Mario Draghi could not have been blunter. The former Italian prime minister and ex-president of the European Central Bank warned last year that Europe faced an “existential challenge” unless it could take advantage of the latest technologies to raise its productivity.
In his landmark competitiveness report, Draghi noted that Europe had largely missed out on the previous internet revolution, pointing out that the EU accounted for only four of the 50 top tech companies in the world. “The EU is weak in the emerging technologies that will drive future growth,” he wrote. “Europe must profoundly refocus its collective efforts on closing the innovation gap with the US and China.”
The 150 European start-up hubs recognised in this Financial Times report are certainly doing their best to boost the region’s innovative potential. They have helped incubate a new generation of ambitious businesses, including Klarna, Celonis, Isar Aerospace, Hugging Face, Alan and Pasqal, that span the finance, software, space, artificial intelligence, insurance and quantum industries. With a fair wind, it is possible that some of these companies, at least, may emerge as global champions in their sectors and sharpen Europe’s competitiveness, as Draghi dreams about.
It is striking how many of the start-ups being nurtured in Europe are AI companies — or are using AI to reimagine business models for traditional industries. At the hardware and infrastructure level, Europe may have few, if any, companies that can compete with US groups such as Nvidia, Alphabet, Microsoft and OpenAI, but it stands a far better chance at the application layer. Scores of start-ups are springing up across Europe looking to use AI to redesign workflows in pretty much every industry.
Taavet Hinrikus, the co-founder of Wise and now partner at the venture capital group Plural, says that the big US tech companies definitely have a big advantage in AI today. “But I think that every application will be rebuilt with AI and there Europe has a fantastic opportunity to compete,” he adds.
To identify Europe’s leading start-up hubs — a centre for founders providing programmes to develop and grow a company — the FT partnered with the international data and research company Statista as well as Sifted, the FT-backed media start-up that covers European tech. The views of investors, entrepreneurs and academics were fed into the model, which also took into account the success of the “graduates” of these hubs. The main criterion for the rankings came from the alumni themselves, who were asked to assess how well the hubs provided mentoring and training, infrastructure, legal assistance and networking and funding opportunities.
Some content could not load. Check your internet connection or browser settings.
The leading start-up hubs spanned university-affiliated offshoots to fully commercial ventures. For the second year running, UnternehmerTUM topped the rankings. The Munich-based hub was founded in 2002 as a non-profit organisation by the entrepreneur Susanne Klatten, the billionaire heiress of the Quandt family fortune, with the aim of developing “a new culture of entrepreneurship” in Germany.
Attached to the Technical University of Munich, the hub can call on a broad network of scientists, entrepreneurs and investors, who can help support a company from launch to stock market exit. The hub has incubated more than 1,000 companies, including the transport group FlixMobility and AI start-up Konux.
Second in the rankings was the Paris-based Station F, which claims to be the biggest start-up campus in the world.
Founded in 2017 by the French entrepreneur Xavier Niel, Station F hosts 1,000 start-ups, many of them focused on AI. Of the incubator’s top 40 best performing start-ups, 34 of them have AI at the core of their business models.
“Europe can create competitive AI models today,” Niel recently told the FT. “I think we can create big things with a few hundred million euros.”
In third place was Start2 Group, which refers to another Munich-based hub rather than a strategic arms reduction treaty. Start2 works closely with Germany’s federal ministry for economic affairs and climate action, which finances most of the programmes for local start-ups. But the group has a strong international mindset with a presence in 18 countries and offshoots in the US and Asia.
The highest-placed UK hub was Founders Factory that came fifth in the rankings. The hub, which works with about 60 bigger corporate partners across four continents, is both a venture builder and an early stage investor. Its portfolio start-ups, now numbering more than 300, have raised $1bn in capital since 2015.
Overall, the UK accounted for 29 of the 150 top European start-up hubs with Germany on 19, eastern Europe on 17 and Scandinavia and the Baltics on 16.
About 3,000 start-up hubs were identified as potential candidates for the rankings and invited to register. To qualify, the hubs had to have been operating since at least 2020, to have a physical location in Europe and run at least one incubation or acceleration programme.
