The billionaire pipeline: How a 2000s startup boom fueled Europe’s tech renaissance

Picture the scene. It’s 2003 in Tallinn, Estonia. Taavet Hinrikus, a 20-year-old computer whiz, has just accepted an offer to become the first employee of a little-known video-call startup, Skype. Little did he know then, but it was the start of a multi-decade evolution that would make him one of Estonia’s first billionaires, spawn dozens of startups, and generate billions of dollars in venture funding across Europe. “The idea that you can start using this [video-chat technology] to have voice and video conversations was pretty crazy for a boy who was born in the Soviet Union. But it was also obvious to me that it was going to be an exciting journey,” Hinrikus tells Fortune.

Today, at age 43, Hinrikus can add cofounder of payment platform Wise and partner of founder-led venture capital fund Plural Platform to his résumé, having steered multiple companies through countless funding rounds. Hinrikus’s story—unique at the turn of the century—would make him a pioneer in a fascinating business trend: In Europe, a surprisingly high number of employees of unicorns like Skype would go on to launch still more unicorns.

Europe's founder factories

It would be an understatement to say that Europe’s tech scene has undergone a revolution since Hinrikus started his first day at Skype.

“The idea that you can start using this [video-chat technology] to have voice and video conversations was pretty crazy for a boy who was born in the Soviet Union...”

Taavet Hinrikus

Some 1,650 European tech startups have been founded across Europe by former employees of 215 unicorns since 2008, according to data provided by venture capital group Accel and Dealroom.co. The pair provided Fortune with data on European spin-outs of startups in the region, having separately analyzed Europe and Israel starup activity over the21st century.

Certain countries have punched above their weight. Sweden, for example, is a standout performer, breeding the multibillion-dollar businesses Spotify and Klarna. Employees from that pair have founded a further 123 startups. King.com, the Swedish gaming group behind Candy Crush Saga, has seen 43 employees leave to create their own companies.

Skype employees would go on to launch 31 startups in total, including Hinrikus’s Wise and the ride-hailing group Bolt. To date, those startups have raised $3.5 billion in funding.

1,650

The number of European tech startups founded across Europe since 2008.

Most founders, around 55%, start their businesses in the same European city where they were first employed. This has helped spawn network effects across Europe that have turned unlikely cities, like Tallinn, into thriving tech hubs.

Repeat founders have also blossomed from the early-2000s scene. Spotify cofounder and CEO Daniel Ek, perhaps the most high-profile founder to emerge from Europe this century, recently announced a new funding round at a $1.7 billion valuation for his health-tech startup, Neko Health, making him a serial unicorn creator.

The question is, why did it take Europe so long to kick-start its entrepreneurial streak? And what changed to allow the continent’s founder factories to flourish?

Trailblazers

When Netherlander Harry Nelis—a partner at American fund Accel—who has operated out of Europe for the past 21 years, interviews a candidate for his company, he always asks the same question: “What’s the riskiest thing that you’ve ever done in your life?”

Nelis’s own answer? Getting married (he says he’s been happily married for 30 years now). But a close second might be Spotify. Nelis was part of the team that gave Spotify early financial backing, despite industry experts warning that a streaming music business would never work.

“The momentum was almost undeniable,” Nelis recalls when asked why he backed it anyway. “The product was so good and so easy to use, and the early consumer reaction so overwhelming, the company actually had a chance to make it.”

Think of any multibillion-dollar European tech company today, and it’s likely Accel was involved in its inception. After the group raised Series A funding for U.S. companies like Facebook, Nelis’s only real mandate in Europe was to find entrepreneurs with “big ideas.” That daunting brief is probably why he still asks job candidates about risk today. 

“The biggest mistake in venture is not losing money on an investment. It is missing the outlier,” Nelis tells Fortune from Accel’s London office. 

When he first came back to Europe after spending his early career in Silicon Valley, Nelis was struck by an obvious difference in attitude between Americans and Europeans, namely that it was unusual for the latter to pursue building a company instead of joining an established one.

“The biggest mistake in venture is not losing money on an investment. It is missing the outlier.”

Harry Nelis, partner at Accel

Europe has long been accused of lacking the work ethic often associated with Americans. Tom Blomfield, cofounder of British unicorns GoCardless and Monzo, last year accused the U.K. of suffering from a “know your place” attitude that suppressed entrepreneurship.

Matt Robinson, a fellow GoCardless cofounder and now a partner at Accel, disagrees with that assessment. However, like his colleague Nelis, Robinson did notice a difference in Europeans’ attitude toward entrepreneurship when he started GoCardless in 2011.

“Starting a company was not really an accepted thing to do. You know, when you sit over here and start a company, I think people assume you’re unemployed or unemployable,” he says. 

Some elements crucial to growing a startup, like access to seed funding, were nascent in the U.K. just 15 years ago, Robinson notes. 

Those who spoke to Fortune for this article, though, were aligned in their assessment that rather than an attitude overhaul, Europe just needed a few successful founders to show everyone else what was possible.

Ilkka Paananen, CEO and co-founder of Finnish mobile gaming unicorn Supercell, was one of those entrepreneurs working without a roadmap to follow.

"There were very few European tech entrepreneurs who I could call for advice, for the simple reason that we just did not have many tech startups at scale at that time," Paananen recalled.

Nelis says Europe’s startup founders were role models who made success easier to envision for their successors. One of those would be Plural’s Hinrikus, who watched Skype become one of Europe’s first unicorns. 

“People know the drill better,” Nelis says, noting that new startups come to Accel today with plans to solve big problems in a way they often didn’t 20 years ago.

Plural’s Hinrikus says his crystallizing moment came when he realized Niklas Zennström, cofounder of Skype, didn’t possess any magical powers that made him more likely to be a successful founder: “He was an average person, just like me. If he can do it, then I can equally do it.”

Robinson says the major obstacles in building a startup became easier for him the second time around, namely, attracting the best talent and fundraising. 

Since Nelis returned to Europe in 2004, unicorns and decacorns have emerged from Europe’s VC pipeline, with a centacorn surely inevitable. Robinson spoke to one company that talked ambitiously about becoming the first-ever kilocorn, a $1 trillion private startup.

“I cannot imagine saying that or even thinking that back in 2011,” Robinson says.

Stick or twist?

Operating a thriving entrepreneurial startup environment brings the inherent and evidenced risk that employees will one day leave to start their own, sometimes competing, ventures.

Tara Ryan, Monzo’s VP of people experience, doesn’t see it as a tradeoff.

Monzo stands among Europe’s most prolific founder factories. The banking unicorn has spawned 23 startups since its creation. Oftentimes, when a new company is formed out of Monzo, it’s not just one person departing.

“People start their own businesses, but often their founding team or their first handful of employees are also Monzonauts,” she says.

This has been something embraced, rather than suppressed. At Monzo, Ryan says, an internal company website celebrates former employees who went on to become founders. 

“People start their own businesses, but often their founding team or their first handful of employees are also Monzonauts."

Tara Ryan, Monzo’s VP

“I don’t think it is healthy for employees or employers to try and retain people at all costs,” she says.

Accel’s Robinson goes one further. While at GoCardless, he would tell early interviewees his hope for them was that they would eventually leave and form their own startups.

The European dream

It’s worth a wager that Hinrikus, dressed in a hoodie and branded tee, and speaking from Plural’s London office, looks as invigorated as he did when he stumbled through Skype’s doors on his first day as an employee. 

Skype was acquired by eBay in 2005 for $2.6 billion, a now-familiar case of an exciting European startup being eaten up by a much larger U.S. tech behemoth. Its subsequent parent, Microsoft, no longer needs Skype now that Microsoft’s Teams video-chat function has been widely adopted. Similarly, DeepMind, the pioneering artificial intelligence research laboratory founded in London, is today a Google subsidiary.

Increasingly, though, European companies, driven by growing access to both capital and talent, are managing to stand on their own two feet.

Spotify, Accel’s risky early bet in Europe, had a market value of nearly $125 billion at the beginning of March. Its Scandinavian leadership team has maintained its grasp on the company’s operations as Spotify battles with Apple and Amazon. 

Other younger companies across Europe, like Monzo, now face the challenge of growing while maintaining what made them unique as startups. Alex Norström, Spotify’s copresident and chief business officer, has advice for startups on that journey.

“We’ve tried to maintain our entrepreneurial energy as we’ve scaled globally,” he says. “At Spotify, it’s always been about having big ambitions and delivering on them.”

Supercell's Paananen, meanwhile, thinks Europe's quirks make it easier for founders to stay true to their roots.

"Europe has a very unique, diverse culture, and a unique way of life that we all love — this is a great place to live and grow a family. This should help us both retain and attract the best talent," said Paananen.

Hinrikus spoke of making the American Dream come true for his employees, only in Europe. 

“I think the scar tissue we have from owning our companies and building them makes us better partners for the next generation,” Hinrikus says. “There’s probably 100 early employees in various positions, even in customer support, who earned a million dollars from stock options.

“Now we’re showing time and time again that it’s not an American Dream,” he notes. “We have the same thing in Europe.” 

This article appears in the April/May 2025 issue of Fortune with the headline “The European dream."

This story was originally featured on Fortune.com