EU funding powers 10% of European startup ecosystem, study finds

About 1 successful each 10 European startups that person raised VC finance are besides backed by an EU assistance of equity financing, according to a investigation task conducted by Dealroom and Dealflow.eu. While nan full report is expected to beryllium published later this year, nan authors presented a fewer preliminary numbers successful Warsaw past week.

In financial terms, nan 10% stock translates into EU-backed startups having raised €70bn successful VC backing since 2010, aliases immoderate 11% of full backing successful Europe (which successful this lawsuit includes nan EU, Switzerland, Norway, UK, and Israel). With immoderate €400bn successful full endeavor worth (that’s not including Arm), they now relationship for 13% of endeavor worth for nan full continent.

Predictably, astir EU-backed startups activity successful what nan study calls beingness tech, i.e. producing tangible equipment successful nan verticals specified arsenic spacetech, semiconductors, biotech, etc. In these industries, nan stock of EU-backed startups ranges from 24% to 28%.

It besides appears from nan report’s preliminary findings that EU backing improves nan probability of occurrence successful further backing rounds. From Series A to Series D, EU-funded beingness tech startups show a ‘graduation rate’ that’s 1-3 pp. higher than for nan remainder of nan industry.

Credit: Dealroom

Speaking connected nan taxable of fragmentation of nan European tech ecosystem astatine nan position event, Marcin Hejka, co-founder and wide partner astatine OTB Ventures, noted that nan rumor is not needfully astir regularisation aliases nan soul marketplace size.

“The problem is connected nan exertion depletion level,” he said. “Europe arsenic a continent is simply a precocious adopter, particularly connected nan endeavor side. […] But erstwhile location is willingness [at a corporate] to bargain from a startup, they’re looking for startups from their ain countries — and that’s a problem.

“If you’re a German startup, you’re beautiful okay trading to German enterprises. But if you’re a startup from Romania aliases from Slovakia, aliases immoderate different [smaller] country, it’s going to beryllium an uphill effort.”

Theoretically, EU backing mechanisms should beryllium solving this rumor among others, however, astir EU-backed startups are still based successful Western Europe, pinch France, Germany, and nan UK topping nan rankings.

The afloat study will beryllium disposable successful December — you tin pre-download it now.