Drag

Let’s get in touch

Schedule a meeting with our Expert to discuss your needs and explore tailored software solutions.

Support center +91 9825 122 840

Logo
About

About Us

Rejoicehub LLP, a prominent offshore IT outsourcing firm, was established in 2019 and has been making remarkable strides in the IT sector.Our dedicated team of over 100 professionals is our greatest asset. Our unwavering commitment to excellence has made us a highly sought-after company globally. We prioritize understanding our clients perspectives to enhance their product development process. Our adept professionals are capable of providing top-notch solutions. We promise our clients to bring their unique ideas to the market in a more user-friendly manner. Punctuality is a cornerstone of our work philosophy, and we prioritize delivering exceptional quality.

Career

Career

We offer careers, not jobs

Becoming a part of Rejoicehub LLP could mark a significant turning point in your life, offering numerous benefits along the way. Its a second home where teamwork is prioritized to achieve our shared objective - continuous evolution with cutting-edge technologies while ensuring the well-being of our most treasured resources, our employees. Embrace the Positive Vibes and the significance of maintaining a healthy Work-life Harmony by collaborating with us.

SOLUTIONS

SOLUTIONS

Case Study

Explore Our Trending Case studies

Visualize yourself being in the place of those clients who are talking about their problems, victories and how our IT solutions was very important for them. From showing how workflow optimization or cybersecurity reinforcement can be implemented through a case study approach to explaining that collaboration and innovation is able to overcome any difficulty.

Technology

Technology

Starterkit

Starterkit

Blogs

Our Blogs

Our blog is packed with valuable resources to keep you ahead of the curve. Explore industry trends, discover hidden tech hacks, and gain expert insights to optimize your operations and stay on top of the latest advancements.

Contact

Let’s get in touch

Great! We are excited to hear from you and lets start something special together. call us for any inquiry.

At Rejoicehub LLP, we are deeply passionate about creative problem-solving, innovative thinking, and pushing the boundaries of brands. With each client, we bring forward a commitment to forward-thinking solutions that drive success in the digital age.

Venture funding in Europe fell to $45B in 2024, says Atomico

Date November 19, 2024

Writen by Ingrid Lunden

newsImage

Funding for European tech appears to have stabilized in 2024 after dropping precipitously in 2023, but the signs continue to point to more tough times ahead, according to the latest State of European Tech report. 

The annual survey, produced by European VC firm Atomico, notes that startups in the region are on track to raise $45 billion this year. While far from the 50% drop of 2023, the figure is still down by $2 billion compared to a year ago. Atomico originally projected $45 billion for 2023; it has since revised 2023 up to $47 billion.

The decline this year is slight but is notable because the narrative post-pandemic had been that the drop we saw in 2023 was simply a return to “normal” growth curves.

That narrative goes something like this: funding and other tech market indicators have been steadily rising for almost as long as they have been tracked. The years 2021 and 2022 were outliers, resulting from a burst of activity from more people using cloud, mobile and other digital services at home and at work during the pandemic, and thousands of companies and investors rushing to meet the opportunity. But by the end of 2022, it was clear that the “new normal” was not here to stay. So, things settled back to “old normal” and we are back on track.

Well, 2024 figures now show us we may need to rethink all that, again.

Atomico has been producing these reports annually for the last decade, so this latest edition makes a lot of noise about how much things have improved.

It’s undeniable that the tech ecosystem in Europe has blown up: Atomico says there are now 35,000 tech companies in the region that could be classified as “early stage,” with 3,400 late-stage companies and 358 valued at over $1 billion. Compare that to 2015, when there were a mere 7,800 early-stage startups, 450 late-stage startups and just 72 tech companies valued at over $1 billion.

Yet there is a lot of sobering reading, too, about some of the challenges of the moment and signs of how geopolitical and economic unrest — despite shiny stories about the boom in AI — continue to weigh down the market. 

Here are some of the breakout stats:

Exits have fallen off a cliff

This is one of the more stark tables in the report, underscoring some of the liquidity pressure that ultimately trickles down to earlier-stage tech companies.

Put simply, M&As and IPOs are relatively non-existent right now in European tech. This year, at the time of the report being published in mid-November, saw just $3 billion in IPO value and $10 billion in M&A, according to S&P Capital figures. Both of these are big drops on the overall trend, which had otherwise seen steady rises in both, “consistently surpassing the $50 billion per year threshold.”

Granted, sometimes all it takes is one big deal to make a year. In 2023, for example, ARM’s $65 billion IPO accounted for a full 92% of total IPO value, and clearly it didn’t have the knock-on effect many had hoped for in kick-starting more activity.

Transaction volumes, Atomico notes, are at their lowest points in a decade.

Image Credits:Atomico

Debt is on the rise

As you might expect, debt financing is filling in the funding gap, especially for startups raising growth rounds. So far this year, debt financing made up a full 14% of all VC investments, totaling some $4.7 billion.

That’s a big jump on last year, according to Dealroom’s figures: In 2023, debt made up just $2.6 billion of financing, accounting for 5.5% of all VC investments. Debt at its best is raised when companies are in strong financial positions and do not want to give up more equity to raise money to grow. The other side of the coin is when debt, often more easily raised than equity, is picked up because equity rounds are harder to come by.

So the big question on debt remains as ever: will all the companies racking it up definitely make good on paying it down?

Image Credits:Atomico

Average round sizes have improved

Last year, the average size of every stage of funding, from Series A to D, declined in Europe, with only seed-stage rounds continuing to increase.

However, amid the overall decline in the number of funding rounds in the region, the startups that are managing to close deals are, on average, raising more. The average Series A round is now $10.6 million (2023: $9.3 million), Series B is at $25.4 million (2023: $21.3 million), and Series C is at $55 million (2023: $43 million).

The U.S. continues to outpace Europe on round sizes overall. 

But don’t expect rounds to be raised in quick successions

Atomico noted that the number of startups, on average, raising within a 24-month time frame declined by 20%. It has also taken longer for companies to go from Series A to Series B in what the firm calls “compressed” time frames of 15 months or less — just 16% raised a Series B in that period in 2024. 

As you can see in the table below, the number of rounds this year is lower than what we saw the year before.

Image Credits:Atomico

AI continues to lead the pack

As with 2023, artificial intelligence continued to dominate conversations. Atomico spells this out with a graph showing the burst of AI mentions in earnings calls.

Image Credits:Atomico

That has been a strong theme among private companies. Between companies like Wayve, Helsing, Mistral, Poolside, DeepL, and many others, AI startups have led the pack when it comes to the biggest venture deals this year in Europe, raising $11 billion in all.

Even so, Atomico points out, “Europe has a long way to close the gap with the U.S. in terms of AI funding.” Thanks to outsized rounds for companies like OpenAI, all told, the U.S. is shaping up to have invested $47 billion in AI companies this year — that’s right, $2 billion more than all startup investment in Europe.

The U.K. (thanks in big part to Wayve’s outsized raise of the year in Europe, but also because it simply has more companies raising more rounds across more stages) is currently the biggest market for AI funding in the region, Atomico said.

Valuations are improving…

After startup valuations “bottomed out” in 2023, Atomico sees them rising again, lagging behind the slow return of activity in the public markets. Some of that is likely also due to the outsized rounds raised by certain companies in certain fields like AI.

More generally, it appears that founders are more open to dilution on larger rounds in earlier stages, which plays out as higher valuations. Startups raising at later stages are picking up the pieces of that earlier exuberance and are raising down-rounds, Atomico said.

European startups continue to see lower valuations than their American counterparts, on average between 29% and 52% lower, Atomico notes.

In the graph below, charting Series C, the average valuation of U.S. startups is $218 million, compared to $155 million for startups in Europe.

…but sentiment is not

If confidence is a strong indicator of a market’s health, there might be some work ahead for the motivators out there.

Atomico has been polling founders and investors annually, asking how they feel about the state of the market compared to a year ago, and 2024 appears to be a high-water mark for low confidence.

In a frank assessment of how founders and investors are viewing the market at the moment, a record proportion — respectively 40% and 26% — said they felt less confident than 12 months ago. 

Image Credits:Atomico

Work with us

We would love to hear more about your project

Let’s talk us