The amount of capital invested in European tech startups will decrease to $45 billion in 2023. This is stated in the report of the venture capital company Atomico, writes Reuters.
The expected figure is 55% lower than in 2021, when the volume of investments exceeded $100 billion for the first time. In 2022, the capital invested in European tech startups amounted to $82 billion. The reasons for the decline include the fact that companies at later stages of development postponed fundraising.
“Some of the startups who raised large sums in 2021/early 2022 to hit their billion-dollar valuation will see their valuations drop below the billion-dollar mark,” said Tom Wehmeier, a partner at Atomico. “I expect to see more of this next year as those companies are likely to be running out of runway at this point, and will need to return to market in 2024 or 2025 to survive,” he said.
According to Atomico, 257 European tech companies reached the billion-dollar mark in the five-year period from 2018 to 2022.
Meanwhile, experts predict that this year’s funding will be 18% higher than in 2020.
“When you consider how overheated those two years were, the fact we are up from 2020 suggests that Europe is heading in the right direction, especially since it is the only global region to be up since 2020,” Wehmeier said.
Atomico expects the number of European early-stage startups to grow from 41 thousand to 66 thousand over the next five years, and the number of startups that have raised at least $20 million to double to 8 thousand.