Atomico: European startups are on track to raise $45B in 2023, down from $85B in 2022; just seven unicorns are expected in 2023, vs. 48 in 2022 and 108 in 2021
The downturn in the technology sector — dragged by inflation, higher interest rates and geopolitical events — continues to persist …
The significance is not merely lower capital volume: the expected drop in new unicorns signals that the financing reset is reaching company valuation and scale-up formation, not just deal pacing.
First-order effects
European startups seeking growth rounds face a smaller funding pool in 2023, while the number reaching unicorn status is expected to fall to seven.
Atomico’s report resets the near-term benchmark for European venture activity from 2022’s $85B and 48 unicorns to $45B and seven, respectively.
Second-order effects
Founders and existing investors are likely to put greater emphasis on financing durability and capital efficiency, as fewer companies can rely on large late-stage rounds to sustain expansion.
A thinner cohort of newly valued unicorns reduces the immediate supply of high-profile late-stage investment opportunities, concentrating investor attention on a smaller set of companies.
Third-order effects
If fundraising remains near this level, Europe’s startup market may shift from the 2021-era rapid valuation creation toward a more selective scale-up pipeline; later Atomico coverage showing another $45B funding outlook for 2024 is consistent with persistence rather than a quick rebound.
The durable issue becomes whether European companies can maintain paths to scale with fewer large private financings, making capital concentration a more important feature of the ecosystem.
The trend: European venture funding is moving from a record-era expansion toward a more selective, capital-constrained scale-up market.
Regulation, and specifically #AI regulation, is perceived as one of the greatest challenge to the EU #tech ecosystem for the year ahead - according to @atomico's State of European Tech 2023 report: https://stateofeuropeantech.com/. Looking at you, #AIAct, #EUCS, #CyberResilienceA…
The 2023 State of European Tech Report is LIVE! The highs, lows & data plus the story of EU #AI in the words of those building it @JonasAndrulis @roxannevarza Jarek from @DeepLcom @SarahKerruish @arthurmensch @andreascleve @kbeguir & @OpenAI's Mira Murati https://www.stateofeurop…
Atomico's latest State of European Tech is out - and it features a new view interview with @miramurati by @Bryce_Keane https://stateofeuropeantech.com/
Last night, I was invited to a sneak peak of The 2023 State of European Tech Report capturing the resilience of EU tech. It's LIVE this morning and I shall be having a read. Huge thanks to those who worked hard to put it together. @HSBCInnovation @atomico @Orrick [image]
“According to the report, Europe is on track to raise approximately $45 billion in capital this year. While this figure is a notable decrease from the heady days of 2022's $82 billion and 2021's record $100 billion, this year's number is the third-highest figure on Atomico's... […