Amotico just released its annual survey on the state of European tech for the 2022 year and it’s a complex scenario, to say the least. The continent has not escaped unscathed from the financial instability that has been rocking tech companies in the US and beyond. There are setbacks and cuts but still, there has been growth, and most significantly, a light at the end of the tunnel.
None who work within the European tech ecosystem expected otherwise, as we have been privy to difficulties and slowdowns in funding, scaling efforts and most difficult of all layoffs. For many this year has been a test and a call to action towards better tactics. Those that have thrived and survived this period, surely look to the future with a different perspective.
The survey with the input of over 4.000 tech founders, workers and startup entrepreneurs, has over 400 charts of incredibly detailed data, an interesting read for anyone looking to dive deeper into the European tech ecosystem. For us, it left some key insights and projections.
Downturn is a reality
The European tech ecosystem lost $400B in value this year, a number that looks more catastrophic than it is.
Especially if you take into consideration that every tech market in the world has been hit hard this year, and the continent faced not only global instability but an armed conflict between Ukraine and Russia.
A better number to look at would be its $2.7T standing economic value, and the fact that the value loss amounts to %18, considerable but manageable.
Talent is the key to growth
The regenerative talent wheel is what keeps growth active and thriving. In Europe’s ecosystem, more founders than ever before have emerged from their previous companies.
This means talented individuals and teams going from one startup to create another, continuing the cycle of growth within the European tech sector.
What is the biggest growth sector? Fintech is the leading drive for Europe
There are more European investors than ever
Yes, investment went down. Going from the landmark $100B in 2021 to $85B this year.
No one was left untouched by the economic instability. This is no surprise as it is probably the most uncertain market since the 2008 crisis. However, it is not as dire and startups continue to find their footing.
For Europe in particular there are massive dry powder levels totalling $84B. Plus the number of VCs and investors is higher than ever. There is caution in the environment but the possibilities are still there.
Sustainable growth will be key
The tech bubble burst and growth is now a matter of strategy. As massive rounds and wild west investments disappear, companies need to do better with less.
Leading to a cool head mentally, where smart decision-making to keep the scale-up pace is going to be paramount.
Growth plans must now be detailed, efficient and mindful of the uncertainty surrounding the ecosystem. So, many companies are still receiving funding and adding talent, and that’s not going away any time soon. What we might notice is a more level-headed scaleup approach.
2023 will be better
At least that is what the participants feel. More than half, 77% maintain the same or higher levels of optimism for the European tech ecosystem.
Right now the continent stands in a complex situation, along with the rest of the world but there are good signs all around as well. Like them, we also believe in those signs, talent growth, the nonstop drive of innovation and the power of a European ecosystem still on the rise.