Investment in European tech startups rebounds with new funding, bigger deal activity

(MENAFN) After experiencing a two-year dry spell in investment, European technology startups are witnessing a resurgence, with early-stage deal-making on the rise and venture capital investors securing new funds. Crendum, known for backing successful ventures like Spotify, Klarna, and Depop, recently announced a €500 million investment fund, joining the ranks of European-focused private Technology investors securing fresh capital for startups this year.

This fundraising effort follows similar moves in the industry, including Accel Europe's launch of a USD650 million investment fund last month. Plural, based in London and Tallinn and specializing in "deep technology" startups, also raised a fund of €500 million, with an additional €100 million added last month after the initial closure in January. Karl Fritjofsson, general partner at Crendum, highlighted the speed with which the funding was raised, underscoring a significant shift in sentiment, appetite, and activity across the industry.

European startups faced cost-cutting measures as venture capital dried up due to inflation, high interest rates, and geopolitical tensions, leading to a sudden halt in the post-pandemic technology investment boom. However, venture capital investors note that the market began to shift in the early months of 2024, coinciding with startups' increasing focus on artificial intelligence and the robust valuations of major technology firms on Wall Street.

Tom Wehmeyer, who leads the analytics team at Atomico, one of Europe's largest venture capital firms, remarked on the emergence of "green shoots" signaling a rebound. He suggested that after the decline witnessed in 2023, private technology investment in European startups is poised to grow again this year. Wehmeyer emphasized the market's increased activity compared to pre-2021 levels, highlighting three consecutive quarters of rising investments in "second financing cycle" deals. This resurgence indicates a shift from recovery to a period of sustained growth in the European tech startup ecosystem. 



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