Atomico published The State of European Tech 2024 report, a comprehensive overview of the European tech ecosystem's growth, challenges, and future prospects over the past decade.
Europe's tech ecosystem has experienced remarkable growth over the past decade, according to the State of European Tech 2024 report. Since 2015, the continent's tech talent pool has expanded sevenfold, while total investment volume has increased tenfold, reaching approximately $45 billion in 2024. The number of companies valued at over $1 billion has grown from 72 in early 2015 to 358 in 2024, demonstrating Europe's ability to nurture startups from inception to IPO.
The report highlights significant improvements in the entrepreneurial culture. A majority of experienced founders note positive changes in various aspects of the tech landscape, with 79% seeing improvement in access to capital and 77% noting better availability of talent.
However, challenges remain. The report identifies a $375 billion growth stage funding gap compared to the US. There's also a concerning trend of European founders considering starting their companies in the US, with 23% indicating they would do so today, although 72% would still choose to stay in Europe.
The report outlines six key areas for improvement, including addressing the low 0.007% share of European pension funds invested in European VCs. Initiatives such as the Tibi initiative, WIN-Initiative, and Mansion House Compact are emerging to tackle these challenges.
The European tech ecosystem is increasingly focused on solving major global challenges. Notably, 11% of US tech companies have European founders, while only 6% of European tech companies have US founders, indicating a flow of talent from Europe to the US.
Looking ahead, the report sets ambitious goals for the next decade, including the creation of over 15 million new tech jobs, the emergence of trillion-dollar companies, and an added ecosystem value exceeding $5 trillion. These projections underscore the potential for continued growth and innovation in European tech, provided the identified challenges are effectively addressed.
As the ecosystem matures, the emphasis on sustainable growth, equal access to opportunities, and strategic policy initiatives will be crucial in realizing the full potential of European tech. The next decade promises to be transformative, with the potential to reshape Europe's economic landscape and its role in global innovation.
In summary:
• Europe's tech talent pool has grown 7x since 2015
• Total investment volume increased 10x in 10 years, reaching ~$45B in 2024
• Number of $1B+ valued companies in Europe grew from 72 in 2015 to 358 in 2024
• 79% of experienced founders see improvement in access to capital
• 77% note better availability of talent
• $375B growth stage funding gap compared to the US
• 23% of European founders would start their company in the US today
• 72% of European founders would still choose to stay in Europe
• Only 0.007% of European pension funds are invested in European VCs
• 11% of US tech companies have European founders, while 6% of European tech companies have US founders
• Key initiatives addressing challenges: Tibi initiative, WIN-Initiative, Mansion House Compact
• Goals for the next decade:
- Creation of 15M+ new tech jobs
- Emergence of trillion-dollar companies
- Added ecosystem value of $5T+
• Focus on solving major global challenges and creating role models across sectors and countries