Barcelona is the fourth city in Europe where more is invested in start-ups
The European technological ecosystem will close 2017 with a record of 19,000 million dollars (some 16,000 million euros) invested in start-ups (in 3,449 operations), 32.5% above the 14,400 million of the previous year (in 3,720 transactions). In 2012, the investment was 4,100 million in 1,276 operations. This data has been collected by the Atomico investment fund in its third annual report on the technological panorama in Europe, and whose conclusion is that the ecosystem is “stronger than ever”. The figure, however, is still far from the US, where in 2016 emerging companies of this type raised 71,000 million dollars in 8,500 operations.
The United Kingdom is the main recipient of these investments (5,400 million), followed by Germany, France, Sweden, and Spain (800 million, including the sale of Social Point and the Cabify round). And for cities, in 2017, Barcelona is the fourth city in whose start-ups more has been invested (722 million dollars), behind London (5,080), Berlin and Paris; the positions are the same according to the number of operations.
“Europe is building its own system, defined by a deep technological knowledge, an incredible geographical diversity and a unique collaborative approach with traditional industry,” Tom Wehmeier, partner and head of research at Atomico, explains in the presentation of the report. The fund was created in 2006 in London and specializes in disruptive projects, mostly in Europe but also in America and Asia (among its investments are Hailo, Jobandtalent, Ontruck, Skype, Viagogo, Jawbone, Gympass). In this last sectorial report, Atomico considers that the European ecosystem is based on a broad and solid talent pool, with global ambitions and a growing investor base; that is why Wehmeier ensures that doubts can be ruled out if Europe can produce world-class innovation or billion-dollar companies (so-called unicorns, of which there are 41 in Europe, such as Spotify, Zalando, Supercell, Skype or Blablacar). In his opinion, “the probability that the next company that causes a new disruptive business model to be European and becomes one of the most valuable companies in the world has never been so high”.
The report has been prepared based on 3,500 responses obtained in September and October and 50 qualitative interviews with leading actors in the ecosystem, “not only in traditional hubs such as London and Berlin, but also in Seville, Sofia or Reykjavik.”
The investment record is not the only indicator of the sweet moment of the sector. The European technology industry is creating employment at a rate of 2.6%, well above (more than triple) the 0.8% annual growth of employment expected this year in the EU.
In this scenario, however, Atomico has also detected some black point: in the start-ups supported by risk capital, only 9% of the management positions are occupied by women (6% of female delegates, 2% of directors of technology, 23% of marketing directors). The same problem is experienced by the venture capital industry, where women only occupy 13% of executive positions. Interestingly, Atomico has found that an absolute majority of respondents believe that gender diversity is well reflected in their company. 95% of the founders of companies in Europe are men.
“The key question is to know how strong is the creation of technological talent in Europe,” asks Atomico. Remember that Europe is home to half of the ten best science institutions in the world, and that in Europe graduated twice as many doctors in science, technology engineering and mathematics (STEM), a total of 58,941, than in the United States ( 28.328). This technical strength is accompanied by a business approach: according to the study, one in five MBAs will work in the technology industry.
The growing competition of the industry in Europe has an effect on the salaries of software engineers (see table below), which is, by far, the specialty where it is more difficult to attract talent. Europe has 5.5 million software developers, compared to 4.4 in the United States. By countries, Germany has surpassed the United Kingdom (813,000) and leads the ranking with 837,000. Further away are France, Russia, Holland, Italy, and Spain is seventh with 268,000. For cities, London is the largest hub for software developers, followed by Paris, Moscow, Madrid and Berlin; Barcelona is the 14th square. On the other hand, Barcelona is the third city preferred by entrepreneurs to create a new start-up, only behind London and Berlin.
A differential feature of the European technology sector is its ability to organize events: just over 8,000 events were held in 2012, and almost 63,000 in 2017 (that is, 172 events every day throughout Europe). The United Kingdom is the most active country (195,000 active members of the events), and Spain is the fourth country (70,151 usual attendees).
Atomico has found that 90% of the founders of European start-ups are optimistic about the future of the ecosystem (the British, for the Brexit, are the least convinced).
The relationship with traditional industries
From the point of view of capital, Europe attracted 2,000 different investors in 2017 (four times more than in 2012), of which 580 were corporate investors: “In Europe the idea is supported that start-ups Technology needs stronger links with traditional industry, “says the Atomico investment fund in its latest report. For traditional industries, supporting start-ups is still a way of defending their market positions. In addition, more than 200 American investors are already operating in Europe, and Asians have invested 1,800 million dollars in Europe in more than 100 operations. However, in Europe the role of public financing in the early stages of companies is still significant. Regarding sectors, artificial intelligence and blockchain
These are the areas in which Europe considers itself to be the best positioned worldwide.
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