$100 billion of capital invested in European companies, new State of European Tech report reveals…

Atomico State of European Tech

Europe is firmly positioned as a global tech player in 2021, with a record $100 billion of capital invested, 98 new unicorns, and the strongest ever start-up pipeline, now on par with the United States.

The number of decacorns (those companies worth more than $10 billion), also doubled in size. 26 European companies now hold that status, including Banbury-based EV business Arrival,

That’s according to a new report The State of European Tech, published today by venture capital company Atomico.

European tech is creating value at its fastest pace, adding $1 trillion in just eight months. While geographical differences in maturity level remain, talent mobility and distributed success is powering newer hubs.

After a slight dip in Q2 and Q3 of 2020, levels of investment have accelerated since the start of 2021. European technology has made up for lost time. Most notably, the report reveals 50 per cent growth in Q2 of 2021 alone.

And while the UK tops the list (During the first nine months of 2021 alone, there have been 68 investment rounds of $100M+ in the UK), Germany, France, Sweden, the Netherlands and Spain have all set new records before the year even finished. Outside of the top six countries, there has also been an explosion of $100M+ rounds; the number of these rounds outside the highlighted countries has hit 35 for the year to date, up seven times over the past five years.

On a cumulative basis over the past five years, the total amount of capital invested in UK tech companies has nearly reached $75 billion. This is more than double the amount of capital invested in the second and third largest countries; Germany and France.

Europe has its strongest startup pipeline ever, now on par with the US, the report goes on to say.

Early stage funding is a leading indicator of future growth. Europe’s early-stage ecosystem is on equal footing with the United States. European start-ups account for 33 per cent of all capital invested globally in rounds of up to $5 Million, compared to 35 per cent for the United States.

US investors are now participants in more than one quarter of all investment rounds in Europe, up from just 16 per cent in 2017. Their presence in the market is helping to fuel the growth of European tech, build bridges across continents, and level up the strength of the investor base by bringing different experiences, networks and support.

The five largest hubs by total capital invested (London, Berlin, Stockholm, Munich and Paris) are home to companies that between them captured 54 per cent of total investment into the region in 2021, up from 49 per cent in 2017.

Almost one-fifth of founders say it has become harder to raise capital in 2021, while a further 40 per cent or so believe the environment remains unchanged from the past year, which itself was a year that saw a record number of founders responding that fundraising had become harder.

Gerard Grech, Founding CEO of Tech Nation, said: “The new Atomico State of European Tech Report out today reminds us of what a fantastic year this has been for European Tech. With funding tripling and almost 100 new tech unicorns created, we are truly entering a golden decade. And the UK is leading the way with over 100 unicorns overall, cementing the UK’s position as third globally for investment, behind only the US and China.

“Crucially, the success of the sector means economic growth, greater employment opportunities, and new innovative solutions to some of the greatest social, economic and environmental challenges of our lifetime, including helping the UK reach Net Zero by 2050. I look forward to another turbocharged year of growth for tech in 2022.”