European industrial tech – bucking the trend in 2022

An emerging sector that has tripled in value in three years, Industrial Tech now attracts almost $6B in funding each year, and has nurtured startups with a combined value of over $100B. In the third annual edition, the State of European Industrial Tech report in partnership with Speedinvest explores the trends and fundamentals of an important sector, the key countries incubating disruption, and the role of industrial tech in the climate emergency.

Bucking wider market trends, Industrial Tech startups are on track to raise more funding in 2022 than in any previous year, this in front of a backdrop of large-scale pull back in VC deployment in general.

Industrial tech is holding up strongly

Industrial Tech is at an earlier stage of development than sectors like Fintech and Health, but is among the fastest growing sectors in terms of VC investment this year.

With $4.7B raised so far, VC investment in European Industrial tech in 2022 is on track to surpass the record set by 2021. Logistics has been the largest segment both by the amount invested and the number of rounds, followed by robotics and energy.

What role corporates play in industrial tech

The corporate sector is playing an ever more important role in industrial tech. Corporate investment in European industrial tech has reached $802M so far in 2022, doubling the 2020 level and also on track to surpass the 2021 levels.

Climate tech continues to gain traction

Industrial tech can also play a key role in solving the climate crisis. Industrial processes account for more than a third of CO2 emissions in Europe.

Investment in climate-focussed industrial tech startups has reached $1.1B so far this year, across startups in every industry segment, with logistics leading, followed by energy and advanced materials.

European investors have also been raising dedicated climate tech funds for future deployment. There are now over 60 climate specific funds in Europe, with over $4B raised in dry powder since the start of last year.

"More ambitious policies regarding renewable energy need to be implemented to meet the 2050 climate goals. The demand of flexibility services is only going to grow to help this uptake."

European Industrial Tech still has wide room to grow. A third of the global economy is industrial, representing $23 trillion in output and a major digitization wave is underway.