30 Nov 2016

The State of European Tech 2016: the future is being invented in Europe

Following the success of last year’s inaugural State of European Tech report, Atomico has teamed up with Slush once again to produce an in-depth look at what’s going on in the European tech ecosystem.

We set out to establish a clear picture of how Europe’s ecosystem has evolved in 2016, and where we need to do more to better support our entrepreneurs and tech talent. With thanks to this year’s data partners — LinkedIn, Meetup, Stack Overflow, Dealroom.co, and the London Stock Exchange amongst others — we’ve identified three major trends underlying the growing influence and success of the

European technology industry:

  • Deep tech is thriving and diversifying. Since 2011, the number of deep tech startups founded in Europe has grown 3.5x. Nearly $2.3bn has been invested in deep tech in Europe since 2015 compared to the $1.7bn that was invested over the four year period between 2011 and 2014. 2016 was a bumper year with $88B in deep tech M&A, while more US and Asian tech giants as well as European corporates and investors are investing into, or acquiring, deep tech companies and tapping into a growing deep tech talent pool.
  • New tech hubs are emerging beyond the traditional order of London, Berlin, and Stockholm. The report suggests Munich, Zurich, Lisbon, Madrid, and Copenhagen will be ones to watch over the coming years. Paris is starting to seriously challenge London and Berlin in terms of the number of VC-financed deals and deal volume.
  • Traditional industries are awakening to tech. Two thirds of Europe’s largest corporates by market cap have made a direct investment in a tech company while one third has acquired a tech company since the beginning of 2015.

So it’s been a strong year and the outlook is very healthy. We’ve also made significant progress against some of the challenges we set ourselves in 2016 — to produce a $10B company, to ensure investors keep pace with the scale of ambition and technical expertise in frontier technologies like AI, and to weather economic uncertainty.

But, many of the challenges we identified last year remain. How do we bridge our late stage funding gap? How do we unlock more of our potential by building closer links between our disparate hubs? How do we overcome an alarming gender imbalance by attracting more women to become the engineers, entrepreneurs and investors of tomorrow?

The aim of this report is to provide a useful, credible and transparent data-driven look at the European tech ecosystem. Too often, people will take one data point, or a single figure from the latest quarterly capital flow figures and draw a conclusion. We think it is important to look at a number of different factors over time before making assumptions.

2016 has been another record-breaking year for European tech. By celebrating how far we’ve come while also highlighting the barriers in our way, we hope the State of European Tech report 2016 will help focus Europe’s founders, investors, developers and policymakers on the challenges that need to be overcome if we want to continue building the future in Europe.

View our report in full:


Read our summary:


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