European startups net funding of $100 billion in 2021. Then what are the predictions for 2022?

December 31, 2021 | 3 minutes read

Europe is now home to 321 billion dollars “unicorn companies”. So what are predictions for 2022?

European startup’s landscape has reached the funding worth $100 billion according to the report from venture capital firm Atomico. This amount is approximately three times the $41 billion of capital raised in 2020.

This is the first time European start-ups have raised more than $100 billion in a single year. The figure point towards the surging interest from investors in the continent’s rapidly expanding industry.

Startups That are Going to Grow In 2022:

Information Technology (IT) in Europe is forecasted to reach $1.3 trillion US dollars in 2022. Especially in terms of software and app development.

According to the news report from Maddyness, the go-to magazine for entrepreneurs and innovators. The climate crisis in 2022 will intensify and carbon reduction will occupy the lion’s share of the efforts surrounding climate change. Many startups have chosen to focus on carbon capture, carbon auditing, carbon offsetting, and reduction. For instance, Tree planting schemes that fall under carbon offsetting are run by Ecologi and Treeapp.

The startups in these areas are mostly in their early stage and face considerable challenges in increasing and consolidating their operations. However, the collaboration between startups and large industrial players can become vital in accelerating carbon capture and upcycling technologies.

Like climate tech plus fintech startup Amplify, which allows sustainable brands to register on their platform. And also enables their customers to earn a free donation for the climate charity of their choice on every purchase

Therefore,  predictions are there that retail giants are going to explore their future with the metaverse in terms of communication and selling strategies. 

In addition to this, the startups developing solutions especially in the niche of NFTs, Augmented reality, or other technologies relating to extended reality can garner a lot of attention. Thus, gathering a large number of investments. They might also be successful in getting corporate attention.  

The Atomico head of insights Tom Wehmeier told CNBC that 

“It’s been a defining year for European tech. I think what we’ve seen in the numbers is that European tech is creating value faster than ever.”

The findings from data firm Dealroom and Atomico’s latest annual “State of European Tech Report” states that in public and private markets the European tech companies have surpassed $3 trillion for the first very time in 2021. It took us decades to get to the first trillion in equity value in technology from Europe.” 

Wehmeier further said:

“We got to that milestone only three years ago, in December 2018. And then we went from $1 trillion to $2 trillion in 24 months, and then this year, the most recent trillion has been added in eight months.”

All Is Not Rosy…There are challenges ahead:

The small startups may face squeezed growth because the venture-backed companies attract record-level funding in Europe. Thus, choking space for small ones. This trend may continue in 2022 too. 

Diversity meanwhile has remained the key issue this year . According to Atomico, only 1.3% of venture capital funding in Europe goes to startups initiated by ethnic minorities. Another bump for the European startups is the allocation of pension funds. As the European pension funds earmark less than 0.02% of their $3 trillion for venture capital funds.