What’s going on here?

As venture capital tightens its purse strings in 2024, European tech startups are experiencing a slowdown in funding, though over 100 firms are gearing up for market debuts through IPOs.

What does this mean?

Venture capital funding for European tech is projected to reach $45 billion in 2024, a slight decrease from last year’s $47 billion but a strong rise from 2015’s $15 billion. This downturn follows a peak in 2021 when funding hit $101 billion. Nevertheless, there’s momentum building for public offerings. Europe, home to over 350 unicorns, has seen nearly half of significant IPOs in the past decade occur in the UK. Prospective candidates like fintech leaders Revolut and Zopa, along with Estonia’s Bolt, signal an emerging IPO wave. Klarna’s filing in the US furthers this narrative. Atomico notes that more than 100 European firms have IPO potential, with a third preparing by appointing chief financial officers to steer them public.

Why should I care?

For markets: New IPO wave poised to renew investor interest.

With only 11 IPOs so far in 2024, market activity has been slow, yet incoming listings from key names like Klarna and Revolut hint at a comeback. This could ignite investor interest and channel fresh capital into European markets, particularly in fintech and mobility sectors. Watch these initial public market moves that might pave the way for a vibrant 2025.

The bigger picture: IPO revival signals shifting economic gears.

Europe’s tech landscape is set for transformation as it shifts from a venture-capital-heavy model to expanding into public markets. This change indicates an adaptation to global economic shifts and a chance for sustained growth despite past hurdles. Companies embracing IPOs might redefine the region’s economic scene, fueling innovation and competition.