European venture capital is back to normal, early-stage holding up in 2023 vs 2022 and 2021

Atomico has released the latest update of State of European Tech.

Venture investments are down from 2021 and 2022, but the data indicate that 2023 is likely going to be the year with the third highest amount of capital invested, at several billion dollars more than 2020 and 2019.

One cyclical effect of boom times like 2021 and the beginning of 2022 are mega rounds. Those seem to have gone away in 2023, except for AI companies. Looking at early-stage investments (rounds smaller than $15 million), the year-over-year drop is much lower (maybe 10-15 % from $19 billion to $16 billion for the full year).

One interesting datapoint from a Swedish and Nordic perspective is that startups in each country haven’t attracted a lot of capital (e.g. less than Swiss and Dutch startups), but as a group the Nordics seem to get into fourth place behind the UK, France and Germany.

My guess is that the lead of the UK and France in particular will get increase in 2023 as they are stronger when it comes to AI with the heritage of DeepMind in the UK and Meta’s AI operations in France.

Author: Henrik Torstensson

Partner at Alliance VC. Investing in Nordic early-stage tech startups.

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