Atomico’s latest report found that European tech investment is set to break the $100bn mark in 2021 – with Dublin performing strongly in the start-up space.
Europe’s tech industry has continued to show strong performance this year with record-breaking levels of investment, a growing number of unicorns and high levels of start-up activity comparable to the US.
This is according to VC firm Atomico’s latest annual report, State of European Tech 2021, published today (7 December). It found that European tech is creating value at its fastest pace ever, establishing the continent as a key global tech player with a focus on sectors such as clean energy and climate.
The report projects that European tech investment will break the $100bn mark for the first time in 2021 – more than twice the amount in 2020 (which already broke records) and 10 times the amount in Atomico’s first report six years ago.
Europe’s tech unicorn count has also shot up to 321, with 98 new additions to club this year, while the decacorn space of start-ups valued at more than $10bn has doubled to 26 companies in Europe. The report estimated the total value of the European tech ecosystem to have crossed $3trn.
‘The EU tech ecosystem is on fire. Five years ago, you could fit all of the continent’s unicorns in a dining room’
– JOHN COLLISON
Much of this growth has been led by VC funding. The report found an 88pc increase in VC confidence in European tech in the last 12 months, despite the ongoing pandemic.
“This report confirms what we’ve been seeing from our customers: the EU tech ecosystem is on fire. Five years ago, you could fit all of the continent’s unicorns in a dining room and decry Europe’s missing tech giants,” said John Collison, co-founder and president of Stripe. “Today, you’d need an auditorium with 321 seats, and you’d hear a completely different story.”
Individual funding rounds have also seen an increase in average value, with a considerable chunk of total investment value growth driven by rounds of more than $250m. But Atomico said that smaller funds of less than €25m continue to account for the largest volume of new funds closed.
Swedish battery maker Northvolt’s $2.75bn funding round in June was the highest on record in Europe this year, followed by the UK’s Cinch bagging $1.28bn and Sweden’s Klarna raising $1bn.
Dublin has come in at fourth place in the list of top European cities based on number of start-ups valued at more than $1bn per capita, beating Paris at number five and just behind Munich, London and Berlin in the top three spots.
Overall, progress is yet to be made in the stark gender disparity in European tech. Atomico said that 86pc of deals in 2021 across Europe were raised by all-men founding teams. It also highlighted that the ratio of women leaders to founders is incredibly low, but women make up nearly a third of the next generation of leaders operating in the European tech ecosystem.
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