How the European tech industry is doing

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

Venture capital firm Atomico has published its State of European Tech Report: according to the report, around 85 billion US dollars flowed into the European tech sector 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 start-ups decreased significantly, with the total investment volume falling below the 100 billion US dollars of 2021.

This year is also lagging well behind 2021 in other areas: last year, 105 companies achieved unicorn status. In addition, there were only two IPOs with a market capitalization of over one billion US dollars, compared to 86 in the previous year. Tech start-ups across Europe laid off 14,000 employees this year. The reason for these developments is the general economic situation. "However, the macroeconomic situation is affecting every industry worldwide and should therefore not obscure the fundamental progress of the tech sector," says Sarah Guemouri, co-author of the report.

In principle, however, the report authors' forecast is good: the tech sector is primarily backed by long-term oriented and active investors. In particular, companies that develop ecologically and socially sustainable solutions are expected to have an advantage. These start-ups 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. Germany is particularly active in the "clean energy" sector, especially in the areas of "solar energy" and "CO2 reduction". Between 2018 and 2022, German companies raised as much as 16% of the total capital invested in European start-ups.