October 11, 2023

Europe lacks ‘developed’ VC ecosystems — with the exception of London

But the region is home to nearly half of the highest growth startup ecosystems in the world, according to a new ranking by PitchBook

Just one European city makes it into the top 10 most ‘developed’ tech ecosystems in the world, according to a new ranking by data platform PitchBook. 

London came in seventh in the ranking — based on a ‘development score’ calculated using the value and number of deals, exits and VC funds between Q3 2017 and Q2 2023 — behind San Francisco, New York, Beijing, Shanghai, Los Angeles and Boston.

San Francisco tops the list by some way, with more than double the deal value and quadruple the exit value of the next biggest tech ecosystem, New York.


Berlin — the next best-placed European city and the only other one in the top 20 — was ranked at 16th.

It’s not the first time this year that Europe’s tech credentials have stacked up poorly against its global competitors. During the first half of 2023, late-stage funding in Europe fell further than the US and Asia.

Hope on the horizon

But it’s not all doom and gloom in Europe. 

The continent is home to nearly half of the top 10 ‘highest-growth’ tech ecosystems across the world.

Buoyed by a resurgence of M&A deals in the DACH region, Berlin ranked number three in the list — based on one, three and five-year growth rates of deal, exit and fundraising activity.

Madrid, part of a Spanish tech scene that saw a number of big money raises across a frothy 2022, ranked seventh. Milan came in at eighth, as it reaped the benefits of increasing amounts of private capital in Italy and an uptick in the willingness of its entrepreneurs to found startups on home turf in recent times. Tallinn and Vienna also came in the top 10. Istanbul and Lyon made it into the top 20.

Growth isn’t the only reason to be cheerful about the European tech scene. While European VCs might lack the firepower of their counterparts across the Atlantic, a recent report found that they delivered better returns than their US counterparts across five, ten and twenty-year time horizons.

Kai Nicol-Schwarz

Kai Nicol-Schwarz is a reporter at Sifted. He covers UK tech and healthtech, and can be found on X and LinkedIn