European startups set to break investment record in 2020

Mega-funding rounds of more than $100 million have boosted the continent's tech industry amid economic uncertainty

A colourful map of Europe

European tech startups are tipped to raise a record $41 billion (£30.7 billion) of investment in 2020, despite the crippling economic impact of the coronavirus pandemic

This is largely thanks to a series of "mega-funding rounds" of more than $100 million, according to a report from London-based VC firm Atomico. 

The State of European Tech 2020 report suggests investment will grow marginally compared to the $40.6 billion raised in 2019. However, European startups have had a more positive 2020 than was expected after the first few months of the year

This is partly due to the overall health of the industry, which has seen massive growth since 2016, coinciding with the so-called "mega-funding rounds". 

"In November, Hopin set the record for Europe's fastest ever company to hit a billion-dollar valuation: 17 months from founding," the report noted. "We now have 115 VC-backed companies valued at over $1bn. Spotify and Adyen hit $50bn. $100bn valuations are starting to feel inevitable, not aspirational. 

Related Resource

PwC report: Act now to recover

How to identify and solve key issues in your business

how to fix your business strategy - whitepaper from PwCDownload now

"We no longer need to sell the European tech story to LPs. Institutional investors from Europe and around the world poured three times more money into Europe's tech industry than five years ago.

"As our ecosystem matures, the share of venture capital funding from government agencies is declining and now accounts for less than 10% of VC funds raised in Europe's most mature markets."

The "mega-investment" rounds are a long way from the troubles many startups were in at the start of the pandemic. In April, most European governments were being called on to support lots of early-stage businesses that feared going bust without financial aid. 

Nearly half of those who responded to the Atomico survey said they found it harder to get funding in 2020. This was made all the worse by the challenges that were forced upon them due to the pandemic, such as pivoting products and declining sales. As a result, their wellbeing ranked amongst their greatest concerns for 2020.

Featured Resources

Choosing a collaboration platform

Eight questions every IT leader should ask

Download now

Performance benchmark: PostgreSQL/ MongoDB

Helping developers choose a database

Download now

Customer service vs. customer experience

Three-step guide to modern customer experience

Download now

Taking a proactive approach to cyber security

A complete guide to penetration testing

Download now

Recommended

So you want to work for a tech startup? It’s not all ping-pong tables and yoga
startups

So you want to work for a tech startup? It’s not all ping-pong tables and yoga

22 Dec 2020
The IT Pro Podcast: Is the sun setting on Silicon Valley?
Business strategy

The IT Pro Podcast: Is the sun setting on Silicon Valley?

18 Dec 2020
UK tech startups to watch in 2021
startups

UK tech startups to watch in 2021

15 Dec 2020
TechUK urges government to level digital divide
digital divide

TechUK urges government to level digital divide

7 Dec 2020

Most Popular

Microsoft is submerging servers in boiling liquid to prevent Teams outages
data centres

Microsoft is submerging servers in boiling liquid to prevent Teams outages

7 Apr 2021
How to find RAM speed, size and type
Laptops

How to find RAM speed, size and type

8 Apr 2021
UK exploring plans to launch its own digital currency
digital currency

UK exploring plans to launch its own digital currency

19 Apr 2021