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European Tech Startups Breaking Records ...

European Tech Startups Breaking Records $34B in Capital

European Tech Startups Breaking Records $34B in Capital

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NetShop ISP · Blog Author

May 13, 2020 · Archive

The year isn’t over yet but it is clear that European tech startups are truly making waves with a venture capital funding worth $34 billion in 2019, according to The State of European Tech report. It also seemed like Europe is on track to reach an accumulated capital funding of $100 billion since 2015.

The data is interesting considering that for years, tech startups have generally been concentrated in the U.S. particularly in California with the presence of Silicon Valley and the San Francisco Bay Area as a whole. San Francisco actually has the most tech startups in the world. 

London has always been an important tech hub. In fact, the largest tech companies in Europe are situated in London. But what is new in the report is that Berlin and Paris are also making great contributions in terms of housing large tech companies as well as startups. 

Other important findings from the report are that there are 6.1 million professional developers in Europe this year compared to the 5.7 million in 2018. The U.S. only has 4.3 million professional developers this year. Although, it might not be wise to compare the two—it seems like an orange and apple comparison. Europe is a continent after all while the U.S. is just one country. 

More alternatives for tech startups

The takeaway from the report is not necessarily a competition between the U.S. and Europe. The reason the statistics for the two are being pitted against each other is because the U.S. is way ahead when it comes to tech developments. Other countries may argue that they have more advanced facilities but as a whole, the U.S. is so ahead of the game. This would include tech development as a whole—number of companies involved, number of people employed and profit made. 

But again, this is not a competition. This should be seen as an opportunity for tech people to branch out. Geeks who want to start their own tech companies don’t have to single out the U.S. for their tech opportunities; they can fly to any of the European countries with a bustling tech landscape. 

The reason why people should eye tech hubs for their startups is because all the facilities they need are there. San Francisco, London, Berlin, Los Angeles, Tel Aviv, Boston, Beijing and Singapore, among others, are considered tech hubs because these cities supply the demand of catering to tech companies. That includes having fast internet, reliable tech services and other necessary facilities in running a tech company.

Europe’s in the game now

According to experts, a lot of tech startups have opted to launch their companies in Europe because operating in the U.S. and even in Asia is getting expensive. Case in point: San Francisco. The city has among the highest median employment pay in the world. This is partly because the presence of tech startups and tech giants has improved basic pay in the city. However, the way of life in the city has also greatly increased. Housing and other important basic commodities are now getting very expensive. Operating a business is even more expensive. 

In Europe, there are generally lower valuations. This will result in a more practical capital investment. The fastest-growing segment is financial technology. Fintech contributes almost a quarter in the total venture capital fund reported by Europe. Fintech pulled in over $9 billion in venture capital funding. A lot of financial experts say that when it comes to fintech, Europe edges out the U.S. in terms of financing regulations, products and technology. Europeans, as a whole, are more advanced with it comes to financial practices. 

There are also more initial public offerings (IPO) in Europe than in the U.S. For this year alone, up until the September cut-off for the story, there have been 33 IPOs in Europe. There were only 29 in the U.S. Although, the IPOs in the U.S. are financially mightier, which means the U.S. posted more in terms of capital venture. 

The report is not really solidifying Europe’s edge in terms of tech startups, because the European credibility is already solid. The report merely affirms what tech insiders already know. In fact, even American and Asian investors are looking at expanding their tech ventures in Europe. 

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