The record amount of EUR 121 billion dollars total funding raised by European startups in 2021 is expected to arrive An amount that is three times higher than the equivalent of 2021 and approaches (although it still has a long way to go) the corresponding funds invested in the USA and Asia.

These estimates were made by the VC, Atomico , in which, as it points out, during the current year nearly 100 startups became unicorns (their valuation reached or exceeded $1 billion). The total number of unicorns on the European continent has reached 323.

"It took many decades to rise The total value of European startups at 1 trillion. dollars, a milestone reached in December 2018", says Atomico partner Tom Wehmeier. "Twenty-four months later the industry had doubled its value and This year it reached 3 trillion. dollars", as he said. As he adds, growth has accelerated and as a result Europe has entered the era of Big Tech.

Europe, USA, Asia

Although the climate in the European ecosystem is warm, Europe lags far behind the US. Total investment is foreseen to reach EUR 200 billion. dollars by the end of the year, in line with EY forecasts. Regarding Asia, Crunchbase reports that total funding until the end of the third quarter of this year it had exceeded EUR 100 billion. dollars.

For European startups, the search for better returns from an increasingly diversified investor base such as hedge funds is a conjuncture that has greatly benefited them. This is partly due to the European technology industry, according to Wehmeier. "This is the best set of talent and founders we've ever seen, so it's a virtuous cycle of success that generates more success, as technology has become a key driver of growth for the region."

Europe has the strongest pipeline it has ever had for startups at an early stage. It currently accounts for 33% of all funds invested globally in funding rounds of up to EUR 5 million. dollars. Correspondingly, this percentage in the USA is 35%.

Record funding for Startups

There was also an explosion in funding rounds at the last stage and at the large-scale stage. Something that reflects the trend of companies choose to remain private for a longer period of time. In this case their choice is raise funds from individuals. It is characteristic that compared to 2020, this year's number of funding rounds 250 million. dollars or more was ten times higher.

A long-standing question is when and where successful European technology companies choose to become public companies. Also, in order to have reached this point, they must not have been bought out by an American tech giant. There are 122 venture capital-backed unicorns in Europe right now. On the other hand, only 50 have entered the stock markets. At the same time, an ever-increasing number choose the US stock markets. A trend that is partly due to the fashion with Special Purpose Acquisition Companies (SPACs). The problem of flight appears to be growing in Great Britain.

Initial Public Offerings

However, as Atomico notes, the greatest value from the IPOs of European technology companies It remains on the stock exchanges of the European continent. In 2021, the IPOs of technology companies in Europe surpassed those in the US. They reached 122 against 90. However, their value was usually lower than that of their US bonds. Registrations in Europe included, among others:

• food delivery company Deliveroo
• the Wise payments company
• the security company, Darktrace

"The European technology industry is at a turning point," Chris Groux, a partner at London-based law firm Orrick, said in a statement. "The current record of investment is the culmination of a multi-year effort that is currently paying off," he concludes.