A January in European Tech

We love that you are so numerous in appreciating our curated lists of what is going on in European Tech, which we've started doing on a daily basis quite recently.

It takes some effort to sift through the daily news and surface the things that matter, not just the big funding rounds and exits, but also the interesting moves made by startups, investors, policymakers and (to a degree) the big tech companies.

Take it from me, it's even more challenging to select only 10 stories at the end of each week, but it's a good way to stay mindful about what is relevant for Europe's ecosystem(s).

It didn't use to be that way, mind you. When we started tech.eu back in 2013, monster funding rounds, European startups playing (and, sometimes, winning) at the global innovation game, major acquisitions, IPOs etc. happened as well. They were just, well, rare enough to resonate for weeks, as astutely observed by Draper Esprit's James Clark last week as well.

It occurs to me that 5 years ago any of these deals would have been headlines for weeks. https://t.co/fJk9fBYKik

— James Clark 📈📉🤷🏼‍♂️ (@mr_james_c) January 30, 2021

We all know - or at least, those who care - that the European technology industry has grown up a lot in recent years, and the growth and maturation of the largest ecosystems in particular have been quite remarkable.

Enormous challenges still remain, and it's not like the global technology industry as a whole isn't growing and evolving, but the fact remains that it's noteworthy how quickly things have changed from a reporting perspective. And last month, somehow, felt a bit more special.

Sure, there was a ton of news (a lot of announcements get delayed in December until the new year to account for the holiday lull), and the ongoing coronavirus pandemic is accelerating en masse a number of trends in technology and its adoption, the digital transformation of our societies and businesses, and the shift to a potentially cashless, office-less future.

You can find a selection of news stories below. It was a busy month, alright.

All of the above plays a role, but it's not just that. It's the sense of a new era in European Tech, and I just can't shake it. There's a whole generation of up-and-coming entrepreneurs and technologists across the bloc, who probably don't even yet realise the potential out there.

As I said, there are lots of problems and barriers to growth, but you have to increasingly make a major effort to be bearish about the European tech innovation industry and the future ahead.

But, before I digress too much, to further illustrate what a crazy month January 2021 has really been, consider first some of the headlines that coloured the start of the new year:

- Finnish food delivery firm Wolt raised $530 million - Payments business Checkout.com got valued at $15 billion after a $450 million investment - London-based broadband satellite operator OneWeb raised $400 million in new funding - Mytheresa, the Munich-based online luxury retailer, had a stellar IPO in the US - Workday acquired Danish HR tech startup Peakon for $700 million in cash - Deliveroo raised $180 million in pre-IPO funding at a $7 billion valuation - Berlin-based food delivery powerhouse Delivery Hero raised about €1.2 billion - Hopin, the 18-month-old virtual events startup, acquired StreamYard for $250 million - LendInvest secured a £500 million investment from JP Morgan - Two new unicorns were minted in funding rounds: PPRO and Personio - Protolabs bought The Netherlands' 3D Hubs for up to $330 million - Mambu, a Berlin startup offering a SaaS banking platform, raised €110 million - Etc. (this is telling, too)

Headlines like these are not gonna stop coming, either.

We're a few days into February, and Romania-born UiPath has raised $750 million at a $35 billion valuation, Just Eat Takeaway raised €1.1 billion in a convertible bonds offering, Moonpig successfully floated in London, and so on (and on and on). Consider, also, that there's more than 30 European tech scale-ups that could go public before the year is over.

So what does the data tell us?

In January 2021, tech.eu tracked a total of 311 funding rounds for European and Israeli tech startups and scale-ups, totalling just shy of €6.7 billion in investment size.

That makes it a record month, according to our proprietary database of deals, although last November came close with €6.6 billion raised across 383 deals.

For fun, compare last month to:

January 2019: 237 deals, €3.2 billion raised January 2020: 267 deals, €5.2 billion raised January 2021: 311 deals, €6.7 billion raised

That's right, European tech companies raised twice as much money last month than they did just two years ago, and we tracked 74 more deals in January 2021 than back then.

Fun fact: not once in 2019 did the final monthly funding tally surpass even €5 billion, and we had to wait until November 2020 for the number to rise above €6 billion for the first time.

It doesn't end there. Another record was broken when it comes to M&A transactions; in January 2021, we tracked 154 such deals, compared to 59 the month before.

That's really intense.

For comparison, January 2019 saw 28 M&A deals involving European tech companies, and we tracked 61 transactions in January 2020. The closest we've gotten to last month's activity in the last two years is 124 M&A deals in November 2020 - yup, that was quite a month too!

Another telltale sign of maturation: the growth rounds just keep getting bigger, and more frequent. In January 2021, we tracked 33 European tech funding deals that were higher than €50 million, and 15 financing deals north of €100 million.

For fun, compare last month to:

January 2019: 13 deals worth €50 million+, 5 deals worth €100 million+ January 2020: 16 deals worth €50 million+, 6 deals worth €100 million+ January 2021: 33 deals worth €50 million+, 15 deals worth €100 million+

That means there were 3x more rounds north of €100 million in European tech than back in January 2019, and a record number of €50 million rounds in a single month.

So yeah, anyway, it was an interesting January in European Tech.

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Featured image credit: Free-Photos / Pixabay