Daily Management Review

Nearly A Record $41 Billion Investment Notched Up By Resilient European Tech Startups


Nearly A Record $41 Billion Investment Notched Up By Resilient European Tech Startups
The economic shock of the novel coronavirus pandemic outbreak has been mostly overcome by European tech startup investment, according to venture capital firm Atomico, which also forecast that the sector was set to see record investments in the current year.
In September, a monthly record of $5 billion was reported for venture investments in the resilient tech sector in Europe as it rebounded from the pandemic hit which has now set the industry in a position to reach a high of $41 billion for 2020, forecast the study that was released on Tuesday.
“It’s a remarkable sign of the resilience of the ecosystem,” Tom Wehmeier, co-author of Atomico’s report, told the media.
The total valuation of the tech companies founded in Europe since 2000 has touched almost $1 trillion and is comprised of 115 venture capital-backed ‘unicorns’ that each has a valuation of more than $1 billion.
With valuations at the stock market of more than $50 billion each, the list of European tech startups is headed by the music streaming service Spotify and payments firm Adyen. These two companies are also in the top 10 list of tech companies of Europe,
Valuations of more than above $10 billion, even while remaining in private ownership, has been achieved by Swedish ‘fintech’ Klarna and Romanian robotic software firm UiPath. This reflects the increasing depth of the venture capital industry of Europe, noted analysts.
In terms of dollars invested, Europe still is well behind North America by five to one. However, according to the estimates of Atomico, over the last five years, there has been a threefold growth in the amount of institutional money flowing into venture capital.
A network of more than 3,000 founders of new companies has been created by the 24 biggest tech firms of Europe, estimated Atomico.
During the pandemic crisis, health tech has emerged as a winner as this sector has been able to attract a record $3.2 billion in just the first nine months of the year. Also attracting significant amounts of venture capital are the segments of enterprise software and fintech.
According to data platform Dealroom.co, the tag of being fastest European company to go past a $1 billion valuation was recently snatched by the online events platform Hopin as the company managed to achieve this feat within just 17 months of its formation.
And even though the pandemic has hit the travel industry, including the travel tech sector, fresh funds from investors have been obtained by Berlin startups GetYourGuide and Omio as investors believed that the sector segment will to do well once the pandemic was over.
Till October this year, 32 initial public offerings by technology firms were launched in Europe among which only three were valued above $1 billion which was lower than the outsized tech IPOs in the United States.