This report expands on research we conducted for the European Commission Directorate General for Research & Innovation to explore the most recent trends in transatlantic dynamics of European startups. Specifically, we aim to shed light on the growing phenomenon of “dual companies”. These are startups formed in Europe that move their headquarters abroad, while maintaining a strong operational presence (such as R&D activities) in their home country. Rather than so-called “unicorns,” they look more like hydra, the multi-headed mythological animal; one head is abroad, while another remains in Europe with most of the body.

Dual companies comprise a meaningful percentage of European scaleups – approximately 14% of European scaleups, according to our analysis. The US is the most common destination for European dual companies; with 82% relocating their headquarters to the US. Among them, more than half chose Silicon Valley. Only 14% of dual companies moved their headquarters to another European country. In those instances, the UK – specifically London – was the most frequent destination.International expansion materially impacts European scaleups’ ability to raise capital. Our data confirms that dual companies raise 30% more capital on average than companies following a purely domestic growth path.

Dual companies are most common in younger startup ecosystems and smaller countries where startups are often forced at an early stage to look abroad for market growth and funding opportunities. Along with numbers, we have conducted interviews with many founders and heads of companies following this model, and include their reasons for expansion in the report.