AI startups are reaching $1 billion valuations at a faster pace

Artificial intelligence is speeding up the creation of billion-dollar startups in Europe and Israel, according to new analysis from venture capital firm Accel. The findings, reported by Fortune and produced with Dealroom and Revelio Labs, point to a faster funding cycle and a changing profile for startup founders.

Among 86 companies in Europe and Israel that became unicorns from 2023 onward, 20% reached a valuation of at least $1 billion within two years of being founded, Accel found. Before the generative AI boom, that share was 5%, according to the analysis.

Nearly one-third of the newer unicorns reached that valuation within three years or less, compared with 12% previously, Accel said. The number of especially fast-growing unicorns has quadrupled since 2023, according to the firm.

AI shortens the path to scale

Fortune reported that the broader AI funding boom has produced private-market valuations far above recent historical norms. Anthropic, founded in 2021, raised $65 billion at a $965 billion valuation in May, overtaking OpenAI, which had closed a $122 billion round at an $852 billion valuation weeks earlier, according to Fortune.

Matt Robinson, an Accel partner and co-founder of GoCardless, told Fortune that AI can be applied across many industries, which helps companies show value more quickly. He said that clearer value can shorten sales cycles, increase contract sizes and reduce the time between investment rounds.

Robinson said the first AI company to address a market well can quickly become the company rivals must chase, whether the field is coding, legal work, customer support or another software category. That dynamic is adding pressure on founders to move quickly, he said.

AI is also changing how startups operate internally, according to Fortune. Companies using their own AI tools can run with smaller teams and lower costs, while automating tasks such as software development, sales outreach and marketing.

Zhenya Loginov, another Accel partner, described the stronger AI-era founder as a “tinkerer,” Fortune reported: someone who tests new tools constantly and pushes the same habits across the company. Robinson said top teams are building on existing AI systems and using multiple coding agents at once, compressing work that once took months into days.

Founder backgrounds are shifting

Accel’s analysis also found a marked change in who is launching Europe’s newest unicorns. Founders of post-2023 unicorns are twice as likely to have worked at Big Tech companies as earlier founders, at 23% compared with 11%, according to the data.

The share of founders with doctorates has doubled to 18% from 9%, Accel found. Academic founders have also doubled, rising to 23% from 12%.

Microsoft and Alphabet have passed Boston Consulting Group and McKinsey as the most common feeder organizations for founders in the group, according to Fortune’s account of the analysis. Loginov said the shift reflects a more developed European tech sector and the growth of major technology campuses in London, Paris and Zurich.

Accel’s report tied the rise in PhD founders to AI-driven progress in areas such as robotics, cybersecurity and autonomous software. Those fields often draw founders from universities and research labs, and the potential markets can be large, the report said.

Anton Osika, co-founder and CEO of Lovable, told Fortune that AI has opened the software economy to more people than before. Lovable reached $500 million in annual recurring revenue faster than any prior European tech company, according to Fortune.

Osika also said Big Tech workers are moving to Europe to join companies including his own. “It’s clear that a lot of top talent is moving here,” he told Fortune.

This story draws on original reporting from Fortune.