Europe, technology has lost 400 billion in one year

Europe

Curbs the race of the technology industry in Europe. If 2021 had marked the record figure of 100 billion dollars of investments in technology, 2022 got off to a good start (+4% in June compared to the same period of the previous year) but slowed down at the halfway point. The figure is contained in the State of European Tech report presented by Atomico, a London-based venture capital. At the end of the year, according to projections, it will reach (conservative estimate, the authors say) 85 billion dollars. The report points out that, in any case, this is more than double the amount recorded in 2021, and eight times higher than that of 2015, the first edition of the study. The number of US investors is down (-22%).

Among the risk factors identified by the founders and venture capitalists interviewed, inflation and high interest rates stand out (45%), loss of competitiveness due to political decisions (42%), market sentiment and performance (41% ). Geopolitics accounts for 38% of the answers (but it influences all the other factors), while 37% complain - and this is a consideration that deserves further study - the scarcity of capable collaborators on the market.

Four hundred billion in value lost

In twelve months, European tech companies (public and private) have lost 400 billion dollars in market value, with the continental ecosystem whose the total value has gone from 3.1 trillion in 2021 to 2.7 today.

Not only that. The large IPOs (Initial public offerings) are declining: in 2022 there were only three in the sector with a value exceeding one billion dollars, two of these in Europe. Numbers that disfigure compared to the 86 of 2021: thirty times less. In 2022, 31 new unicorns emerged (including the Italian companies Satispay and Scalapay), against the record of 105 in 2021: thus returning to the typical levels of previous years, which saw 25 new unicorns in 2020 and 35 in 2019. Finally layoffs: to date, over 14,000 employees of technology companies based in Europe have been made redundant, equal to 7% of the global total.

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Mature market

After the explosive growth of the past few years, the slowdown could simply reflect the tense geopolitical situation or (in addition) indicate a plateau in the market. The data should be interpreted in perspective, comments Sarah Guemouri, principal of Atomico and co-author of the report. “ Last year has accustomed us to exceptional numbers: what we are seeing in 2022 is still significantly higher than two years ago. We will naturally see ebbs and flows as Europe's ecosystem matures, but we should not underestimate our overall progress based on the macro-conditions that are affecting every sector globally."

Among the positive signs, the record level of liquidity ready to be used. But, notes Chris Grew, partner of the international law firm Orrick, " we are in a period of market uncertainty and the data clearly suggest that founders will do well to focus on efficiency, sustainability and profitability rather than unbridled growth ”

A note of hope comes from Ukraine Despite the war, the country's technology industry has held up: in the first eight months of 2022, Kyiv's ICT grew by 16% year-on-year, the only export sector capable of stably generating foreign exchange earnings.85% of Ukrainian companies in the industry have returned to pre-war indicators, and 77% have attracted new customers since the beginning of the conflict.This year, one Ukrainian company even managed to qualify like unicorn: Unstoppable Domains, which builds uncensorable websites via blockchain-secured domains.This growth reflects the broader strength of the Ukrainian startup ecosystem, which, at By the end of October, it had attracted a whopping $241 million. In the regional context, Ukraine ranks sixth in terms of investments in startups. The unicorns are thirteen.