Start-ups in Europe

Chronicle

2023: Investment in IT startups in Europe halves to $45 billion

At the end of 2023, the volume of investments in European technology startups is approximately $45 billion. This is more than half the figure recorded in 2021, when investments in such companies for the first time exceeded $100 billion. The corresponding figures are provided in a report by venture capital firm Atomico, released in late November 2023.

The report said the decline was mainly due to late-stage companies delaying fundraising. In addition, investors are more cautious about investing money due to the difficult macroeconomic situation, the crisis and high inflation. According to Atomico estimates, in 2022, IT startups in Europe raised about $83 billion: this is 22% less than the previous year, when the volume of investments was estimated at $106 billion.

Investment in European tech startups amounts to approximately $45 billion

According to Atomico, over the five-year period - from 2018 to 2022 inclusive - 257 European technology companies reached an estimate of $1 billion, including more than 150 startups in 2021-2022. But in the current market situation, IT companies are forced to prioritize profitability over growth. The Federal Reserve and central banks have raised interest rates and abandoned a number of stimulus initiatives to prevent inflation from skyrocketing. As a result, investors began to revise plans to support IT startups.

According to Atomico estimates, in the first quarter of 2023, approximately 11.1 thousand specialists working in technology companies were laid off in Europe. This represents about 6% of the global IT workforce (approximately 185,000 people). American funds were previously an important driver of financial activity in Europe, but in 2023 many of them were forced to cancel investment programs, which seriously hit the industry.^[1]

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