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© Alex Hahn

The pandemic has drawn a clear line between corporate winners and losers, with those best able to exploit soaring demand for digital services and health-related applications registering record growth over the past year.

But this year’s FT-Statista ranking of Europe’s fastest-growing companies shows that the start-up scene, overall, remains very strong. To earn a place on the list, companies needed a minimum 2017-20 compound annual growth rate in revenue of 36.5 per cent — marginally ahead of the same figure in last year’s ranking.

And the top companies registered a CAGR of more than 400 per cent over the period, which takes in the initial phase of the disruption caused by successive lockdowns.

Since then, sectors such as technology have continued to flourish. Stuart Chapman, co-founder of London-based venture capital investment group Molten Ventures, describes 2021 as “a breakout year for the European tech sector as it crossed the $100bn-plus capital invested mark”.

He adds that the pandemic accelerated existing trends, such as rising use of cloud computing, but “more importantly, it encouraged new innovations to meet the needs of changing behaviour”.

It is the need to live with Covid-19 that has sparked a once-in-a-generation change in society and the economy — how people work, live, shop, eat and communicate — and the businesses positioned to provide digital services have often benefited most.

“The pandemic has served as a clear accelerant to tech businesses — not just in the obvious spaces like digital health but more broadly as public adoption levels for all kinds of tech have soared,” says Dom Hallas, executive director of London-based start-up lobby group Coalition for a Digital Economy (Coadec).

Healthcare companies, in particular, have prospered. The number of start-ups in the ranking that focus on healthcare has nearly doubled, from 25 in the previous edition to 44 now.

Among the fastest-growing businesses in 2017-20 is second-ranked Kilo Health, a Lithuanian investor in, and developer of, healthcare apps. In the UK, health-focused businesses include Thriva, which ranks seventh, as well as Pharmacy2U and Doctify.

Most high-growth companies on the list hail from the tech sector, which has provided ways to serve customers stuck at home, while others have discovered new audiences ready to be educated and entertained remotely. OnlyFans, a subscription social platform that is best known for adult content, had a period of spectacular growth, going from just four employees in 2017 to 800 in 2020, and achieving a CAGR of almost 400 per cent.

“OnlyFans is part of the zeitgeist,” says Amrapali Gan, the platform’s chief executive. “We continue to experience remarkable growth as creators and fans from all genres choose OnlyFans to own their potential and monetise their content.”

Sustainability and environmental purpose have also proved to be a secure base for growth.

Finnish start-up Swappie, which refurbishes old smartphones, is the top-ranked company, riding a wave of interest in recycling and reducing electronic waste.

Swappie employee looking through an apparatus
Finnish company Swappie refurbishes smartphones

Other businesses have benefited from addressing disruption to global supply chains. During the pandemic, manufacturers and consumer goods companies faced immediate sales losses as supply chain problems prevented the delivery of key products. But, by providing logistical and supply services worldwide, London-based OCI Group became the third fastest-growing company on the ranking.

Regionally, western European countries still boast the largest number of fast-growing companies. But Chapman says cities across the continent — “not just London, Berlin and Paris, but Lisbon, Bucharest, Stockholm and Helsinki” — are now competing for resources and capital.

In the UK and Ireland, the number of high-growth businesses on the ranking increased from 135 last year to 159. These include hotly tipped companies such as Raspberry Pi — the mini computer builder rumoured to be seeking a stock market listing this year — and telecoms provider Hyperoptic, which provides high-speed broadband to homes in the UK.

white keyboard and mouse connected to a Raspberry Pi
UK based Raspberry Pi builds mini computers

Online boiler service Boxt, online greetings card supplier Moonpig, and GoHenry, which provides prepaid Visa debit cards and a financial education app for children, feature strongly, too.

Companies such as GoHenry also demonstrate the UK’s emerging position as a leader in fintech in Europe.

In part owing to this strength in financial services, and in health tech, London has retained its position as the leading European city for start-ups and scale-ups, with 81 of the fastest-growing businesses, compared with 71 last year. That puts it some way ahead of its nearest rivals, Paris and Milan, which have about 30 each.

Minister for London, Paul Scully, says the city’s position is “testament to the brilliant entrepreneurial spirit of our businesses”.

The UK capital’s strong performance continued into 2021. Catherine Lewis La Torre, chief executive of the state-backed British Business Bank, says: “We’ve seen record growth in equity investment across the UK over the past 12 months, with particularly strong growth in London.”

Brent Hoberman, executive chair at Founders Factory, a start-up hub, and co-founder of companies such as online retailer, believes London’s continued success is down to the right cocktail of conditions: “Smart capital, talent, and market access.”

He argues that this position will probably be sustained by emerging skills in more academic and science-based areas such as biotech, health tech, climate tech, space tech and artificial intelligence.

Hoberman adds that “it would be great to see the UK government make a bigger splash and pull for global talent to move to the UK”, as well as encourage large corporates to work more closely with start-ups.

Yet funding poses a potential challenge. Coadec’s Hallas says: “The cloud on the horizon is the narrowing funnel of start-up companies raising investment, and how we make sure that there are enough of them being generated — both inside and outside the capital — to reach this growth stage in future years.”

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