Europe’s tech sector is on track for a record level of investment this year but poor access to late-stage capital is keeping it from creating independent tech “gorillas”, one of the region’s most active investors said.
Europe is expected to hit €12.8 billion in tech investments in 2016, up from €11.8 billion in 2015 and almost five times the level five years ago, venture capital firm Atomico said in a report released at the Slush tech start-up conference in Helsinki, Finland.
New hives of activity are popping up outside the main tech hubs in places such as Munich, Zurich, Copenhagen and Lisbon, with money flowing into industries ranging from music and FinTech to fashion and food.
Trends
Five of the world's top ten technical universities are located in Europe and the region also appears to have an edge over the United States in software development.
Stack Overflow Developer Insights, which tracks programmer trends, reckons there are 4.7 million professional tech developers in Europe versus 4.1 million in the US.
Atomico estimates Europe needs to close a €23.6 billion funding gap with the US. Allocating just 0.6 per cent of European pension funds, which manage some €3.85 trillion, to the tech sector would close that gap, it said.
Mattias Ljungman, who created Atomico with Skype co-founder Niklas Zennstrom, remains hopeful that tech gorillas will emerge in Europe.
“I don’t think we should be surprised if, over the next 10 years, we should be looking at outcomes that are tens of billions and making their way up to hundreds of billions,” he said.
– (Reuters)
