European tech funding stalls in 2024 but IPO window to open, report says

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By Anne Kauranen and Supantha Mukherjee

HELSINKI (Reuters) -Funding for European technology startups in 2024 is set to fall short of last year’s level, but a window for new listings is opening again, venture capital firm Atomico said in an industry report on Tuesday.

Europe has more than 350 companies valued over $1 billion. However, over the past decade only 15 European countries have seen initial public offerings of more than $1 billion, with almost half of them in Britain, data collected by Atomico showed.

Venture capital funding for emerging tech companies in Europe this year is expected to reach $45 billion (42.7 billion euros), below the $47 billion raised last year, Atomico said.

That is less than half the record $101 billion raised in 2021 but triple the amount seen in 2015, it said.

“We’re definitely seeing signs of (funding) growth in the second half of the year for 2024, so we expect to see 2025 to be an up year,” Sarah Guemouri, a principal at Atomico, told Reuters.

Despite the slump in funding seen in the most recent years, Tom Wehmeier, a partner at Atomico, pointed out that the number of startups in Europe had continued to increase throughout the past decade.

“The overall universe of companies … has grown 4.7 times in the last decade. That includes 35,000 early-stage companies, up 4.5 times in the last 10 years. That, by the way, is more early-stage companies than in any other region in the world,” he said in an industry documentary also released on Tuesday.

The number of IPOs has fallen in the past four years, and with 11 so far in 2024, it would be the lowest in a decade, the data showed.

“After a quiet period on the IPO front, there is a growing list of European companies that have voiced their intentions to go public,” Atomico said, citing UK-based fintechs Revolut and Zopa as well as Estonian ride-hailing company Bolt.

Earlier this month, Swedish payments company Klarna filed paperwork to go public in the U.S.

“Our analysis has identified more than 100 potential IPO candidates at or close to the necessary scale and maturity,” Atomico said, adding that more than a third of them had already hired a chief financial officer, which is crucial for a public listing.

(1 euro = $1.0543)

(Reporting by Anne Kauranen and Supantha Mukherjee; Editing by Emelia Sithole-Matarise and Paul Simao)