Investors revive enthusiasm for European tech start-ups
Green shoots are appearing for Europe’s technology start-ups after a two-year investment drought as deal-making picks up among early-stage companies and venture capitalists raise new funds. Creandum, known for backing Spotify, Klarna, and Depop, announced a €500mn fund, joining other European-focused private tech investors securing fresh capital this year.
The fundraising spree, including Accel Europe and Plural, signals a renewed sense of optimism in the community. The sentiment shift is highlighted by the rapid success in securing investments, with Creandum’s fund being raised in record time, according to general partner Carl Fritjofsson. This positive trend reflects a significant transformation in the industry’s sentiment, appetite, and activity.
Following a brief slowdown due to inflation, rising interest rates, and geopolitical tensions, the tech investment landscape is rebounding. European start-ups witnessed a drop in VC funding, forcing them to cut costs and navigate challenging market conditions. However, a recent surge in interest in AI start-ups, combined with strong Big Tech valuations on Wall Street, has reignited the sector’s growth potential.
According to Tom Wehmeier from Atomico, Europe’s venture capital activity is on the path to recovery and growth, with the market showing signs of increased investment in Series B deals. Sabina Wizander, a Creandum partner, noted that more quality companies are seeking investment amid a more predictable fundraising environment.
While the fundraising environment has improved, some challenges remain. Atomico is finalizing its largest-ever capital raise, reflecting investor caution around funds directed at later-stage companies amid limited successful IPOs. However, the overall outlook remains positive, with Silicon Valley investors like Andreessen Horowitz and IVP expanding their presence in Europe.
The success of firms like Creandum underscores the potential for European venture capital groups to rival their Silicon Valley counterparts. As the industry continues to evolve, there is growing confidence in the region’s ability to generate significant returns and foster innovation in the tech sector.
