European tech industry faces 18% decline in VC funding

The combined value of public and private tech firms in Europe fell to $2.7 trillion from $3.1 trillion in late 2021, according to a report from venture capital firm Atomico.
VC funding for tech
The European tech industry has also faced an 18 percent decline in venture capital funding.

High interest rates, the war in Ukraine, and a shrinking talent pool were among the reasons cited for the drop.

Market pressures forced a number of European companies to raise funds at a discount to their once sky-high valuations. For example, Swedish payments firm Klarna Bank raised $800 million at a valuation of $6.7 billion, an 85 percent drop from its 2021 price tag of $46 billion.

Venture capital funding in Europe was down to $85 billion for the year, based on data collected across 41 countries, an 18 percent decline from the $100 billion raised in 2021.

The number of new unicorns – firms valued at $1 billion or more – also fell this year, down from 105 to 31 in 2022.