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The Key Insights We’ve Learned from the Annual State of European Tech 2019 Report

December 11, 2019 by Luke James

The 2019 State of European Tech Report, released in late November, highlights that tech continues to drive the growth of the European economy. Prepared by Atomico in partnership with Orrick and Slush, it reveals that Europe is set to receive more than $30 billion in tech investments this year.

Although Europe continues to trail behind Silicon Valley in terms of large tech investments and venture capital, the continent is still experiencing high levels of growth and is doing well in positioning itself as an attractive hub for tech start-ups. This year alone, there have been more than 50 deals worth more than $100 million in Europe, more than ever before, and the total value of European tech investments for 2019 is set to surpass more than $30 billion. 

It is North American venture capital firms that have contributed most to this. They have invested almost $10 billion into Europe this year, almost double the $5.8 billion from last year. Funds from Asia this year are also significantly higher than 2018, up from $1.7 billion to $4 billion. 

These findings are according to the State of European Tech Report 2019, released in late November by Atomico, a venture capital firm, in partnership with Slush and a London-based tech law firm, Orrick. 


Leveraging Europe’s Scientific Talent

European research institutions have strong and respected reputations in areas of emerging tech such as AI, however, they have often served companies outside of the region. By leveraging European scientific talent, European tech leaders could outpace the likes of Silicon Valley when it comes to deep tech solutions.

2019 has seen some hopeful signals to this extent, too. 

The number of AI-related French start-ups has grown from 312 to 432 this year, up from 180 back in 2016. This includes the Parisian firm Meero which recently raised $230 million in a venture capital round for its AI-driven photography platform. Meanwhile, in Germany, Munich-based IDnow raised $40 million in venture capital for its AI-driven visual verification platform designed for online ID verification. 

It is the UK that is leading the way in Europe’s deep tech success, pulling in $2.9 billion of this year’s investments and bringing its total up to $10 billion since 2015. Trailing slightly behind are France and Germany, which together accounted for $2 billion this year. The report credits Bristol and Oxford universities for generating advances that have led to some of the continent’s most promising start-ups, as well as institutions from other countries such as Innsbruck, Austria. 

Going beyond AI, Europe may be able to establish a reputation in quantum computing. According to the report, quantum-related companies have raised more than $600 million worldwide this year. This doesn’t sound like a whole lot, however, it was European companies that raised 58% of this figure, almost double the 32% raised by U.S. and Canadian start-ups.


A graph displaying the cumulative number of European tech companies that reached a $B+ valuation in 2019.

A graph displaying the cumulative number of European tech companies that reached a $B+ valuation in 2019.  Image Credit: atomico.


Sustaining Europe’s Recent Successes

As well as looking at the hard figured, the report touched upon four key areas that need to be addressed if Europe is able to retain and build on its current success. 


Clarification of Regulatory Priorities

As many are aware, technology advancement continues to outpace regulation by a huge degree. 

40% of respondents to the pre-report survey indicated that they do not feel well-informed enough to comment on the European Commission’s priorities when it comes to digital and tech-related regulatory priorities. Many respondents also called for more simplified and streamlined compliance requirements.


More Inclusion

Inclusion is challenging the tech sector, with only 8% of funding going to companies that are led by mixed-gender and woman-led teams. 

It is widely agreed throughout the European tech community that the promotion and creation of a more diverse and inclusive ecosystem is necessary to maintain its success.


A Greater Focus on Sustainability

As awareness surrounding sustainability and the environment continues to grow among consumers, it grows among European tech leaders, too. 

85% of founders that responded to the pre-report survey indicated that they care about the social and environmental impact of their companies, and investors are increasingly choosing to back this demographic over the other one. As such, a greater focus on social impact is necessary to further growth.


Make Mental Health and Wellbeing a Priority

A whopping 20% of founders that responded to the pre-report survey said that launching their companies has had a “mostly negative” impact on their mental health and wellbeing. 

As a community, European tech and its leaders must look out for mental health problems and provide support to those who are suffering, especially among founders and leaders as founder wellness is an important factor in the overall health of the tech ecosystem. 

Chris Grew, head of Orrick’s London Tech Companies team, said, “All signs point to the clear fact that the technology ecosystem is the highest growth engine for Europe – with more successful, well-funded private tech companies than ever before and a far shorter runway to such companies achieving unicorn status.

At the same time, technology advancement continues to outpace regulation – and we must collaborate to address that – both as a business and social matter.”

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