European tech funding declines for third consecutive year — but the sector is finally stabilizing
VC investment in European startups is projected to decline for a third straight year, according to Atomico — but there are signs things are finally stabilizing.
Venture capital investment in European technology startups is projected to decline for a third straight year, according to VC firm Atomico — but there are signs that things are finally stabilizing as valuations improve and interest rates fall.
Europe's venture-backed startups are expected to secure $45 billion of investment by the end of 2024 — slightly lower than the $47 billion they raised last year, Atomico said Tuesday in its "State of European Tech" report.
Still, Atomico said this shows that European tech funding levels have finally "stabilized" despite worsening global macroeconomic conditions leading to three consecutive years of declines.
The firm stressed that the continent's tech ecosystem is in a much better place than it was a decade ago, with funding this year still set to eclipse the $43 billion startups raised between 2005 and 2014.
In the period spanning 2015 to 2024, European startups have bagged $426 billion, dwarfing the sum of investment deployed into tech firms the decade prior.
Tom Wehmeier, head of insights at Atomico, told CNBC that Europe still has a few key areas of improvement to address before it can produce companies of similar scale to the largest tech firms in the U.S. and China.
"There's frustrations about the continued challenges faced when it comes to regulation, bureaucracy, access to capital and this idea of scaling across the fragmented European marketplace," Wehmeier said in an interview.