Technology investment in Europe is reportedly booming after a long period of dormancy.
The turnaround was the subject of a report in the Financial Times on Monday (June 3), which noted that venture capital groups are raising new funds after a two-year funding drought and are seeing an uptick in deals in early-stage companies.
For example, private tech investor Creandum, which has invested in Klarna and Spotify, has reportedly just announced a $544 million fund, following similarly sized deals by Accel Europe ($650 million) and Plural ($544 million, €500 million).
Clendam’s fund was raised in “record time,” general partner Carl Fridtjofsson told the Financial Times.
“We’re seeing a dramatic shift in sentiment, appetite and activity across the industry,” he said.
Investment in Europe’s tech sector fell sharply last year. British venture capital firm Atomico, in its annual “State of European Tech” report released late last year, predicted that European tech startups will raise around $45 billion this year, compared with $82 billion in 2022.
But things have since turned around, Tom Weheimer, who heads Atomico’s insights team, told the Financial Times in an interview.
“The burden of the peak has not yet been fully lifted, but there are green shoots everywhere,” he said. “We are past the recovery period and getting back into the growth period.”
He predicted that private technology investment in European startups would start to increase again this year, following a decline last year.
“The market is more active than at any point prior to 2021,” he said, noting that investment in “Series B” deals has increased for three consecutive quarters.
Meanwhile, PYMNTS recently wrote about how the venture capital world is leveraging artificial intelligence (AI) as a tool to make smart investment decisions. The technology quickly analyzes vast amounts of data about startups and market trends, helping venture capitalists find the most promising opportunities and make more informed decisions about where to put their money.
“The utility of AI in venture capital is augmenting human capabilities with machine intelligence to sift through the noise and accurately identify real opportunities,” Steve Brotman, founder and managing partner at growth investment firm Alpha Partners, told PYMNTS.
“AI allows us to analyze market trends, startup performance metrics, and other important data points at a scale and speed that simply cannot be achieved by teams of human analysts alone,” he added. “This increases efficiency and provides deeper insights into potential investments that were previously unimaginable, fundamentally enhancing our ability to make informed strategic decisions.”
