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

2021 Thales cloud security study

The challenges of cloud data protection and access management in a hybrid and multi cloud world

Free download

IDC agility assessment

The competitive advantage in adaptability

Free Download

Digital transformation insights from CIOs for CIOs

Transformation pilotes, co-pilots, and engineers

Free download

What ITDMs did next - and what they should be doing now

Enable continued collaboration and communication for hybrid workers

Most Popular

What are the pros and cons of AI?
machine learning

What are the pros and cons of AI?

30 Nov 2021
How to move Microsoft's Windows 11 from a hard drive to an SSD
Microsoft Windows

How to move Microsoft's Windows 11 from a hard drive to an SSD

24 Nov 2021
What is single sign-on (SSO)?
single sign-on (SSO)

What is single sign-on (SSO)?

2 Dec 2021