According to a recent analysis by the British venture capital firm Atomico, European technology businesses raised a total of $41 billion in investments in 2020. Despite the pandemic and the economic misery it has brought, 2020 has been a historic year for European technology. The value of European technology businesses increased by 46% in only one year.
2020 is the temporary conclusion of years of growing interest in the European IT sector. European businesses now raise 38% of all initial financing. Over the last four years, the number of European tech employees has grown by 43%, and venture capital on the old continent has been steadily increasing.
Part of the European IT industry’s success may be attributed to the worldwide digital revolution, which has intensified in recent years and made tech businesses more profitable in general. Another significant factor is that digital technologies have enabled European enterprises to raise funds remotely and interact easily across the Atlantic. With the growth of distant culture, tech businesses are no longer obliged to have a significant presence in tech hotspots such as Silicon Valley but may instead use all distributed talent globally.
The Impact of European Tech Market on the World
A significant trend in the evolution of the European tech market is the entry of American VCs. American venture capital firms have grown more open to European startups where it is simpler to enter at an early stage and negotiate a favorable deal. Instead of investing in underperforming firms with weak unit economics, venture capitalists have gone across the Atlantic for excellent IT startups in Europe. As a result, there will be more investments in European technology and a greater valuation for these European tech businesses.
The European Union is also an essential part of this success story. The days of self-regulation in the technology industry are in the past, and owing to The Brussels Effect, the European Union can set the regulatory norm globally and influence the principles by which the market works. Examples include data privacy and GDPR, as well as the environmental agenda during the last several decades.
The Growth of IT under EU
By regulating the market in this manner, the EU, in a sense, establishes the rules of the game, allowing Europe to create an environment in which European firms can prosper. So far, the European Union appears to be the only agency willing and capable of setting the regulatory norm, which may be a significant benefit.
In general, Europe has become a more global digital hub as European governments have invested in cultivating a more productive environment for tech businesses to grow. Greater IT graduates equate to more talent for European companies. In addition, a stable and predictable political environment has allowed European firms to focus on their operations. Finally, the European Union and its member nations have demonstrated a political willingness to spend on public digitization and digital infrastructure.
What Sets The European Tech Country Apart?
Analyzing the elements of Europe’s innovation ecosystem and forecasting recent momentum into the future, we are confident that the Golden Age for European Tech has arrived and that a growing number of internationally dominant firms will emerge from Europe. Here’s why:
Talent Pool
As of September 2020, about 56 million developers were registered on GitHub. When we look at the geographical distribution, we discover that 27 percent are based in Europe, 35 percent in the United States, and 31 percent in Asia.
The majority of rankings agree that Europe generates world-class IT talent. According to Coursera’s 2020 skill level assessment, 14 of the top 15 nations with the highest tech skill levels (top quartile; includes AI, Java, C, or other coding languages) are located in Europe.
Technology Transfer Offices (TTOs)
Europe is home to the world’s most successful scientific institutes. However, there has been a problem: while we are equally adept at developing theoretical ideas and creative IP, most institutions have historically been poor in materializing these efforts and translating them into reality.
TTOs have become a vital element of the world’s premier research institutes to enable this interchange and harness the tremendous research potential. The European TTO Circle has shown that the quantity and quality of TTOs have greatly improved over time.
Capital Productivity
According to one study, European companies are more efficient when it comes to exit values over the unicorn threshold. Over the previous five years, European unicorns have returned around 11.9x the invested money, whereas Asian and US equivalents have returned 9.1x and 9.9x, respectively. Historically, capital restrictions in Europe drove entrepreneurs to become more efficient and do more with less.
Some of the Up-and-coming Tech Companies in Europe
KIarna
Klarna, founded in Sweden in 2005, makes the majority of its money from retailers, who give Klarna a percentage of the transaction price each time. Consumer late fees and interest make up an unspecified portion of its earnings, although the firm has been profitable for the past ten years.
The fintech just received a $10.65 billion valuation and plans to go public in the coming years. It currently covers the majority of Europe, as well as Australia and the United States.
Northvolt
Northvolt, a renewable energy business, raised $1 billion in funding in 2019. It is based in northern Sweden and was created by a former Tesla employee. It is constructing a lithium-ion battery cell plant to serve the world’s increasing fleet of electric vehicles — and maybe other modes of transportation.
Eigen Technologies
Naturally, the financial services sector is interested in natural language processing skills — and Eigen Technologies is a firm that provides just that. Since their inception in 2014, their clientele has included Blackrock, Allen & Overy, and one-third of all G-SIBs. In 2020, Goldman Sachs and ING led a $42 million Series B investment.
InfusAi
InfusAi is a world-class tech company rapidly finding its base in the European market because of its advanced staff augmentation, development solutions, and support services. The company caters to small and large businesses and even enterprises in managing their tech staff. They are a reliable partner for designing, developing, implementing, and maintaining AI-driven intelligent software applications, enterprise-level CRM, and ERP systems.
What Does InfusAi Offer?
Innovation and digital transformation are the two pillars that support InfusAi’s drive for growth in 2021. The company offers software development services that include solutions like Microsoft Dynamics 365 CRM & ERP solutions, smart Cloud services, and intelligent security architecture. They are also a leading staff augmentation service provider and one of the best support services in Europe.
The company is on its way to becoming a world player soon. Besides that:
● InfusAi is a Microsoft Gold Partner, providing end-to-end Microsoft Dynamics 365 services ranging from assisting you in kicking off your digital transformation drive to shifting and handling solutions spanning sales and marketing, exceptional customer service, field service, finance, and operations.
● InfusAi also provides appealing, seamless mobile app development solutions and sound technologies to deliver intuitive experiences.
● The company provides consistent customer experiences using powerful web application development technologies.
● With a comprehensive Google Cloud Platform, InfusAi assists in activating your data faster.
● InfusAi’s Salesforce consulting and developing services can help you scale your growth efficiently.
Conclusion
According to the study, founders and early employees of Europe’s top companies, such as Skype, Spotify, Lovefilm, and Klarna, are driving the next generation of startups, scale-ups, and unicorns.
This tech startup boom is fueled by the tendency of experienced founders to invest as angels in the next generation of tech firms and a fast-growing tech ecosystem.
