After two-year boom in startups, sentiment declines

After the boom in startups in the last two years, sentiment has turned negative in the second half of the year with several companies lowering valuations and cutting jobs in a bid to find a path to profit.

More than 20 startups were created by each of those companies, helmed by former employees.

More than 10 companies have been created by former employees from each of the newer startups like Babylon, Celonis, iZettle and SumUp.

The pace of investment was very high last year. Harry Nelis, partner at Accel, said that has gone down dramatically.

There will be fewer deals, fewer transactions taking place in a time of transition, but once the new level is found, I think things will pick up quite a bit, he said.

Stockholm had the highest per capita number of startups with employees of 27 unicorns forming 168 startups while London saw the most number of startups being created with employees of 27 unicorns.

Unicorns tend to create more rounded founders than large organizations like the tech behemoths because people have a better training ground for entrepreneurial activity, Nelis said.

He said that employees in a startup tend to get access to many different functions, from engineering to sales, giving them exposure to different parts of the business.