The countries and cities with the most fastest growing companies

29 June 2017 Consultancy.uk

An analysis of Europe’s fastest growing companies finds that despite Brexit, the UK remains Europe’s hot-spot for innovation and up-scaling, while IT & technology services and e-commerce are key breeding grounds for the next generation of progressive firms. Among these, HelloFresh, Codewise, Green IT Das Systemhaus, Brainlabs and Catapult Enterprises are Europe’s most impressive growers.

Rapidly-growing pioneer businesses were central to the recovery of the European economy in the 21st century, creating new opportunities for employment and sustaining strong competition across the continent’s markets. 

According to analysis by Consultancy.uk, based on data from The Financial Times and Statista, the top 1,000 fastest growing companies of Europe generate a combined revenue of €34.7 billion, with these newer market forces sharing a median age of 12 years old. The companies between 12 and 15 years old boasted an average growth of 490% between 2012-2015 (latest figures available), while Europe’s 1,000 fastest growing companies have a total staff nearing 136,000 people.

The 1000 fastest growing companies in Europe - Top 7 countries

While the total revenue among the top 1,000 is an impressive figure however, it is disproportionately spread among nations who already rank as some of the wealthiest in Europe. The top 5 countries for fast-growing companies generate a colossal 90% share of that figure, with total annual revenue between the UK, Germany, Spain, Sweden and France reaching €31.4 billion collectively. Adding number six and seven, Italy and Netherlands, here referred to as the ‘Big 7’, hold a 97% stranglehold on the fastest growing companies across the continent.

The UK, head and shoulders ahead of the rest, pulls in an annual total of €18 billion – more than half of all the top 1,000’s revenue – through its rapidly growing sector of innovative businesses. The quickly expanding companies of Britain are among the oldest in Europe, with an average age of 16 years in business equalled only by Belgium, and surpassed only by Austria with an average of 19 – though both host vastly fewer such companies, with Belgium home to just six, and Austria a mere two. Despite hosting one more of the fastest growing companies in Europe than the UK – Germany’s tally standing at 236 such groups – Europe’s largest economy languishes in a distant second in the rankings, with the fastest growing companies residing in Germany bringing in €6.6 billion in revenue per annum.

While the continent’s fifth largest economy, Spain, sees €2.2 billion revenues in the sector. Sweden, which was listed as Europe’s most competitive economy in the latest available data from the IMD World Competitive Rankings, benefitted from the €2.2 billion revenue generated by such innovative companies. Europe’s third largest economy, France meanwhile sees its own rapidly-growing business portion attract a similar €2 billion per year. Rounding off the Big 7, Europe’s next largest economy of Italy is boosted by €1.4 billion revenues that their expanding innovators bring in, while the Netherlands see €0.8 billion generated by its fastest growing companies.

The 1000 fastest growing companies in Europe - Rest of countries

The other 17 countries assessed together host just 6% of the fastest growing 1,000 companies in Europe – however even against this smaller portion of the market, they bring in a disproportionately smaller total revenue, a meagre 3% of the market share. Not surprisingly, of these remaining countries, as with the top 7, the majority of the wealth generated resides in the most affluent nations on the list.

Switzerland, which hosts three of the world’s five cities for millionaires density, hosts 13 of the fastest growing companies, with a revenue of €237.6 million per year, while Poland, the sixth largest economy in the EU which is expected to see accelerated growth of 3.3% in 2017 according to the World Bank, sees such businesses draw a similar €218.2 million. This, despite hosting fewer than half the number of fastest growing companies of Switzerland, at 6.

Concluding the top ten, the fastest growing businesses located in the Czech Republic bring in €154 million, spread across the four fastest companies it hosts. Other notable examples came from 11th ranked Ireland, where 9 such companies brought in €154.4 million in revenue, and growing Eastern-European economy Romania, whose 5 fastest growing businesses brought in €12.5 million.

Europe’s fastest growing companies

Among the top 25 fastest growing companies in Europe, only one company comes from outside the Big 7. The UK host ten, while Germany (6), Spain (4), Sweden (2), the Netherlands (1) and France (1) dominate the rest of the top growers.

The top 20 cities with fast growing companies

Europe’s fastest growing company is German start-up HelloFresh. The company, founded in 2011, utilises e-commerce to supply online food retailing, with the company posting revenue growth of 13,159% in the period analysed.

Codewise, the only company from outside the Big 7, meanwhile ranks second, with the 2011-founded e-commerce company based in Krakow, Poland narrowly missing top spot with 13,052% revenue growth. Dortmund-based Green IT Das Systemhaus is an IT systems consultancy established in 2012, and takes third place, with growth of 11,113%, while established in the same year, London-based Brainlabs recorded 8,218%. Completing the top five, fellow UK firm Catapult Enterprises shows growth of 7,510%.

In 6th and 7th Black Swan Data and Optal represent the United Kingdom, with the technology and FinTech firms founded in 2011 and 2005 respectively, while French management consultants Theano Advisors, founded 2012, have posted revenue growth of 5,758% in the period since. 9th placed Falcon Green Personnel recorded 5,587% growth in the same timeframe, with the support services firm ensuring 50% of the top ten growers are British-based. Rounding off the top ten, German energy firm Landwärme saw total revenues of €119 million.

Europe’s cities with the most fast growing companies

While the concentration of Europe’s fastest growing companies is disproportionately gathered around the continent’s wealthiest nations however, dispersion of top growing companies within larger countries is quite high. In total, the 1,000 are spread across 596 cities.

Of the 235 UK companies contained in the data, London is the indisputable number one with a total 78 companies on the list, making the British capital a hub for innovation and commerce in the EU even as the UK prepares to leave the block. London traditionally hoovers up the lion’s share of business in the country, for instance attracting more new retail brands in 2016 than any other European city, and while a number of other cities do host some of Europe’s top growers, only 9 other cities host three or more.

Bristol, Reading and Sheffield are each home to 5, while Edinburgh, Manchester and St Albans – whose council spent £1.2 million on consultants in 2016/17 – host 4 top growers. Britain’s second city Birmingham, Nottingham and Swindon each house 3 each.

Europe's fast growing companies - industry analysis

Beyond the UK and London however, the spread is much more even. The city with the second largest number of the fastest growing companies is Paris with 45 of the 139 France hosts – with a sizeable majority actually located outside the capital. Meanwhile, Italy’s capital of Rome, which placed 5th itself with 17 companies, was bettered by Milan, which hosts 34 of the nation’s total 186.

Berlin has the fourth greatest density of the businesses in question, with 32 of the 236 fast growing companies Germany hosts. Considering Berlin hosts less than half the number of London meanwhile, they have stronger revenue income in this regard. London’s 78 companies boast the highest revenue of any such city, however the rounded €4,4 million does not proportionally match the €3,8 million rounded revenue of Berlin’s 32 companies.

In terms of efficiency meanwhile, measured by looking at revenue per full time (FTE) equivalent employee productivity, unexpectedly perhaps the English city of Reading is booming, along with fellow Stockholm, Manchester, and Barcelona. The 5 companies listed in the Southern English town of Reading include innovative cloud service providers Fairsail, IT consulting and software company Ecrebo and energy and utilities pioneers Anesco, who each make use of potentially disruptive technologies to boost their business plans, along with banking and financial services firm Alpha FX and professional services provider Huntswood – also in industries where technological innovation is key to harnessing the coming boom in automated business

Similarly, Stockholm, which houses ten of the fastest growing companies is dominated by technology-based firms, with the most notable, online music-server Spotify, boasting an annual revenue of €1,945,332,000. Manchester, which has the third highest revenue/FTE rate listed, hosts companies significantly less technology-centred, with cloud service provision innovators UKFast the only one of the city’s four top growers to focus on it, while the final major FTE outlier Barcelona host FinTech company Innofis, IT hardware firm Woldsensing, Big Data and Analytics company Agile Content, among their 9 most rapidly growing groups – with such firms capitalising on innovative new technologies to themselves maximise efficiency, while working for others to do the same.

Europe's fastest growing companies

Industry analysis

In line with this, IT and software services account for 11% of the total top growing firms in Europe, followed by retailers on 9% – including e-commerce firms who in turn utilise modernised digital apparatus to boost productivity. Wholesale companies make up 8% of those listed, while construction and engineering registers a further 7%.

Advertising firms make up 6% meanwhile, though they are becoming attractive targets for the next most rapidly growing sector of audit and consulting firms on 5%. The recent up-turn in M&A activity that has seen professional services groups absorb design companies to access the lucrative market could see these numbers change in the near future.

Industry breakdown largest countries - top 8 sectors

108 of the top 100 fastest expanding companies in the continent are IT and software based, which have an average age of 8.9 years. Compared with retail, which has a lower number of companies at 91, but larger revenue growth of 694% to IT’s 452%, digital innovators have room to improve in their market performance.

However, retailers have on average been operating longer, with a median age of 20.6, while numerous forecasts of a coming squeeze on European retail resulting from e-commerce disruption, stagnating wages and Brexit could well see these positions reversed rapidly over the coming years. The gap in revenue/FTE between the two is currently as narrow as 20.7 for IT and software, to 21.1 for retail.

Beyond these general figures however, the mixture of booming markets by country differs drastically. Of the Big 7, the UK’s revenues from these fast growing companies are far more evenly distributed by comparison, the chart-topping €18 billion being split into sector chunks no larger than that of the gaming, betting and entertainment segment of 20%. Britain’s top growing firms, advertisers Brainlabs posted revenues of €13.6 million, and food and drink manufacturers Catapult enterprises which recorded over €12 million, however their respective sectors remained just 15% and 10% of the UK’s revenue from growing companies, meaning should a particular sector crash there will be the potential for substantial growth elsewhere, while if one like IT and software, currently on 13% of the UK sector’s revenue, booms, there are companies positions to further take advantage of it.

While in the short-term other nations are well-positioned meanwhile, many are heavily reliant on the long-term viability of certain segments. Germany, Sweden and the Netherlands are each dominated by a sector that makes up well over half of the revenue of their fastest growing businesses. Of the revenue generated by German companies listed in the top 1,000, 71% comes from retail, along with 92% in the Dutch sector. Sweden meanwhile sees a colossal 97% of its top growers’ income supplied by the entertainment sector.

The 25 fastest growing companies in Europe

Sweden’s top-heavy revenue spread is largely due to the size of the anomalous Spotify as mentioned earlier, with nearest competitors G5 Games also operating in the entertainment sector, with the video game firm posting annual revenues of over €41 million. Meanwhile in Germany Zalando, along with fellow online retailers Hello Fresh, contribute a rounded €2,958 million and €305 million in revenue respectively, and in the Netherlands, e-commerce retailers Coolblue’s revenues of €554.7 million similarly inflate the retail segment in that respective country.

Startups and scale-ups

Of course many older companies are also present in the data from the Financial Times and Statista, many of which have seen explosive growth. The UK hosts three of note, Broadway Travel having grown at a rate of 136% to hit revenues exceeding €212 million, while manufacturers Kent Brushes saw their revenue hit €9.4 million after growth of 83%, and engineering firm Talley posted revenues that had grown 68% to €32.2 million.

The companies, established in 1948, 1777 and 1953 respectively, were the top performers among the oldest companies in the data – a grouping topped by Vey Versogungstechnik, a Cologne-based construction firm founded in 1955, which saw the employer of 32 staff record staggering growth of 179%, as revenue hit £7.1 million. Other ‘old’ companies that managed to book explosive growth include Labatec Pharma (based in Geneva), Cartonnerie Moderne (based in Entraigues sur la Sorgue in France) and PSN (based in Madrid, Spain).

Fastest growing companies - startups and scale-ups

Consultany.uk further analysed the data regarding companies from four up to eight years old, to search for trends in up-scaling among start-ups. Younger companies averaged higher rates of growth generally. However, the average revenue per company showed that older companies fared better, with the 106 companies sampled at eight years old averaging revenues of €27.6 million.

Despite their peaking levels of growth, still an impressive 393%, being much lower than younger companies, both four (2,268% growth) and five (1,391% growth) year old companies averaged a lower €8.7 million in revenue per company.

According to a recent report from the World Economic Forum and EY, fast growing companies typically leverage simple business models.

Related: An overview of European unicorns, UK and Sweden lead the pack.

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