The UK is generally considered the leader in Europe when it comes to building billion-dollar startups (usually referred to as “unicorn startups”), with nearly a third of all European billion dollar startups calling Britain their home. At Beauhurst, we are currently tracking 14 companies that are both genuine private startups and have reached a $1b valuation. There’s been a huge amount of media interest in these businesses, particularly during London Tech Week‘s sixth annual festival in the capital. We’ve analysed the UK’s startup scene to try and identify the British startups that could be next in line for a $1b valuation. Here is our unicorn watch list:
Note: $1b roughly exchanges to £789m, as of June 2019
2019 Unicorn Watch List
bulb
Last September, we used Bulb Energy as part of an energy retail competitor analysis to help value Ovo Energy, for whom no public valuation was readily available. We predicted they should in theory be very close to a $1b valuation, which was validated just a few months later when Ovo raised a sizeable growth stage funding round from the Mitsubishi Corporation.
Bulb, a close competitor, should be hot on Ovo’s heels. Company filings indicate their valuation has grown rapidly from £1.4m in October 2016 to £350m in June 2018. In July 2017, they were valued at £50m. If we extrapolate that growth rate (growing by 700% over a year) Bulb should have already reached a $1b valuation. Indeed, Bulb recently topped SyndicateRoom’s Top 100 report on the UK’s fastest-growing businesses, which Beauhurst supplied data for.
It’s also very possible that growth rates have slowed as Bulb has filled out its niche in the UK energy market, and come up against competitors such as Ovo. That said, they recently announced they were launching in several other markets internationally: Texas, France and Spain. These jurisdictions suit Bulb for two main reasons: they have liberalised energy markets (i.e. energy retailers can compete with one another to supply energy to people’s homes) and a significant number of renewable electricity producers (Bulb’s electricity supply is sourced entirely from solar, wind and hydro).
If a $1b valuation is announced, this will make Bulb the UK’s first green unicorn.
worldremit
Second up on our unicorn watch list is WorldRemit. Last year, we included WorldRemit’s founder Catherine Wines in a piece on some of the UK’s leading female fintech entrepreneurs. A close competitor to Transferwise, one of the UK’s most successful startups that reached a $1b valuation several years ago, WorldRemit operates in the remittance market, helping immigrants transfer pay back to their native jurisdictions. Usually banks handle this, charging a high service fee. WorldRemit has developed a web-based platform for these ends, charging a much lower fee.
Earlier this month they were valued at $900m, taking them close to the coveted $1b threshold. It remains to be seen whether they undertake another funding round and reach a unicorn startup valuation before they IPO on a public stock exchange.
cmr surgical
CMR Surgical is a surgical robotics company hailing from Cambridge’s thriving tech ecosystem. Company filings released at the time of their funding rounds suggest their valuation grew from £80m in 2017 to £225m in 2018. If this growth rate continues, their valuation could be very close to the £789m ($1b) mark by the end of 2019. Along with Bulb they featured on Syndicateroom’s report of Britain’s fastest-growing businesses, suggesting this growth has continued.
CMR Surgical has developed a next generation robotic system for use in laparoscopy, otherwise known as keyhole surgery. The use of robotic arms can allow for a higher degree of precision during these operations, and CMR Surgical’s marketing promo suggests their systems have improved on existing technology by a considerable margin.
sumup
Rumours abound that SumUp reached a $1b valuation at the end of 2018. However, we have been unable to verify whether this has genuinely occurred, either via company filings (this company is registered in Luxembourg) or from a reputable media source.
That said, this milestone should be close for SumUp – turnover grew from just £1m in 2014 to £24m in 2017, and they’ve been turning a profit for several years (which is exceedingly rare for an eight year-old startup). SumUp’s product is a neat, easy-to-handle card reader that connects to your smartphone or to a web-based account via 3G or Bluetooth, allowing merchants to easily process payments. SumUp doesn’t require merchants to enter into a contract like other card reader providers, instead taking a 1.67% slice from every payment that is processed through one of their readers.
Their backers include large financial corporates such as BBVA and American Express, alongside more specialist venture capital investors. This young company has already carried out two acquisitions in Europe, with Germany’s Payleven and Poland’s Shoplo.
zopa
Last up on our unicorn watch list is Zopa, which appears to be the UK’s fastest growing P2P lending platform. Company filings indicate that its valuation almost doubled from £215m in 2017 to £400m in 2018. Again, if this growth continues, it looks as though Zopa could feasibly reach a £789m valuation by the end of 2019.
Essentially, Zopa’s product consists of a web platform which connects those looking to borrow money with those looking to lend. Lenders invest money into the platform, which is then lent out to borrowers. Each lender’s money is spread across many borrowers, spreading (and therefore much reducing) the risk of defaults across a wide number of borrowers.
Like SumUp, Zopa has already achieved scaleup status, with turnover rising rapidly from £11m in 2014 to almost £50m in 2017, when it also managed to turn a small profit. The company has won places on several prestigious high-growth lists, including the FT 1000, and Fast Track’s Tech 100.
paymentsense
PaymentSense’s founder George Karibian recently featured on our list of the UK’s leading serial entrepreneurs. In this post, we highlighted the rapid success of each of his startups, of which PaymentSense is the leader. Founded in 2009, the company has already started to earn impressive amounts of cash, with operating profits growing from -£70k in 2015 to £18m in 2018.
Such rapid success means that since 2015 the company hasn’t needed to raise cash from venture capital investors. As such, they haven’t received a public valuation for quite some time. However, the company received a £50m valuation in 2014, when they were still in a pre-profit stage. Presumably, that valuation has now ballooned, if not to £$1billion, then to something close to this figure.
A direct competitor to SumUp, PaymentSense provides card reader machines to merchants, including traditional countertop readers, and portable card machines designed for mobile merchants such as door-to-door salespeople. They’ve also developed virtual payment portals, allowing merchants to send invoices via phone calls, emails, or websites.
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