Atomico report details signs of resilience in European venture this year

The venture slowdown has long been established to be a global phenomenon, and per a new report from VC firm Atomico, this “adjusted market reality is here to stay.”

Based on Dealroom and Crunchbase data, Atomico predicts that if things stay the same, the amount of capital invested in European startups this year will be 52% lower than in 2021.

That’s a clear decline, but it isn’t much worse than what we are tracking in other major regions.

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We should note that the report comes with a caveat: It doesn’t include Israel, which is often included in many European data venture data summaries, and also excludes biotech, secondaries, debt or lending capital. Some of those sectors and funding avenues have been on the rise lately, which makes their exclusion notable. However, the geographic, sector and funding-type restrictions are consistent with prior Atomico reporting, meaning we have a solid basis for historical comparison.

Many of the same problems present in the United States are also showing up in Europe, such as infrequent exits and a dead IPO market. But we already knew that.

So, instead let’s look at recent European venture capital totals and see if there is cause for optimism despite yet another decline in anticipated funding levels.

The bad news isn’t actually that bad

Atomico reports that European tech investment volumes are tracking at around half of 2021, set to reach $51 billion in 2023, compared to $106 billion two years ago.

But that comparison isn’t that useful given 2021 was such a big outlier. We’re more interested in how 2023 will compare to years when the funding climate wasn’t so inflated.