Industrial tech could be essential in unlocking climate crisis solutions. Following last year’s inaugural Industrial Tech report, we’ve once again teamed up with Speedinvest to track the dynamics and developments of a rapidly growing startup segment.
Key findings:
- The combined enterprise value of European industrial tech startups has grown by 120% since 2020 to reach €73.9B
- VC investment in climate-focused industrial tech has grown by 220% from 2020
- There are now 13 unicorns and $1B+ exits in European industrial tech with 4.1% of start-ups in the category classed as future unicorns, higher than the non-industrial tech total average (3.1%)
- Investment from non-VC investors including corporates, CVCs and beyond now accounts for 49% of total industrial tech investment, up from 35% in 2020
- European industrial tech investment from outside Europe has more than doubled in the past year to 56% in 2021 from 27% in 2020
Record value and investment
The combined enterprise value of European industrial tech startups has more than doubled in 2021 to reach €73.9B, driven primarily by the accelerating pace of late-stage investment as the sector matures.
VC investment is also at a record high for European industrial tech, with €3.8B raised in the 1- months of 2021, up from €1.5B in full year 2020, and on track to triple year on year.
There are now 13 unicorns and $1B+ exits in European industrial tech. 4.1% of startups are also classed as future unicorns which is higher than the average of 3.4% among VC-backed startups in Europe.
Mega-rounds have also become a significant feature of the European industrial technology investments ecosystem in 2021. Notable industrial tech funding rounds in the last 12 months include data processing company Celonis’ $1B Series D round, digital freight forwarder Forto’s $240m Series C round, and robotic solutions platform company Agile Robots’ $220m Series C round. This trend also points to the increasing availability of late-stage funding in the European ecosystem as the sector matures, further accelerating growth.
Leveraging Europe’s industrial legacy
International investors are taking ever greater interest in Europe’s burgeoning industrial tech ecosystem, with 56% of all funding now coming from overseas, up from 27% last year. And a diverse set of investors are getting involved; 49% of European industrial tech funding has come from investors outside of venture capital or corporate venture capital in 2021.
Countries with traditional strengths in heavy industry are also doubling down on the sector’s next generation solutions, with DACH and the Nordics among the most industrial tech focussed ecosystems. Germany has created the most industrial tech unicorns and future unicorns, while Norway and Finland have disproportionate levels of funding being directed to industrial tech startups.
Industrial climate tech
Industry has an enormous role to play in global decarbonization. But European venture firms have also been at the forefront of reversing this trend, with Lightrock, World Fund and 2150 VC behind some of the largest dedicated European climate tech funds announced in 2021.
European climate-focussed industrial tech startups have raised over €1B in 2021 for the first time, with this segment growing faster than both industrial tech, and startup investment overall.
With industrial processes accounting for more than a third of CO2 emissions in Europe, the startups working to digitize and decarbonize global industry are attracting the attention and aspiration of the world.