Spain there are a total of 3 unicorn companies that can be seen in the following list:

EMPRESAVALORACIÓNFECHA DE INGRESOSEDEINDUSTRIA
Cabify$1400 million1/22/2018MadridAutomotive and transport
Copado$1200 million9/13/2021MadridData management and analysis
Jobandtalent$2350 million12/01/2021MadridInternet services

However, this list is likely to increase in the coming years due to the emergence of very promising start-ups that can join this select club. Such is its importance that the government of Spain has approved the Startup Bill to favor innovative entrepreneurship in the ecosystem of emerging companies. This law puts a legal framework in relation to emerging companies that will boost talent, the promotion of investment and administrative agility, seeking to make Spain more digital, more innovative and will be key to promoting entrepreneurship.  

Spain is the only country in Europe that has two clusters (concentrating areas of emerging companies), Madrid and Barcelona.

Madrid Cluster

According to a report by Startup Radar Madrid+d,  the community of Madrid is the sixth in Europe in terms of promising projects of emerging companies, technology and investment in innovation. The total number of start-ups is  2,433,  267 scalable companies and there are  10 future unicorn companies. In this report there are three unicorn companies:

  • Allfunds,a company that provides advice to banks and investors.
  • Cabify, is a technological platform that puts private users in contact with transport companies.
  • Idealista, is a real estate portal through the internet.

Barcelona Cluster

The Barcelona cluster has companies mainly focused on the internet, mostly related to e-commerce and technological innovation. Wired magazine selected in August 2021 a list of 10 start-ups in the city of Barcelona. These companies would be:

  • Amenitiz, a company to make direct travel reservations.
  • Factorial, it is a platform to manage the resources of a company.
  • Heura, a food company for a sustainable future.
  • Hubtype, an application that allows you to talk directly to customers.
  • Koa Health, focuses on workplaces, connecting workers with mental health experts to improve the work environment.
  • Laagam, an e-commerce company based on the sale of clothing.
  • Learnlife, is a company that presents a new educational model.
  • MediQuo, an app-based telemedicine platform to communicate directly with medical services.
  • Unnax, is a company that presents a new way of working financial services.
  • X1 Wind, an innovative company with the potential to make a radical change in floating offshore wind.er un cambio radical en la energía eólica marina flotante.

References

  • https://startupgenome.com/report/gser2021
  • https://app.europeanstartups.co/companies/biontech/patents
  • https://app.europeanstartups.co/dashboard
  • https://app.europeanstartups.co/companies/biontech/patents
  • https://www.cbinsights.com/research-unicorn-companies
  • https://www.lamoncloa.gob.es/consejodeministros/referencias/Paginas/2021/refc20211210.aspx#startups
  • https://www.wired.co.uk/article/barcelona-hottest-startups-2021

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