Menlo Electric, a Polish supplier of photovoltaic panels, has topped the 2025 FT1000 ranking of Europe’s Fastest Growing Companies.
The Warsaw-based wholesaler, which sells mostly Chinese-made panels and solar equipment, achieved a compound annual growth rate (CAGR) of 830.8 per cent from 2020 to 2023.
Despite sluggish European economic growth after the pandemic and inflation shock caused by Russia’s invasion of Ukraine, the FT1000 highlights impressive performances by often young companies in sectors across the economy, from technology to marketing.
Menlo Electric took advantage of the EU’s rapid adoption of renewable energy, importing Chinese modules, and is now expanding into new markets to mitigate against a supply glut. But European manufacturers of renewables also feature in the ninth annual list. Eighth-placed Kempower of Finland, which makes electric vehicle chargers, has a CAGR of 343.5 per cent.
The IT and software category contributes a fifth of the FT1000 companies, up to 200 from 189 in the 2024 ranking. But construction and engineering; energy and utilities; advertising and marketing; and fintech, financial services and insurance account for another third of the list.
Mark Hart, a professor at the University of Warwick Business School and deputy director of the UK’s Enterprise Research Centre think-tank, says the list echoes academic research that companies in all sectors can grow fast. “We mainly talk about scale-ups as young tech firms,” he observes. “This survey shows that is utter nonsense. It is happening across sectors, from wholesale, engineering and management consultants.”
The biggest countries — Italy, Germany, France and the UK — are home to more than three quarters of the FT1000 companies. Niclas Poitiers, a research fellow at think-tank Bruegel, says it is inevitable that those with bigger markets will dominate the list given the imperfections in the EU’s single market. An Estonian business, for example, would have to launch into new countries, with differing regulations, sooner than a German one.
The European Commission has promised to establish a new EU-wide regulation system for certain fast-growing, innovative companies, which could help, he says. The so-called “28th regime” would also make it easier for innovative companies to raise capital. “It would offer reassurance for outside investors,” he adds.
Reports last year from former Italian prime ministers Enrico Letta and Mario Draghi set out challenges faced by EU businesses in achieving growth as fast as their US and Chinese competitors. Besides regulatory barriers, he identified a gap of 1.5 per cent of GDP between private investment in the US and the EU, excluding construction.
Draghi urged EU governments to overcome their differences and create a long-delayed capital markets union, by agreeing joint supervision and easing cross-border investment. The transatlantic gap in venture capital was even bigger. According to data provider PitchBook the EU attracted €56.7bn in 2023, a fifth of the US level.
Eurochambres, which represents European chambers of commerce, argues that the EU must find ways to retain fast growing companies for longer. Vladimir Dlouhý, president, points out that the large majority of the top 100 businesses in the ranking were founded in the past decade.
“This reinforces concerns . . . that innovative European companies seeking to scale up tend after a few years to relocate to other economies, notably the USA, to capitalise on greater economies of scale and financing opportunities,” he says. This underlines the need to tackle market fragmentation in Europe, not least by addressing barriers in the single market, and to create a capital markets union, he adds. The EU must become not just “a great location to start up a company, but also to scale it up”.
However, market size and economic growth are not the only determinants of success. Spain and Portugal account for just 1.6 per cent of the FT1000, although they are home to more than 10 per cent of the population of the countries included: the EU plus the UK, Norway, Iceland, Bosnia, Switzerland and Liechtenstein. That is barely more companies than the three Baltic states, with 6mn people.
Entrepreneurs have long complained about levels of regulation and taxes in the EU compared with the US. Brussels has promised to cut red tape by 25 per cent in the next few years.
But there are positive sides to Europe’s social model, according to a founder of one FT1000 company. Jason Modemann and Patrick Brüch dropped out of university in 2018 to launch Mawave Marketing. The Munich-based company uses social media to help advertisers hook younger customers and works with Red Bull, Vodafone and others.
“The consumers of tomorrow were already on social media but the brands didn’t really understand it,” says Modemann, 27. “There was a big gap between consumer behaviour and brands that were looking for time with consumers.”
Immediately profitable, Mawave now has 130 employees and has never had to raise outside capital. It had revenue of €6.53mn in 2023 and CAGR of 132.2 per cent from 2020 to 2023, slowing as the company matures.
Despite criticism from the US of tougher EU tech regulations, Modemann says companies can adapt. “We just need to develop faster than these political changes appear. I think that’s something that’s really fuelled our business in the past,” he says.
Europe has good infrastructure, skilled workers and a safety net, he adds. “I think just to drop out of university and start a business would not be possible anywhere else. Because we have such a good social welfare system . . . we knew even if it didn’t work out, we could just go back to university. Even if we failed completely, our state would look after us. And I think that’s a really good environment.”
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