This is how the European tech industry is doing

Fewer IPOs, but still high investments in technology companies: The year 2022 was difficult for the tech industry, but there is still reason for optimism.

Venture capitalist Atomico has published its State of European Tech Report, according to which around 85 billion US dollars flowed into the European tech industry this year. The first half of the year exceeded the level of the same period last year by four percent. In the second half of the year, however, financing rounds for European tech startups decreased significantly, and the overall investment volume is below the 100 billion U.S. dollars of 2021.

This year also falls well short of 2021 in other areas: last year, 105 companies achieved unicorn status. In 2022, there were only 31. In addition, there were only two IPOs with a market capitalization of over one billion U.S. dollars, compared with 86 in the previous year. Across Europe, tech startups laid off 14,000 employees this year. The reason for the developments is the general economic situation. "However, the macroeconomic situation affects every industry worldwide and therefore should not obscure the fundamental progress of the tech sector," says report co-author Sarah Guemouri.

In principle, however, the report authors' prognosis is good: according to the report, the tech sector is primarily backed by long-term-oriented and active investors. Above all, companies that develop ecologically and socially sustainable solutions are expected to have an advantage. These startups already account for 15 percent of total investments in Europe.

Germany, France and Spain are the preferred nations across Europe for the immigration of founders and tech executives. There is a particularly high level of activity in the "clean energy" sector in Germany, especially in the areas of "solar energy" and "CO2 reduction." German companies raised a full 16 percent of the total capital invested in European startups between 2018 and 2022.