HSE club

Tragic: The total market capitalization of European tech companies has fallen to $2.7 trillion this year

By: Abraham Dec. 07,2022

 HSE club News on December 7, according to CNBC, according to venture capital firm Atomico, the European technology industry has lost more than $400 billion in value this year.

House understands that Atomico said Wednesday in its annual "State of Europe of Technology" report that the total market capitalization of all public and private tech companies in Europe has fallen to $2.7 trillion from a peak of $3.1 trillion at the end of 2021, and these figures highlight the difficult situation of the tech industry over the past year.

Tom Wemmell, partner at Atomico, said: "It has been a difficult year, with the Russia-Ukraine war, inflation, interest rate hikes, geopolitical tensions across the continent, the most challenging macroeconomic environment since the global financial crisis. ”

In Europe, some companies have seen a cliff-like decline in their market capitalization. Swedish buy-now-pay group Klarna reduced its valuation from $45.6 billion to $6.7 billion. Meanwhile, shares of music streaming service Spotify have fallen by more than 60% in the past year.

Overall venture capital for European startups is expected to fall to $85 billion this year, based on quantitative data and surveys in 41 countries, according to Atomico's report. That's down 18% from the more than $100 billion raised by European startups in 2021. However, Atomico said this is the second highest amount of investment in Europe's tech ecosystem to date. European tech investment broke records last year as participation from U.S. investors surged to new heights.

This year, the trend has reversed, with foreign investors tightening sharply. In "huge financings" of more than $100 million, the number of active U.S. investors is down 22% from last year.

Atomico said that in the first half of 2022, Europe's tech sector was in full swing, and investment levels were still 4% higher than in the same period in 2021. However, investment slowed from July to August and September decelerated further. Since then, monthly investment levels have averaged around $3 billion to $5 billion, in line with 2018 levels.

The pace of unicorn creation has also slowed, with the number of new unicorns born in 2022 over $1 billion falling to 31 from 105 last year.

At the same time, IPOs have all but disappeared. According to Atomico, there were only three tech IPOs with a market capitalization of more than $1 billion worldwide in 2022, two of which occurred in Europe. In 2021, there were 86 such IPOs.

Europe has not been spared the wave of layoffs in the tech sector. Europe-based companies have cut more than 14,000 jobs this year, accounting for 7 percent of all layoffs worldwide, the report said.

Disclaimer: The pictures are from the Internet,
if there is any infringement, please contact to delete.
Related tags
Related articles