Beyond the latest amazing adventures of generative artificial intelligence (and the associated only temporary reversals), How is the technology, especially in Europe?
The State of European Tech 2023 tells us this, a dense report of over 250 pages and with 150 insights, which like every year is published by the Atomico investment fund.
As we’ll see, 2023 was a decidedly negative year for investments, but there was no shortage of positive aspects.
He reports
The State of European Tech 2023 photographs the state of technology in Europe, and was drawn up by Atomico with the collaboration of data partners such as dealroom.co, Invest Europe, S&P Global Market Intelligence, Pitchbook, Preqin, Revelio Labs and Crunchbase.
The state of technology in Europe
Starting from the investment data, the numbers are merciless: we went from 82 billion dollars in 2022 to 45 billion in 2023, with a 45% drop in total capital invested in Europe. However, we are in line with the world average, which fell by 39%, also due to the decline in US investors.
The state of technology in Europe regarding startups is more comforting: the sector employs more than 2 million people, and in 2023 it recorded an all-time record for fundraising by venture capital, 108 billion dollars.
It’s Italy?
Italy’s health is comforting compared to the overall health of technology in Europe.
Our country, with 0.89 billion dollars in investments, more than 78,000 people employed and over 40,000 companies in the sector, is at the fifth place in Europe for the creation of startups and seventh place for financed technology companies.
Investments declining compared to 2022
In reality, the 0.89 billion dollars invested in Italy in 2023 are a sharp decline compared to the 2.4 billion dollars in 2022 (-63%) but an increase of 20% compared to 2020 (0.74 billion dollars ).
Spain also saw a significant decline (42%) compared to 2022, with an investment of 1.6 billion dollars compared to 2.7 billion last year. But there is an increase of 18% compared to 2020 (1.32 billion dollars). Portugal’s investment decline is even more marked (0.152 billion dollars compared to 0.51 billion in 2022, -70%).
Difficulties
Megarounds are financing rounds of more than $100 million.
Well: in 2023 there were only 36 in Europe, including one in Italy, compared to 163 in 2022 and almost 200 in 2021.
There is greater difficulty in raising capital. However, Italy is in seventh place in Europe in terms of the number of companies that receive financing, and rises to fourth when the financed and non-financed tech companies are added.
Strength points
The state of technology in Europe also shows us positive aspects.
For example, despite the layoffs at the beginning of the year, The number of people working in the technology sector has grown significantly on our continent.
Over the past five years, the European technology industry has grown from 750,000 to more than 2.3 million employees.
In 2023, Italy gained 20,000 net tech employees.
Artificial intelligence has raised 11 megarounds, and this seems to be the driving sector for the future. In fact, in the last decade the number of people working in positions related to AI has increased tenfold in Europe. Spain boasts over 9,000 people employed in the sector, Italy 6,300, and Portugal 2,000.
The statements
Tom Wehmeier, Head of Intelligence at Atomico and one of the authors of the State of European Tech 2023 report, expressed his opinion on the state of technology in Europe.
Wehmeier said: “This year’s report shows that founders and talent in Europe are taking risks and tackling the most complex problems, such as AI, climate and health.
Now we need to further expand this willingness to take risks and better embrace the potential available to us. We need to build an investor landscape that truly matches the ambitions of our founders. Currently, businesses are still 40% more likely to be funded in the US than in Europe, and our public markets continue to be restrained from the tech sector.
European companies can do more to deploy their cash on digital transformation and the regulatory landscape to embrace and incentivize innovation. We will be able to fully grasp the value of our technological opportunities only if all elements of the ecosystem are ready to get involved.”