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World NewsEuropean start-up funding tops $100 billion for first time: Atomico

European start-up funding tops $100 billion for first time: Atomico

A 3D map displaying the continent of Europe.

Constantine Johnny | Moment | Getty Images

LONDON — Europe’s tech sector is on hearth. 

Start-ups within the area are on observe to haul in a report $121 billion in funding this 12 months, based on a report from enterprise capital agency Atomico, roughly thrice the $41 billion of capital raised in 2020.

It’s the first time European start-ups have raised greater than $100 billion in a single 12 months, and highlights surging curiosity from buyers within the continent’s rapidly-growing tech business.

“It’s been a defining year for European tech,” Tom Wehmeier, Atomico’s head of insights, advised CNBC. “I think what we’ve seen in the numbers is that European tech is creating value faster than ever.”

Based on findings from knowledge agency Dealroom, Atomico’s newest annual “State of European Tech Report” reveals that whole fairness worth of European tech corporations in the private and non-private markets surpassed $3 trillion for the first time in 2021.

“It took us decades to get to the first trillion in equity value in technology from Europe,” Wehmeier stated.

“We got to that milestone only three years ago, in December 2018. And then we went from $1 trillion to $2 trillion in 24 months, and then this year, the most recent trillion has been added in eight months.”

Europe is now residence to 321 billion-dollar “unicorn” corporations, 98 of which have been minted this 12 months. There are additionally 26 so-called “decacorns” value $10 billion or extra, together with Klarna, Revolut and Checkout.com, based on Atomico.

Tech start-ups have been a significant beneficiary of the elevated adoption of on-line companies throughout the coronavirus pandemic, Wehmeier stated.

Flywheel impact

Europe’s tech sector is gaining momentum partially because of a “recycling” of expertise from prior success tales into new ventures, based on Wehmeier.

“People from one generation of companies are moving on to become the next generation, whether it’s as founders, as builders, or as investors,” he stated.

Challenges forward

Not all is rosy in European tech, nevertheless.

Despite venture-backed corporations elevating report ranges of funding in Europe, early-stage companies are being squeezed, based on Atomico.

Less than 1% of enterprise capital invested within the first 9 months of 2021 went to corporations that have been based this 12 months, a determine that has usually ranged from 1-3% in earlier years.

Meanwhile, variety stays a key concern. Only 1.3% of enterprise capital funding in Europe goes to start-ups with ethnic minority founding groups, Atomico stated, citing a survey of greater than 5,000 tech professionals within the area.

Another hurdle for Europe to beat is the dearth of pension fund allocation to start-up investments, Wehmeier stated, with European pension funds earmarking lower than 0.02% of their $3 trillion for enterprise capital funds.


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