European Tech in 2023

Key Takeaways for European VC in 2023:

• European startups raised $63 billion invested across over 10K funding rounds, down 37% on 2022.
• Frontier tech and physical tech investment is on the rise, making up nearly half of VC in Europe in 2023.
• European share of Global VC investment is at a record high at 19%, up 2x in 5 years.
• National level VC investment from 2022 to 2023 fell in all but four European countries: Denmark, Macedonia, Bosnia & Herzegovina and Ukraine.

The below acts as a summary of the key numbers to note in 2023 for the European startup ecosystem.

$63B was raised across over 10k funding rounds by European startups, down 37% against 2022 levels.

• Early stage investment reached $17.4B, up 20% on pre-pandemic levels in 2019 though down 19% on 2022.
• Breakout stage investment was $24B, up 26% on pre-pandemic levels in 2019 though down 31% on 2022.
• Late stage investment reached $21.5B, up 45% on pre-pandemic levels though megarounds saw the sharpest decline compared to other funding round sizes, down 51%, both in volume and round count.

The UK, France and Germany raised the most VC investment in Europe in 2023.

• The UK, France and Germany raised the most VC investment in Europe in 2023, in the same order as 2022.
• Sweden shows one of the greatest degrees of VC investment resilience of the top 10 European hubs for, falling only by 12% compared to the average of 33% in the top 10.
• Norway and Denmark leapfrog Ireland and Italy to climb into the the top 10 European countries for VC investment raised in 2023.
• Benchmark European VC investment at country, provincial or city level here on the Dealroom platform.

London, Paris and Stockholm startups raised the most VC investment in 2023

• London raised 65% of total VC investment across the UK in 2023, down from 70% in 2021, as a result of selected megarounds raised for startups based in Birmingham, Bristol and Cambridge. Energy tech providers such as Zenobe Energy and Octopus Energy were amongst the largest rounds coming out of London this year.
• Paris maintains second position for VC funding in Europe, raising 57% of total French VC funding in 2023. GenAI model startup, MistralAI, raised the largest funding round in the Paris metropolitan area in 2023.
• Stockholm overtook Berlin to claim third place for the most funded VC hub in Europe thanks in part to megarounds into clean energy tech startups such as H2 Green Steel and Northvolt.

Frontier and physical tech startups are on the rapid rise in Europe

• The leading segments raising the most VC investment in 2023 include Electric Mobility, EV Battery and Green Building startups.
• The largest funding rounds for the year of 2023 included clean energy startups H2 Green Steel, Northvolt and Zenobe Energy.
• Explore the leading segments raising the most VC investment in Europe here on the Dealroom platform.

Europe's share of global VC reached a record 19.5% in 2023, which has doubled since 2018.

• Europe's influence on the global startup ecosystem is growing, doubling in its share of global VC in just 5 years.
• This trend can also be observed at an early and breakout stage funding round level, both on a similar rise over the past 5 years.
• Meanwhile, China saw a rise in share in VC investment after experiencing decline since 2020. China's rise in share of global VC investment bucks the trend seen in the rest of Asia.
• Explore the live data here for VC investment by destination on the Dealroom platform.

European VC is pivoting into physical tech startups and away from SaaS startups

Physical Tech / Manufacturing startups include those making physical goods to sell, as opposed to software, for further information on our proprietary tech taxonomy, please review this live Guide here.

• Manufacturing startups in Europe raised $26.1B, nearly more than all European SaaS and Marketplace combined for the year.
• Notable European Manufacturing startup funding rounds in 2023 have included the likes of Northvolt (battery tech), Ynsect (alternative protein), Isar Aerospace (sustainable rockets), CMR Surgical (surgical robots), Kandou (semiconductors), and Pasqal (quantum computing).

Only 4 countries in Europe witnessed growth in VC investment in 2023 against 2022.

• While the European average of VC investment fell by 39% across the continent, some startup ecosystems were harder hit than others.
• On the other hand, mega and breakout rounds into Denmark's health startups such as Hemab Therapeutics, NMD Pharma and IO biotech helped the country's ecosystem buck the continental trend.

Related Content

Taxonomy: To learn how Dealroom defines its entities, taxonomy, filters and more, click here

European Tech Guide: all the need-to-know stats and trends in technology, innovation and entrepreneurship for the European startup ecosystem, visit our dedicated Guide here

European ecosystem reports: Read our regular reports on European startup ecosystems here.

European startups: Explore 90k+ funded startups headquartered in Europe