Spotify and Revolut are ‘emblematic’ of Europe’s tech growth over the past decade, Atomico finds.

European tech investments dropped drastically since 2021, stabilising after two “outlier years,” of  “unprecedented” levels of investments, according to venture capital firm Atomico in its latest annual report, State of European Tech 2024.

Tech Investment levels in Europe peaked at $101bn in 2021, a more than $60bn jump since 2020, and while the peak slumped in 2022, tech investments in Europe were still considerably high that year, valued at $82bn.

However, in 2023 and 2024, tech investments in the region nose-dived to under $50bn, reverting back in line with the long-term growth trajectory, according to Atomico. This year, tech investments in Europe are on track to reaching $45bn.

The market has reach a new “equilibrium,” said the VC firm, as despite the turbulent years of the Covid-19 pandemic, investments in recent years have grown by 20pc when compared to the $37bn worth of tech investments in 2020.

2023’s downturn followed global trends in tech funding which has been diminishing the value of investments raised in several major markets, according to last year’s State of the Tech report.

Investments in Europe this past decade is 10-times higher than the decade leading up to 2015 – growing from $43bn worth of investments between 2005 to 2014 to $426bn between then and 2024.

To compare, the tech investments made in Europe in 2024 alone is worth 10 years of investments in technology in the region leading up to 2014.

However, even though the US grew at a much slower pace 2.8 times in the same period – the country alone has a VC investment in tech valued at $1.2tn.

Still, Europe grew at a considerable pace. The number of unicorn tech businesses in Europe – worth more than $1bn – have grown 4.9 times since 2015 to 358 companies, whereas the region now hosts more than 3,400 late stage companies and 35,000 early stage companies.

“In the last ten years, things have really, really accelerated. We’ve gone from early indications to now proof that European tech is working, the flywheel is spinning,” said Niklas Zennström, the founder and CEO of Atomico.

VC investment in Ireland dropped by 59pc in this year’s third quarter between July and September – and is likely to remain soft until the dust settles down from the US presidential elections, according to a recent KPMG report.

The report highlighted that the drop reflected global trends as worldwide VC deals fell from $95.5bn in Q2 to $70.1bn in Q3.

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