Atomico, the European enterprise capital agency based by Skype’s Niklas Zennstrm, has launched its newest annual The State of European Tech report, revealed in partnership with Slush and Orrick.

As half of the report, the authors surveyed 5,000 members of the ecosystem together with 1,000 founders in addition to pulling in sturdy information from different sources, reminiscent of Dealroom and the London Stock Exchange .

This 12 months, the report reveals that the European tech ecosystem continues to mature and exhibits no signal of slowing significantly highlighting the distinction from 5 years in the past when the The State of European Tech report made its debut. Nearly each key indicator is up and to the suitable, besides, slightly depressingly, variety.

The info exhibits, for instance, that competitors for expertise and entry to the most effective founders has elevated ferociously. And from a funding perspective, European founders have extra alternative than ever, particularly with U.S. and Asian VC companies investing an increasing number of within the area. Progress with gender variety stalled, nevertheless, reminiscent of 92% of funding going to all-male groups.

I caught up with the report’s creator Tom Wehmeier, Partner and Head of Insights at Atomico (additionally typically jokingly known as the “Mary Meeker of Europe”), the place we talk about in additional element some of the important thing findings and why, it appears, that the remaining of the world has lastly woken as much as Europe’s tech potential.

However first, a couple of headlines from the report:

  • European know-how firms are on observe to boost a file 30$B+ in funding in 2019, up from $25B the 12 months earlier than. (Supply: Dealroom)
  • Regardless of failing to match the extent of venture-backed exits of 2018, there was a file quantity of 40 $100M-plus offers as of September 2019, a dimension that many European tech sceptics didn’t imagine was doable. (Supply: Dealroom)
  • A quantity of multi-billion-dollar non-venture backed firms like Nexi and Trainline made their debut on the general public markets.
  • European tech policymaking stays a thriller to many European founders.
  • When requested to explain the highest precedence of the European Fee in phrases of tech coverage, 40% of founders and startup workers say they don’t really feel knowledgeable sufficient to remark. (Supply: survey)
  • Regardless of this reported lack of consciousness on coverage points, all respondents voted EU competitors commissioner Margrethe Vestager as the one who had probably the most affect on European tech in 2019, good or unhealthy. (Supply: survey)
  • European parliamentarians aren’t speaking about fintech and digital well being, two sectors which buyers poured a mixed $12.7bn into final 12 months (Supply: Politico and Dealroom)
  • Europes variety figures are nonetheless grim studying.
  • In 2019, 92% of funding went to all-male groups, the same stage to 2018. (Supply: Dealroom)
  • There’s nonetheless just one girl CTO within the 119 firms (<1%) based mostly on a pattern of executives in CxO positions at 251 European VC-backed tech firms that raised a Sequence A or B spherical between 1 October 2018 and 30 September 2019 with greater than $10M funding, regardless that 7.5% of software program engineers are girls. (Supply: Stack Overflow, Craft, Dealroom)
  • Wanting past gender variety, ethnic minorities in tech skilled discrimination at a a lot excessive fee than white friends. (Supply: survey)
  • No less than 80% of Black/African/Caribbean respondents who reported experiencing discrimination linked it to their ethnicity. (Supply: survey)
  • 63% of girls VCs reported elevated give attention to attending occasions with stronger participation from various founders. The corresponding quantity for males VCs was solely 33% of feminine respondents urged that their male counterparts are leaving feminine VCs to repair Europes variety drawback. (Supply: survey)
  • European founders arent simply aiming for business success they’re attempting to resolve some of the worlds largest issues.
  • One in 5 European founders states that their firm is already measuring its societal and/or environmental impression. (Supply: survey)
  • Solely 14% of founders don’t imagine it’s related for his or her firm. Founders which are girls are more likely to be superior of their method to measuring impression. (Supply: survey)
  • Workers are inserting a larger emphasis on company social duty, with 57% citing its significance within the State of European Tech survey. (Supply: survey)

Further Crunch: It’s 5 years since Atomico revealed the primary The State of European Tech report, which actually tried to seize a data-driven snapshot of your entire ecosystem. What are some of the largest modifications youve seen inside European tech within the intertwining years or on this 12 months particularly?

Tom Wehmeier: If I feel again to after we did the primary report, individuals who imagine that Europe might really be an attention-grabbing participant in international know-how, have been largely restricted to individuals who have been within the tech business in Europe itself. For those who then quick ahead to at the moment, what has clearly occurred and I feel 2019 was the 12 months the place this actually materialized and have become half of the narrative was that perception translating from folks on the within to a bunch of folks that have been on the skin.

Most clearly has been the power of curiosity from from the U.S. and the quantity of top-tier U.S. funds that aren’t simply growing their stage of funding exercise however committing to spending an increasing number of time right here on the bottom, hiring folks, constructing groups, constructing a community, and attending to know firms. I feel it most likely surprises folks to know that 19% of all rounds this 12 months will contain a minimum of one U.S. investor in Europe, which is greater than double since because the first 12 months we did the report.

Atomico Partner Tom Wehmeier reviews ‘The State of European Tech’ 2019 report – TechCrunch

I feel the opposite factor, the place I come again to this concept that now we now have lastly satisfied a sure group of folks concerning the position that Europe can play, is mainstream institutional buyers. I do know it isn’t going to be misplaced on you, [but] that is going to be one other file 12 months for VC fund elevating from Europe. And while the headline numbers may not be a shock, I feel what ought to catch folks’s consideration is that the composition of the LP base right here in Europe is now shifting. And at last, there’s an unlocking of institutional buyers, [by which] I imply pension funds, funds of funds, insurance coverage firms, sovereign wealth funds, who’re committing to European VC at ranges which are considerably elevated and elevated from the place that they had been prior to now. So, when you simply take pension funds, we’re going to see near a billion {dollars} invested which is up practically three fold.

It’s a validation of what’s taking place round European tech to see that now coming by and I feel is finally one thing that helps to construct a basis for the subsequent 5 years of success. As a lot as it is a report that’s trying again, it’s additionally about attempting to know the place issues go from right here.

Close to the pension funds, do you assume that’s pushed by the final bullishness in the direction of European tech, or do you assume it’s extra the macro financial actuality that perhaps different locations the place they may put their cash aren’t very enticing in the intervening time?

I feel it’s actually a mirrored image that there’s a robust stage of perception that European enterprise as an asset class is a sexy funding alternative. And that’s mirrored by the numbers. One of the charts that we’ve bought within the report is from Cambridge Associates who do the benchmarking for the VC indices… And while you look again over a 1, 3, 5, or perhaps a 10 12 months horizon, the efficiency from European VC is demonstrating that it is a place the place for anybody constructing a diversified portfolio, they need to have some allocation. I feel it’s essentially the power of the funding alternative. That’s the single greatest driver for why you’re seeing this occur.

I feel the largest factor that Europe has been capable of show is that it may possibly take an incredible thought and switch it into an incredible firm and that firm can scale to not only a billion greenback final result however to a multi-billion greenback final result and go all over into an IPO or into a big scale acquisition. What you’ve seen occur in 2019 is partly A mirrored image of what occurred final 12 months the place it was clearly this file 12 months with Spotify, Adyen, Farfetch, Elastic and others that basically confirmed you possibly can go full cycle from begin all the way in which to complete. And that the magnitude of these outcomes may be at a scale that makes them globally related.

Are the pension funds shifting their allocation of VC away from different geographies or are they simply doing extra VC as a complete?


Please enter your comment!
Please enter your name here