European tech startups break investment record and raise over $ 100 billion this year

European startups are expected to more than double the amount raised from investors this year to reach a new record of $ 100 billion. Venture capital firm Atomico’s annual report on the state of European technology shows how an explosion of mega-deals worth more than $ 100 million helped break record of $ 41 billion invested last year in startups on the continent.

While the number of $ 100 million fundraising rounds also more than doubled to 153, many startup founders interviewed for the report say it was more difficult to raise capital than last year. About $ 60 billion of the total invested in European startups this year has been through these mega-deals, while the capital paid to early-stage startups has only increased slightly.

The Atomico report highlights how the top ten deals with huge fundraisers from Swedish electric battery maker Northvolt and Klarna accounted for more than 10% of the total invested in startups on the continent this year. About half of this year’s biggest rounds were raised by fintech companies.

“It was a watershed moment in the evolution of the European technology ecosystem. We are creating more value faster than ever, ”says Tom Wehmeier, Atomico partner and head of research. “It took us decades to get our first trillion and it only happened in 2018 … and now we’ve passed $ 3 trillion and the last trillion has been added in the last eight months.”

Europe’s biggest startups appeared to have ignored the lingering impact of the pandemic with 98 new unicorns emerging this year while the number of startups valued at over $ 10 billion, or so-called decacorns, doubled to 26 “5 years ago, you could fit all the unicorns on the continent into a dining room and denounce the missing tech giants in Europe,” says John Collison, co-founder and president of Stripe in the report. “Today you would need a 321 seat auditorium and you would hear a whole different story. “

Although about a fifth of founders polled for the report said it had been more difficult to grow this year than last year, and that number rose to 26% women and non-white founders, the amount invested in early stage European startups is now close to equal. United States. This year, around 33% of global capital invested in rounds of less than $ 5 million went to European startups compared to 25% in 2015, while the share of American startups fell to 35% from 55% during the year. same period.

“When you look at early stage funding, Europe is now tied with the United States at one-third of global funding.

Investors also had a good year with Atomico recording $ 275 billion in exits and even with a flurry of PSPC activity across the Atlantic, Europe produced more IPOs than the United States this year. . Auto1’s $ 10.5 billion IPO was the biggest exit of the year for VC, but plenty more came from startups like Cazoo, Arrival and Babylon Health pursuing a merger with a company. American blank check for listing on a European stock exchange.

Unsurprisingly, the pandemic also appears to have brought about a radical change in the founders’ attitude towards remote working. About 50% of founders say relocating staff and being in a tech hub like London and Berlin close to investors was less important than last year. Zoom may have lifted some hurdles to connect founders with investors, but the report also points out that only 5% of venture capital funding over the past five years has gone to Central and Eastern European startups despite some success. notables like UIPath’s $ 35 billion NYSE listing in April. .

Mary I. Bruner