European tech a 'bright spot' in global economy, as startups raise record $30bn

Edmund Heaphy
Finance and news reporter
The skyline of Berlin with the Fernsehturm (TV tower) in the foreground.

The European technology sector is “a particular bright spot” in a world economy riven by trade wars, with startups in the region set to raise a record $30bn in 2019, according to a new report.

“As the world focused on the clash between US and Chinese governments and global markets suffered, European tech quietly continued its steady and solid growth,” the report, published by venture capital firm Atomico, said.

There have been a record number of funding deals worth more than $100m so far this year, with over 40 companies raising that amount.

“Europe’s economy may not be immune, but its technology companies have continued to break records in the past twelve months,” said Tom Wehmeier, a partner and head of insights at Atomico.

“European tech companies are performing at a level that many considered unthinkable when we first started this report five years ago,” he said.

The growth comes even as the report found that European technology policymaking “remains a mystery” to the founders of startups.

Some 40% of startup founders and employees surveyed by Atomico said that they did not feel informed enough to comment on the European Commission’s top tech policy priority.

All respondents to the survey, which was completed by 5,000 members of the European tech ecosystem, said that Margrethe Vestager — who will soon begin a rare second term as the bloc’s competition commissioner — was the most influential person on European technology in 2019.

And even though investors poured nearly $13bn into the European fintech and health technology sectors, members of the European Parliament “aren’t talking” about those sectors, the report found.

Meanwhile, the technology sector in Europe still faces severe diversity issues. So far in 2019, 92% of funding went to all-males teams, suggesting there has been no improvement on last year.

Ethnic minorities face discrimination at a much high rate than white peers, while at least 80% of Black, African and Caribbean respondents who reported experiencing discrimination linked it to their ethnicity.

People from a lower socioeconomic backgrounds, meanwhile, face financial barriers to becoming an entrepreneur in Europe.

Over 81% of entrepreneurs said they were “living comfortably” before they founded their startup.

The report was published in partnership with Slush, a Helsinki technology conference, and Orrick, a technology-focused law firm.