Sunday 12 December 2021
Employees become founders
Rocket Internet is the Most Successful “Startup Mafia”
by Hannah Shvari
For the first time this year, more than $100 billion will flow into the European start-up landscape – of which about twelve billion will go to Germany. This is also due to the unicorn network effect: successful unicorns give rise to new unicorns.
In the startup scene, it is almost a tradition that statisticians always report new financial records at the end of the year. They’re also delivering reliably this year: more than US$100 billion will flow into the European start-up scene for the first time, according to a “State of the European Tech” report from venture capitalist Atomico and analysis service Dealroom. This year, of which about 12 4 billion to Germany. The founders of Europe get bigger rounds than ever before and collect them at shorter intervals.
But where does this allure for international investors come from? One of the reasons can be found in the new report. You might call it the unicorn network effect: Where successful startups have emerged, more successful startups will emerge – especially because former employees become the founders themselves. In turn, they have significant experience and can hold investors’ money more easily. In this regard, record funding is primarily a testament to the maturity of the tech ecosystem, says Tom Wehmeyer, partner at Atomico. “The people who start a company today are more experienced and qualified than ever before.” Germany in particular is “extraordinarily strong in recycling talent,” the investor said.
For this year’s report, Atomico analyzed the resumes of thousands of founders vying for “mafia” membership. The term describes a network of former employees who have worked for startups and then successfully established themselves. The most famous example is the so-called PayPal Mafia: its members include Tesla boss Elon Musk, LinkedIn boss Reid Hoffman and Palantir creator Peter Thiel. Analysis results for Germany are available specifically for the capital.
German Unicorns Produce Over 1000 Founders
So the most successful mafia ex-startup factory of all time is Rocket Internet. Over the years, a total of about 400 founders have emerged from the workforce. These include, for example, Gorillas founder Kagan Sumner, who in less than two years has raised more than US$1 billion for his delivery service. Or Finn Age Hansel, founder of the largest German cannabis start-up, Sanity Group. Second only to Rocket Internet is the Zalando Mafia with 210 employees, who then founded a startup themselves. Interesting: The founder of Zalando himself belongs to the field of Rocket Internet. Delivery Hero, HelloFresh and N26 alumni also showed remarkable start-up activity.
Overall, the German unicorn produced over 1000 founders from its ranks, according to the results of the Atomico analysis. The unicorn thus contributed significantly to start-up activity in Germany. “Information is exchanged from one company generation to the next,” says investor Wehmeyer. Is. Equally valuable are the networks the employees established during this period. The increased trust in the new generation of founders is also evident in the capital markets.
According to data from Atomico, a third of the world’s early-stage funding rounds in 2021 (financing up to US$5 million) came from European startups – putting Europe on par with founding nation USA. Analysts at Atomico expect the current unicorn boom to have an even greater impact on start-up activity in the coming years.