The European tech community is becoming stronger despite worries about Brexit

A new report from Atomico reveals that not only is the European tech community becoming more active but it’s also attracting more investments

The European tech community is becoming stronger despite worries about Brexit

A combination of constant headlines regarding the slow-moving Brexit negotiations, the plummeting pound and the season’s darker and colder days could make any entrepreneur feel pessimistic about the future. Fortunately, a new report from Atomico, the VC firm, has revealed that European tech founders have plenty of reasons to be cheerful.

Having surveyed over 3,500 people working at European tech startups and doing in-depth interviews with over 50 startup founders, investors and policy makers, Atomico believes the ecosystem is primed for great things while it’s becoming more active. For instance, not only are there 172 tech-related meetups occurring every day in Europe but that number is also set to grow. In 2012, the number of cities with more than 50 tech meetups per year was only 30. Encouragingly, that number has skyrocketed to 167 in 2017.

At the same time, this sector has seen an impressive boost in investment. While $4.1bn was invested in European tech startups in 2012, that number has grown to $19.1bn in 2017, a jump from $14.4bn in 2016. “There’s capital out there for starting and scaling companies at a level that has not been seen in Europe historically,” said Stephen Lowery, managing director of global markets at Silicon Valley Bank and one of the interviewees in the report.

Nevertheless, founders are advised to pay close attention to how international macro events could affect their businesses. Unsurprisingly, the UK triggering Article 50 was seen as the number one thing affecting European tech startups, with 52% believing it had a big impact on the sector. While Brexit has left many concerned about market uncertainties and access to talent, other big international news could have a more positive impact on the sector. For instance, the second biggest change was the emergence of initial coin offerings as a means of raising money. In fact, 15% of the surveyed startup founders believe this could have a large impact on their business. Other things that could’ve affected startups in this sector either good or bad included the election of Donald Trump had affected them, Emmanuel Macron taking office in France and investments made by the European Investment Fund during the year.

Despite Brexit, the report also revealed that London has become the number one location for European startup founders to move, swapping places with this year’s runner-up Berlin. Barcelona came third, while Paris jumped nine whole positions to become the fourth most popular city to move to for founders, a testament to the French government’s efforts to attract more entrepreneurs. The most popular reason for startup founders to move across the continent were access to talent, followed by a perceived ease of doing business, access to capital and the quality of the ecosystem.

Commenting on the findings, Tom Wehmeier, partner and head of research at Atomico, said: “This year’s findings reveal the state of European tech in 2017 is the strongest it has ever been. Europe is building a tech ecosystem in its own image, defined by deep tech expertise, incredible geographic diversification and a uniquely collaborative approach with traditional industry. The solid foundations that have been laid – a huge and deep talent pool, founders with global ambition levels and a large, growing and increasingly sophisticated investor base – means that Europe marches to its own beat.”

As the year draws to an end, it’s great to see the startup community almost bursting with promise for 2018.

Eric Johansson
Eric Johansson

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