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The
combined value of public and private tech firms in Europe fell
to $2.7 trillion, down from $3.1 trillion in late 2021. High
interest rates, the war in Ukraine, and a shrinking talent pool
were among the reasons cited for the drop.
Market pressures forced a number of Europe's best-known
companies to raise funds at a discount to their once sky-high
valuations. For example, Swedish payments firm Klarna Bank AB
raised $800 million at a valuation of $6.7 billion, an 85% drop
from its 2021 price tag of $46 billion.
"The European tech ecosystem is facing the most challenging
macroeconomic environment since the global financial crisis,"
Tom Wehmeier, partner at Atomico, told Reuters.
Venture capital funding in Europe was down to $85 billion for
the year, based on data collected across 41 countries, an 18%
decline from the $100 billion raised in 2021.
The number of new "unicorns" - firms valued at $1 billion or
more - also fell this year, down from 105 to just 31 in 2022.
Despite these challenges, Atomico found industry insiders remain
enthusiastic. In a survey of founders and investors on the
continent, 77% said they were either as enthusiastic, or more
so, about the future of the European tech industry than in 2021.
"This is a new reality," Wehmier added. "The financial markets
have changed, and with that, the expectations of everyone
working within the European tech industry need to evolve."
(Reporting by Martin Coulter and Supantha Mukherjee;Editing by
Elaine Hardcastle)
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