European Startups Set to Raise $51B in 2021, Marking a 39% Decrease from 2020

European Venture Shows Resilience According to Atomico Report

The slowdown in venture capital funding has been a worldwide phenomenon, and research by VC firm Atomico reveals that this “adjusted market reality is here to stay”. Based on data from Dealroom and Crunchbase, Atomico predicts a 52% decline in European start-up funding this year compared to 2021, assuming no changes. This is a decline, but similar to the downward trend in other major regions.

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It is worth noting that the report excludes Israel, which is often included in European venture data summaries, as well as biotech, secondaries, debt, or lending capital. The exclusion of some of these sectors and funding routes, which are experiencing growth, is significant. However, the geographical, sectoral, and funding-type limitations are consistent with previous Atomico reports, providing a reliable basis for historical comparison.

Similar to the United States, Europe is facing similar challenges, including infrequent exits and a poorly performing IPO market. However, recent European venture capital totals are still worth examining for potential optimism despite the predicted decrease in funding levels.

The Bad News Isn’t So Bad After All

According to Atomico, European tech investment volumes are expected to reach $51 billion in 2023, approximately half of the 2021 levels. However, the comparison is not very useful as it was a year of exceptional growth. A more useful comparison is with previous years with a more stable funding climate than the inflated 2021 figures.

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