Funding for European technology companies will plunge by nearly half this year, as US investors increasingly abandon the continent amid a global retreat by venture capital investors.The amount of money raised by tech start-ups in Europe is expected to reach about $45bn over 2023, according to an annual report compiled by London-based venture capital group Atomico. That is down from $82bn last year.Venture capital investment has fallen around the world since the pandemic, as rising interest rates hammer the valuations of public technology stocks and push investors to increasingly focus on generating profits.Atomico partner and head of intelligence Tom Wehmeier said investment in European tech companies remained 18 per cent higher than in 2020, while other regions were lower compared with pre-pandemic levels.“The European tech environment looks more stable now than at any point since the pandemic,” he said. “We see that bringing back certainty, a bit more predictability and helping restore confidence.”One reason for the shortfall this year was due to reduced funding from US investors.
For deals involving relatively advanced European start-ups seeking “growth stage” funding, the share of capital from US investors has fallen from 39 per cent in 2021 to 25 per cent this year. So-called crossover investors, many of which are US funds, often participate in late-stage deals but this activity has ground to a near halt.Venture capital investment in the US continues to dwarf spending in Europe, with nearly triple the level of tech investment this year, according to the Atomico report. China and the rest of the world will each have equivalent levels to Europe.One bright spot has been the proliferation of massive fundraising deals for artificial intelligence companies. European start-ups such as France’s Mistral and Germany’s Aleph Alpha are raising among the largest financing rounds of the year, raising up to €400mn and $500mn respectively this year.
Of the 36 European tech deals worth more than $100mn this year, 11 of them were AI companies. The US had 37 such AI deals over the same timeframe.“We see AI being the top theme in terms of number of investment rounds being raised at the early stages,” Wehmeier said.Large fundraising rounds have been few and far between in Europe this year, after the likes of financial technology start-ups Revolut and Klarna raised hundreds of millions of dollars in funding rounds during the pandemic boom.Some start-ups that have tapped investors this year needed to do so at substantially lower valuations. In September, Turkish grocery delivery start-up Getir raised $500mn at a $2.5bn valuation, a quarter of what it was worth just 18 months prior.While larger deals have declined, “early stage” or “seed” deals have remained relatively active as investors focus on smaller bets.Earlier-stage companies have also seen their valuations remain more resilient than more mature start-ups. While start-up valuations have settled back to long-term averages after rising during the pandemic, that correction hasn’t affected seed stage deals as deeply, according to Wehmeier. “The degree of competitive intensity at seed has stayed strong,” he said.
We europeans will need to accept that we have become second world compared to first world america
America has overtaken europe in most categories when it comes to quality of life and innovation
Second to American on everything except for quality of life, life expectancy, safety, happiness, equality
Not to bad so what if we have to ban the muskrat and his poison
I’d say this is expected. Era of cheap money is over, VCs are no longer buying “we will be profitable at some point in the future, I promise” crap. And since most VCs are from US, no wonder they are going to be even more skeptical over overseas investments when even the ones right under their noses are going through increased scrutiny.
Maybe this can be a good thing, less VC giants are willing to spend money in Europe, maybe this void can be filled with more smaller European ones. Or at least overall, there should be reduction in shitty startups that were never going to be profitable and the space will become more “cleaner” I would say.
You know something is f*cked when EU countries can fund social benefits for millions of illegall migrants, but can’t put even 50% of USA (and considering PPP) not even 50% of China R&D spendings, and are lagging behind in almost every newish technology.
Not even speaking about VC money and AI development with this trajectory we’ll be done in few decades and most high skilled workers will emigrate to America or even Asia.
The most important facts from the article
* deals are still 18% above what they were in 2020 and continuing pre-pandemic growth trend ignoring massive jump in 2021 and 2022
* US has three times as much investor funding as the EU
* US had nearly four times as many AI startups who raised 100 million dollars+ than the EU
* just under a third of EU startups who raised more than 100 million dollars this year are AI startups
Europe should just focus on funding social programs and welfare instead of wasting money on things like innovation and technology.
If you’re trying to be better than America, you’ll bankrupt yourselves. Just enjoy social paradise and no need to keep up with others, it will drain budgets for welfare.
Social programs, immigration and taxes are the only things that matters to our politicians and the ruling class in Brussels so, what to expect
and dont forget how far advanced they are in hosting mass shootings
Reading the article, it’s not as bad as the title suggest
>Venture capital investment has fallen around the world since the pandemic, as rising interest rates hammer the valuations of public technology stocks and push investors to increasingly focus on generating profits.
>Atomico partner and head of intelligence Tom Wehmeier said investment in European tech companies remained 18 per cent higher than in 2020, while other regions were lower compared with pre-pandemic levels.
>Venture capital investment in the US continues to dwarf spending in Europe, with nearly triple the level of tech investment this year, according to the Atomico report. China and the rest of the world will each have equivalent levels to Europe.
So investments are falling not just in Europe, but everyone (except US) and Europe is doing very well compared to the rest of the world. Actually surprised we’re managing to match China.
>Of the 36 European tech deals worth more than $100mn this year, 11 of them were AI companies. The US had 37 such AI deals over the same timeframe.
And we are doing well with A.I., which is the growth market that matters the most at the moment.
This isn’t a bad thing. Careful progress with AI and some bad, restrictive laws, that can be rolled-back and lessened is better than artists, writers etc. losing money on AI stealing their work – just an example.
It’s also better to choke risky investment companies, than deal with the economic results or a crypto boy running away with billions.
And it’s definitely a positive thing to block the richest person in the world from ignoring unions in a childish tantrum.
EU is playing the long game – in some ways this is bad, but the U.S. is playing a dangerous game. How many times will it need to raise it’s debt ceiling? Of course – if it ever defaults, it’ll screw the entire world’s economy.
The problem with EÚ, is that it’s an amalgamation of all these nations, which were having brutal and bloody conflicts between eachother less than 100 years ago. This hate and the vast economic differences is what’s holding us back. Not some pseudo-philosophical smart-talk about taking risk. EÚ can’t risk – if it gets a few big losses in a row, it’s going to collapse, because it’s being directly targeted by two superpowers aiming to overtake it and turn it into a puppet through corruption.
11 comments
**Full Article:**
Funding for European technology companies will plunge by nearly half this year, as US investors increasingly abandon the continent amid a global retreat by venture capital investors.The amount of money raised by tech start-ups in Europe is expected to reach about $45bn over 2023, according to an annual report compiled by London-based venture capital group Atomico. That is down from $82bn last year.Venture capital investment has fallen around the world since the pandemic, as rising interest rates hammer the valuations of public technology stocks and push investors to increasingly focus on generating profits.Atomico partner and head of intelligence Tom Wehmeier said investment in European tech companies remained 18 per cent higher than in 2020, while other regions were lower compared with pre-pandemic levels.“The European tech environment looks more stable now than at any point since the pandemic,” he said. “We see that bringing back certainty, a bit more predictability and helping restore confidence.”One reason for the shortfall this year was due to reduced funding from US investors.
For deals involving relatively advanced European start-ups seeking “growth stage” funding, the share of capital from US investors has fallen from 39 per cent in 2021 to 25 per cent this year. So-called crossover investors, many of which are US funds, often participate in late-stage deals but this activity has ground to a near halt.Venture capital investment in the US continues to dwarf spending in Europe, with nearly triple the level of tech investment this year, according to the Atomico report. China and the rest of the world will each have equivalent levels to Europe.One bright spot has been the proliferation of massive fundraising deals for artificial intelligence companies. European start-ups such as France’s Mistral and Germany’s Aleph Alpha are raising among the largest financing rounds of the year, raising up to €400mn and $500mn respectively this year.
Of the 36 European tech deals worth more than $100mn this year, 11 of them were AI companies. The US had 37 such AI deals over the same timeframe.“We see AI being the top theme in terms of number of investment rounds being raised at the early stages,” Wehmeier said.Large fundraising rounds have been few and far between in Europe this year, after the likes of financial technology start-ups Revolut and Klarna raised hundreds of millions of dollars in funding rounds during the pandemic boom.Some start-ups that have tapped investors this year needed to do so at substantially lower valuations. In September, Turkish grocery delivery start-up Getir raised $500mn at a $2.5bn valuation, a quarter of what it was worth just 18 months prior.While larger deals have declined, “early stage” or “seed” deals have remained relatively active as investors focus on smaller bets.Earlier-stage companies have also seen their valuations remain more resilient than more mature start-ups. While start-up valuations have settled back to long-term averages after rising during the pandemic, that correction hasn’t affected seed stage deals as deeply, according to Wehmeier. “The degree of competitive intensity at seed has stayed strong,” he said.
We europeans will need to accept that we have become second world compared to first world america
America has overtaken europe in most categories when it comes to quality of life and innovation
Second to American on everything except for quality of life, life expectancy, safety, happiness, equality
Not to bad so what if we have to ban the muskrat and his poison
I’d say this is expected. Era of cheap money is over, VCs are no longer buying “we will be profitable at some point in the future, I promise” crap. And since most VCs are from US, no wonder they are going to be even more skeptical over overseas investments when even the ones right under their noses are going through increased scrutiny.
Maybe this can be a good thing, less VC giants are willing to spend money in Europe, maybe this void can be filled with more smaller European ones. Or at least overall, there should be reduction in shitty startups that were never going to be profitable and the space will become more “cleaner” I would say.
You know something is f*cked when EU countries can fund social benefits for millions of illegall migrants, but can’t put even 50% of USA (and considering PPP) not even 50% of China R&D spendings, and are lagging behind in almost every newish technology.
Not even speaking about VC money and AI development with this trajectory we’ll be done in few decades and most high skilled workers will emigrate to America or even Asia.
The most important facts from the article
* deals are still 18% above what they were in 2020 and continuing pre-pandemic growth trend ignoring massive jump in 2021 and 2022
* US has three times as much investor funding as the EU
* US had nearly four times as many AI startups who raised 100 million dollars+ than the EU
* just under a third of EU startups who raised more than 100 million dollars this year are AI startups
Europe should just focus on funding social programs and welfare instead of wasting money on things like innovation and technology.
If you’re trying to be better than America, you’ll bankrupt yourselves. Just enjoy social paradise and no need to keep up with others, it will drain budgets for welfare.
Social programs, immigration and taxes are the only things that matters to our politicians and the ruling class in Brussels so, what to expect
and dont forget how far advanced they are in hosting mass shootings
Reading the article, it’s not as bad as the title suggest
>Venture capital investment has fallen around the world since the pandemic, as rising interest rates hammer the valuations of public technology stocks and push investors to increasingly focus on generating profits.
>Atomico partner and head of intelligence Tom Wehmeier said investment in European tech companies remained 18 per cent higher than in 2020, while other regions were lower compared with pre-pandemic levels.
>Venture capital investment in the US continues to dwarf spending in Europe, with nearly triple the level of tech investment this year, according to the Atomico report. China and the rest of the world will each have equivalent levels to Europe.
So investments are falling not just in Europe, but everyone (except US) and Europe is doing very well compared to the rest of the world. Actually surprised we’re managing to match China.
>Of the 36 European tech deals worth more than $100mn this year, 11 of them were AI companies. The US had 37 such AI deals over the same timeframe.
And we are doing well with A.I., which is the growth market that matters the most at the moment.
This isn’t a bad thing. Careful progress with AI and some bad, restrictive laws, that can be rolled-back and lessened is better than artists, writers etc. losing money on AI stealing their work – just an example.
It’s also better to choke risky investment companies, than deal with the economic results or a crypto boy running away with billions.
And it’s definitely a positive thing to block the richest person in the world from ignoring unions in a childish tantrum.
EU is playing the long game – in some ways this is bad, but the U.S. is playing a dangerous game. How many times will it need to raise it’s debt ceiling? Of course – if it ever defaults, it’ll screw the entire world’s economy.
The problem with EÚ, is that it’s an amalgamation of all these nations, which were having brutal and bloody conflicts between eachother less than 100 years ago. This hate and the vast economic differences is what’s holding us back. Not some pseudo-philosophical smart-talk about taking risk. EÚ can’t risk – if it gets a few big losses in a row, it’s going to collapse, because it’s being directly targeted by two superpowers aiming to overtake it and turn it into a puppet through corruption.