The Big Startup Studio Study

Part 1: Number Crunching

A detailed look at 51 startup studios & 212 portfolio companies…Basics, Performance, Funding, Exits, Leaderboards.

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  TL;DRThe goal of this study is to find out how startup studios and their portfolio companies do? Is this model the next big thing in venture building? To find out, I looked at CrunchBase

and MatterMark data of 51 studios and 212 of their portfolio companies. Here is what I found:

Studios create more and more companies, +15% year over year.+15% y/y

Since 2008, studio companies raised more than $4B.$4B

Funding into studio co-s steadily increases since 2010.+48% y/y

Number of studio related exits is on the rise since 2012.14 exits

The average company age at exit is 3 years.3 year

The companies I examined employ a total of 15,9k people.15,9k

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  Startup Studio BasicsA startup studio (a.k.a. venture builder, startup factory) is basically a startup that attempts to build multiple startups in parallel.The basic recipe is:• Take a core team & entrepreneurs in residence;• Add a shared infrastructure & in-house funding;• Generate ideas internally;• Build multiple startups in parallel;• Trash what doesn’t work, reassign team;• What works spin off and get follow on funding;• Grow. Exit. Repeat.

The promise / potential:• Faster start & lower build time;• Ideal to boost underdeveloped ecosystems;• If a startup fails, team is reassigned, they don’t scatter;• Better terms for investors (more equity & control).The concern / prejudice:• Cap tables make follow on funding impossible;• Startups within a studio have to fight for resources;• Studios are copy-cats, only good for ecommerce;• Less motivation, passion from founders & team.

Core Team & EIR-s

Infra & funding

Ideas

Build startups Works?

TrashNo

Reassign Team

Yes

Dedicated team

Spin-off

Follow on funding

Grow EXIT

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Most studios are located in Germany, UK, USAThere is plenty of room for new, emerging players

(Asia, Africa, South America, Eastern & South Europe…)

Location of studios

Figure 2: Location of studios (created via mapsdata.co.uk)

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  Nr of new studios is plummeting, but for how long?

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1996 2002 2005 2008 2010 2012 2014

United  StatesGermanyUnited  KingdomBelgiumChinaItalyNetherlandsArgenCnaCanadaDenmarkFranceHungaryIndonesiaPortugalRussiaSouth  AfricaSwitzerland

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Figure 3: Nr of studios founded per year and per country

• There was a boom of new studios between 2010 – 2013, since then things cooled down, it might seem. At this moment, I can only speculate, why. Maybe we’ve reached some kind of plateau of disillusionment? The rest of the slides might shed a light on it.

• Most companies are born in the US, the oldest one being Idealab, founded in 1996. Followed by New Mexico Angels Factory founded in 1999, focusing on bringing University and National Lab technologies to market.

• The youngest one in the list is Boot Ventures from Belgium, founded in 2015.

• Low 2015 numbers are likely because new studios are not yet registered in CrunchBase in such early stage, so there is a latency in availability of data.

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Location of portfolio companies

Figure 4: Location of portfolio companies (created via mapsdata.co.uk)

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  Output  of  studios  grows  +15%  year  over  year  since  2011

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United  StatesGermanyUnited  KingdomBelgiumRussiaIndonesiaPortugalArgenCnaChinaNetherlandsCanadaHungaryItalySouth-­‐AfricaSwitzerlandDenmarkFrance

• Since 2011 year over year there are 15% more companies founded by startup studios

• US and German studios provide a steady output of companies, while output of other countries is occasional for now

• Low 2015 numbers are most likely because studios don’t register their projects into CrunchBase in such early stage, so there is a latency in availability of data.

+15%

Figure 5: Nr of companies founded per year and per country

Nr o

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Investments are on the rise, Rocket Internet dominates

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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Total  fundingWithout  Rocket  I.

Rocket Internet related companies take 65% of all startup studio related funding between 2008 – 2015 H1.

Even so, investments into studio companies steadily increases with around 48% every year since 2011.

Figure 13: Money invested into studio companies

Amou

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vest

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0

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2011 2012 2013 2014 2015

  Nr of exits is on the rise

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Nr of studio exits is steadily increasing.

Acquirers seem to favor B2C, Mobile, Media, Hospitality companies. But take this with a pinch of salt, there are very few data points.

I’ll try to gather more details about exits until Part 3 of the Study.

If you have any information about these deals, please get in touch.

For now, what we can see is, that startup studios are dishing out more and more companies and VC-s invest more and more money.

Let’s hope that this thin red line continues, and that it will draw out a nice hockey stick ☺

Figure 16: Word cloud of exited co-s market & category data

Figure 17: Nr of exits per year

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  This is a teaser version.

Get the full report at gum.co/sssp1

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What you will get: List of 51 studios and 212 portfolio companies Overview of verticals and models List of exited companies Performance indicators More details on funding Employment statistics

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  About

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• Ex-Project Manager @ IBM & Citigroup• Startup Sauna alumni• Joins Drukka.com Startup Studio in 2015• CEO of Firmpalace.com

Attila Szigeti Drukka Startup Studio

• Since 2011, HQ in Budapest• Headcount 20+• 4 active startups• 5 more under initialization

Firmpalace.com

• A one stop shop for setting up your international company

• We connect you to the best legal, tax, accounting experts

• Started in 2015

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