Europe’s technology startups are doing just fine

Never hasVCVC a crisis been so exciting. Startup valuations are plunging, tech layoffs abound and fresh venture capital () is hard to come by. But at Slush, a big annual tech shindig which wrapped up in Helsinki on December 1st, founders and their financiers were partying almost like it was 1999, the height of the dotcom bubble. More than 13,000 people, a record number that included 5,000 entrepreneurs and 3,000 investors, spent two days in a cavernous trade-show, witnessing presentations, panels and lots of laser beams.Like startups everywhere, those in Europe have been hit by rising interest rates, which make their promise of rich future profits looks less alluring today. This year they are forecast to attract just $45bn in investments, according to “State of European Tech”, an annual report released at Slush by Atomico, a firm based in London. That is down by 38% compared with last year and by 55% from a scorching 2021. The median valuation of more mature “growth stage” startups now hovers below the five-year average. Whereas in 2021 Europe created 107 “unicorns” (unlisted firms worth $1bn or more) and last year it produced another 48, so far in 2023 it has added just seven. Many more have been “dehorned”, according to Atomico: 50 this year, on top of 58 in 2022.