Failed Startups in Europe
Analysis of European startup failures across the UK, Germany, France, Sweden & more. Regulatory challenges, slower scaling, and lessons for EU founders.
15+
Cases
$27B
Lost
70-80%
Fail Rate
Startup Ecosystem Overview
Europe's startup ecosystem has grown rapidly, with London, Berlin, Paris, Stockholm, and Amsterdam as key hubs. European startups raised $50B+ in 2024. The ecosystem benefits from strong technical talent and diverse markets but faces challenges from fragmented regulations, smaller individual markets, and risk-averse investor culture.
Failures by Industry
Cultural & Regulatory Factors
Fragmented Markets
Europe's 27+ markets each have different languages, regulations, and consumer preferences. Scaling across borders is significantly harder than in the US.
Regulatory Complexity
GDPR, PSD2, AI Act, and country-specific regulations create compliance burdens that US competitors don't face. This slows innovation but can also create protective moats.
Risk-Averse Capital
European VCs invest smaller rounds with more milestones. This creates more capital-efficient startups but can disadvantage them against US-funded competitors in winner-take-all markets.
Failed Startups (15)
Northvolt
Scaling & Execution Failure · Manufacturing battery cells at scale is extraordinarily hard. Even $13.8B couldn…
$13.8B
2016–2024
OneWeb
Capital Requirements & Starlink · Building a satellite internet constellation requires $10B+. OneWeb raised $3.4B …
$3.4B
2012–2020
Hopin
Post-Pandemic Demand Collapse · Virtual events exploded during COVID but demand evaporated when in-person return…
$1.6B
2019–2024
wefox
Growth at All Costs Failure · Europe's most-funded insurtech raised $1.6B at $4.5B valuation but couldn't achi…
$1.6B
2015–2024
Arrival
Unproven Microfactory Model · The "microfactory" concept for EV manufacturing was unproven at scale. Building …
$1.3B
2015–2024
Gorillas
Unsustainable Unit Economics · The fastest unicorn in German history ($1B in 9 months) collapsed in 3 years. Sp…
$1.3B
2020–2023
Babylon Health
Unsustainable Growth Model · AI-powered telehealth sounds revolutionary but healthcare is a low-margin, heavi…
$1.2B
2013–2023
Lilium
Technical & Regulatory Barriers · Building electric aircraft that take off vertically is extraordinarily hard. Eve…
$1B+
2015–2025
Flink
Unsustainable Unit Economics · Another quick commerce casualty: $750M couldn't make 10-minute grocery delivery …
$750M
2020–2024
Builder.ai
Fake AI & Financial Fraud · You can't fake AI automation with offshore human labor and inflate sales by 75%.…
$445M
2016–2025
Stability AI
Governance & Monetization · Open-source AI models generate goodwill but not revenue. CEO controversies and t…
$260M
2019–2024
Karhoo
Competitive Moat & Cash Burn · A ride-hailing aggregator that compares prices across Uber, Lyft, and local taxi…
$250M
2014–2016
Wonga
Regulatory Crackdown & Predatory Lending · Payday lending at 5,853% APR attracts massive regulatory backlash.…
$147M
2006–2018
Boo.com
Technology Ahead of Infrastructure · Building a 3D virtual dressing room in 1999 when most users had 56K modems was p…
$135M
1998–2000
BeReal
Feature Copied by Instagram · BeReal's "authentic photo" feature was copied by Instagram within months. Social…
$90M
2019–2024
Lessons for Europe Founders
- ✓Plan multi-market expansion from day one — single-country European markets are often too small
- ✓Use regulatory compliance as a competitive advantage rather than viewing it as a burden
- ✓Seek US funding for global ambition but maintain European capital efficiency
- ✓Build for the EU market first, then expand globally — don't try to be a US company from Europe
Frequently Asked Questions
What is the startup failure rate in Europe?
European startups fail at a rate of 70-80%, slightly lower than the US. The lower rate is partly due to more conservative capital allocation and stronger social safety nets that encourage more measured risk-taking.
What is the biggest European startup failure?
Wirecard (Germany) is the largest European startup scandal — a €24B market cap company that turned out to have €1.9B in fabricated revenue. Greensill Capital (UK, $3.5B+) and Lilium (Germany, $1B+) are other major failures.
Why is it harder to scale startups in Europe?
Fragmented markets (27+ countries, each with different regulations and languages), smaller individual market sizes, less available growth capital, and regulatory complexity (GDPR, country-specific rules) all slow European startup scaling.
Which European city has the best startup ecosystem?
London leads by total funding and exits, followed by Berlin (deep tech), Paris (AI/enterprise), Stockholm (consumer tech per capita), and Amsterdam (fintech/sustainability). Each has distinct strengths.