Europe is often viewed as a digital laggard, running far behind the frontier-pushing United States and Asia. In fact, according to a new report by the London venture capital firm Atomico, European startups are now taking the lead in artificial intelligence, building new tech hubs, and drawing investment from traditional industrial stalwarts. Last year, a record-setting $13.6 billion was invested in Europe's tech sector, compared with $2.8 billion in 2011. Gone are the days when Europe's "tech" sector largely comprised consumer-oriented e-commerce businesses – often blatant knockoffs of successful US companies. Today, Europe is the home of real pioneering innovation, led by what Atomico calls "deep tech" – the kind of artificial intelligence developed by Google's DeepMind.
"Now is the best time in history to be an entrepreneur in Europe." That is one of the banner conclusions from a new report, The State of European Tech, published today by VC firm Atomico and Slush, the organisation behind of the Finnish tech conference of the same name. The expansive report, which surveyed founders, investors and other members of the European startup community, details a changing Europe that still faces a wealth of challenges but whose ecosystem is maturing, putting the region in an ever-better position to take those challenges on. Invest Europe, LinkedIn, and several others, which further demonstrates that the environment for tech startups to thrive in Europe has been steadily improving since 2011. Despite ups and downs along the way, overall it's easier than ever for young tech companies to attract funding, find talent, and scale their businesses to the next level, the report shows.
The full Atomico team, assembled for their first group photo. As the European tech sector looks to add more of its own billion-dollar startup successes to the global ranks, one of its leading local VC firms has a major new fund to try to help. Atomico announced on Thursday it's raised its fourth fund for at $765 million, making it one of the largest funds ever for a European-based venture capital firm. The new fund is a significant increase in size from Atomico's third fund from 2013, which at $476.6 million was already one of the larger for the region. Standouts in the Atomico portfolio to date include Swedish ecommerce company Klarna, Supercell, which the firm exited along with other investors when SoftBank bought them out in 2015 at a valuation of billions, and The Climate Corporation, which Monsanto acquired for $1.1 billion in 2013.
In many respects, the U.K. is leading the way in innovation. London has demonstrated a noteworthy ability to attract talent and capital. That, coupled with Britain's pro-business policies and approach to regulation, makes it a model for other governments. London often sees itself as the financial capital of the world, and its policies position it to maintain that status. Because of the United States' much more aggressive regulatory environment, companies will likely continue to take advantage of Britain's unique position bridging the tech and finance worlds of continental Europe and the U.S. The State of European Tech 2017 report from Atomico and Slush reveals that the U.K. remains the largest European destination for capital invested in technology.
Europe has a fascinating array of data science companies transforming the world of business. Here are the ones to watch. When it comes to areas such as data science, artificial intelligence (AI) and other avenues of deep tech, Europe is killing it. Last November at Slush in Helsinki, Tom Wehmeier, partner and research director at venture capital firm Atomico, revealed how European start-ups are now producing more software engineers than their US counterparts, with 5.5m compared with 4.4m in the US. He noted that European tech firms such as Zalando and Spotify are absorbing the battle for talent by building their companies in a distributed way across Europe.