The tech sector in Europe started to rise. Start-ups are on track to bring in a record of $120 billion in funding this year. According to a report from venture capital company Atomico, it is roughly three times the $40 billion of capital raised last year.
It happened for the first time for European start-ups to raise over $110 billion in a year. It also highlights investors’ growing interest in the region’s evolving tech industry.
Atomico’s head of insights, Tom Wehmeier, told CNBC that this year would define the future of European tech. He added that in his opinion, these numbers suggest that European tech is generating value faster than ever anticipated.
Based on conclusions from the company Dealroom, Atomico’s latest annual report shows that the total investment value of European tech companies in private and public markets exceeded $3.5 trillion for the first time this year.
Wehmeier said that it took several decades to get to the first trillion in value in the tech industry from Europe.
Europe is now home to more than 322 billion-dollar companies, 99 of which gained huge profits this year. According to Atomico, there are also 27 smaller companies worth more than $10 billion, including Revolut, Klarna, and Checkout.com.
Wehmeier said that Tech start-ups had increased adoption of online services during the current pandemic.
Flywheel effect
According to Wehmeier, Europe’s tech sector keeps gaining momentum due to applying experience from previous success stories into new experiments.
This year, European tech company exits produced a combined $276 billion worth of industry value.
Another critical growth driver for start-ups in Europe was the rising demand from big international investment companies such as SoftBank, Tiger Global, and Coatue.
Balderton Capital positioned approximately $1.4 billion for a couple of new funds. While Atomico raised around $1.3 billion to invest in European tech companies this year.
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