Atomico - State of European Tech 2023

According to the report, several key trends and insights can be derived. Firstly, it is anticipated that more founders will return to the market in the second half of the year, which will sustain investment volumes. However, this may also lead to more down rounds and consolidation within the industry. Despite this, the quality of talent at both the founder and operator level is expected to strengthen, as there will be fewer but higher quality new companies being created. The report also highlights the challenging macro conditions that persist, but it suggests that this reset has created a healthier ecosystem as the industry has been stripped back to its first principles. Additionally, there is optimism that the exit market could re-open towards the end of the year, potentially providing an IPO window in Q4. There is a strong pipeline of companies waiting for this opportunity. Furthermore, the report mentions an AI supercycle that is expected to drive a golden age of innovation. European tech is expected to play a significant role in this, with the potential for substantial value creation. This indicates a positive outlook for the European tech industry. In terms of global capital invested in sub-$5m rounds, the report reveals that Europe is closing the gap with the United States. In 2018, the US accounted for 60% of the share, while Europe accounted for 30%. However, by H1 2023, the US share decreased to 45% while Europe's share increased to 38%. This suggests that Europe is gaining ground and becoming a more attractive destination for investment in smaller rounds. Overall, the report provides insights into the current state of the industry, highlighting both challenges and opportunities. It emphasizes the potential for growth and innovation, particularly in the European tech sector.