The State of European Tech Report has highlighted the need for the region to ‘define its future on its own terms’, going forward.
Atomico has today (19 November) released The State of European Tech Report, which is an exploration of the continent’s booming technology sector and the factors dictating its future.
Noting the region now has “more founders starting companies in Europe than the US”, optimism within the European technology space was shown to have reached new heights over the course of the last decade, as 50pc of respondents to Atomico’s survey expressed feelings of increased optimism and hope looking forward.
The report said technology in Europe “isn’t a ‘catch-up’ story anymore. In a world beset by volatility and economic fragmentation, Europe offers something unique, stability, purpose and trust.”
From a valuation of $1trn 10 years ago, Europe’s technology ecosystem is now valued at roughly $4trn, making up around 15pc of the continent’s GDP, a figure that is up from just 4pc in 2016. VC funding was also shown to be up 7pc in 2024, to be valued at $44bn.
While the US has also had a strong 2025, the report suggests that other regions, for example Europe and Asia and the wider world, have shown more consistency. It said, “All saw broadly stable levels of capital deployed, with year-on-year changes remaining in single digits in all three regions, an indication of markets that have moved steadily rather than surged, in contrast to the US.”
The report finds that European pension funds, when compared to other regions globally, are somewhat “underweight” and under invested in, however, there is a marked improvement as European pension fund allocations rose by 55pc from 2023 to 2024, from $650m to $1bn.
Overall, the report states that the conditions for starting a company in Europe are improving, with 42pc of respondents agreeing that becoming a tech founder in Europe right now is a more attractive option today than it was a year ago. Compared to roughly a quarter in 2023 and 2024, many of whom actually argued that the ecosystem had worsened.
Commenting on the report, Eric de Montgolfier, the CEO of Invest Europe, said, “Founders and investors are looking at Europe with fresh eyes as the continent stands out for its stability and predictability, as well as its goals for tech sovereignty and growth.
“VC in Europe has undergone a step change over the last decade and still has much more potential to unlock. Invest Europe fully supports and echoes Atomico’s ambitions to strengthen Europe’s VC ecosystem and is actively working with policymakers to create the conditions for start-ups to flourish.”
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