January 3, 2022

Sifted predictions: what’s in store for European tech in 2022

From the metaverse to alternative financing for startups, our journalists give their predictions for 2022

Last year, Sifted put together some pretty accurate predictions for 2021 — we were right that Klarna would begin to position itself as a rival to Amazon and that climate tech would be trendy. But while we predicted funding and unicorn creation would heat up in Europe, we didn’t anticipate just how much.

With an uncertain 12 months ahead, what predictions can we make for 2022? 

Here are our journalists’ best (and exceedingly well-educated) guesses: 

Amy Lewin, deputy editor

The war for talent intensifies, and purpose-driven companies win

Talent will get more and more expensive — meaning only extremely well-funded startups or those with a sexy purpose (saving the planet, improving women’s health, making NFTs…) will be able to snap up the superstars in product, marketing, sales and engineering. Experienced operators will be able to hold employers to ransom, if they so choose — and employers won’t have much option but to pay high salaries and offer oodles of benefits.

Alternatives to VC come into their own

Early-stage startups will raise money from lots of different sources. Gone are the days when a handful of angels and a few local VCs piled into a seed round. Now we’re seeing startups clamour to take money from the latest pack of founders-turned-angels (looking at you, Tom Blomfield) and turn to revenue-based financing, leaving the average seed-stage VC working hard to show their “value-add”. In 2022, the alternatives to traditional venture capital will multiply, as it becomes easier for “everyday” folk to invest in startups via angel syndicates while VCs themselves start to roll out non-equity based financing options.


Maija Palmer, innovation editor

AI-designed drugs go to trial

The first AI-designed drug will get through clinical trials in 2022 and this will be a massive validation for AI drug discovery. Lots more big pharma companies will be doing deals with AI startups and we will see big funding rounds and exits (IPOs or acquisitions). But at the same time, pharma companies will realise that AI-aided drug discovery is not quite the big deal it was billed as — other parts of the drug development cycle are still as painful as they always were! They will start looking more seriously at ways to use AI to fix these — for example, using machine learning to streamline patient selection for trials.

Quantum computing goes global

The number of quantum computers in operation around the world will increase rapidly — and they will no longer be mostly made by IBM and Google. IBM does have the quantum processor with the largest number of qubits, having gone through the 100-qubit barrier in November with a 127-qubit machine. But many rivals are now getting alternative — albeit smaller — processors operational and every country will be racing to make sure they have their own quantum machine. More companies will start the trial use of quantum computers but 2022 won't yet be the year when anyone discovers a really compelling use for them.

Chris Sisserian, head of intelligence

European tech stops having to prove itself 

2022 is the year European tech finally grows up and stops trying to prove itself. It's a thing now and it speaks for itself: meaningless new records will be set across money raised, unicorns created, numbers of exits etc. Increased international interest, validation and competition will force the industry to mature.

The world reaches peak stuff

Just as the 2008 global financial crisis resulted in a wave of fintech innovation, the social crisis prompted by Covid lockdowns will create a boom in socially focused tech. 2022 will see a cohort of startups emerge with new ways for us to socialise, forge relationships, eat, drink and share live experiences.

Hot take

People realise the metaverse doesn’t mean anything and stop using it.

Mimi Billing, senior reporter

Klarna goes public (finally)

The Swedish fintech Klarna has been on a shopping spree lately with seven acquisitions in the last year. With the latest one, Pricerunner, Klarna has positioned itself “a viable and competitive alternative for retail partners vs Amazon, Google and Facebook”, according to the fintech's chief product officer. We’re likely to see a few more acquisitions and perhaps also another raise before Klarna goes public in the autumn of 2022. 

European VCs start seeing Norway for what it is — the bargain of the Nordics

Few countries in northern Europe are as invisible in the startup ecosystem as Norway. "Great fjords and didn’t they have lots of oil?" is probably the view of most VCs. 

But things are about to change. SoftBank, Tencent and Sequoia have already found their way to the Scandinavian outskirts, joining Northzone (founded in Norway), EQT Ventures (with its AI platform Motherbrain) and Kinnevik. 

But there are great Norwegian startups still under the radar, partly because Norwegian tech companies are not great at making an international splash. The stars in this space are Kahoot! (now a public company) and Oda (a grocery delivery startup founded in 2013, which is only now looking to expand in Europe). The next generation of startups are slowly growing in Norway — and any VCs who want to hunt down a bargain need to head their way.

Michael Stothard, editor

A little froth comes off the market

Last year I predicted that European startup funding would reach a record $50bn in 2021, a 20% rise on the year before. Blimey, I was so wrong. In fact, the amount of VC money in the European ecosystem tripped to $120bn in a dealmaking frenzy.

My patchy track record aside, my prediction for 2022 is that a little froth is going to come out of the markets, reflecting a wider cooling of risk appetite globally. But European tech is here to stay and the funding levels are still going to be high — around the $80bn-120bn mark — which is a number the ecosystem could only have dreamed about a few years ago. 


Funding for female founders will stay bad

This year, the amount of capital raised by startups with all-female founding teams was just 1.1% of the total, down from 2.4% last year. This was despite a whole lot of talk about the topic and a historic bull market. So I predict that next year nothing much will change and the situation will remain dire overall. Having said that, looking at funding rounds of less than $10m in 2021, the share of deals captured by all-women founding teams has increased by one percentage point from 6% to 7%. So maybe there is a glimmer of hope yet for improvements at the early stages?

We’ll finally find (real) uses for NFTs

Investors will throw a shedload of money at metaverse startups. Powered by FOMO, there will be a stampede to back various games and tools companies, creating a bubble. There will start to be rumblings of discontent about the sector and one of the NFT-powered fantasy sports trading companies will become embroiled in a controversy that will take some shine off the sector. However, this will ultimately be a good thing because NFT startups will stop concentrating on just collectibles and figure out uses with much more utility value for ordinary people.

Eleanor Warnock, commissioning editor

2022 will be the year of edtech — and continuing education

Edtech used to be Europe’s laggard sector, and Norway’s Kahoot! was long the lone success (Ukrainian-founded Grammarly scooted off to the US as soon as it could). But 2021 saw Austria’s GoStudent join the unicorn ranks, and other edtech companies such as French driving school Ornikar and Paris-based OpenClassrooms raise chunky rounds. There is much to be disrupted, especially in higher education and more specialised education where individuals are looking for new institutions outside the traditional hierarchy. 

Expect to see edtech being pitched in this “future-of-work” context — and raising much more capital as a result. As people are living longer and have multiple careers, refreshing and updating skills will become more important for employees. Startups might even start offering “education sabbaticals” for staff as they try to retain the best talent. 

Europe starts to have a more developed creator economy tech stack

This meme made me so sad when I saw it earlier this year because Europe has skipped over the creator economy and, based on the Twitter chatter, is heading straight into the Web3 fray. Poor Woody, I mean creator economy. 

But in 2022, we’re going to actually see creator economy startups start to flourish in Europe. Europe’s USP in tech has always been a respect for human rights and tech built with many stakeholders in mind, so we’ll see some creator economy startups with co-owned communities where everyone wins. 

What’s been missing in Europe in terms of developing a strong creator economy tech stack has been its ties to the entertainment industry (we ain’t got nothing on Hollywood), but that could change by way of more collaboration with the gaming industry and, interestingly enough, secondhand clothing apps (shout out to Depop and Vinted, both European) encouraging a new generation of young side hustlers. 


The European startup scene hasn’t been big enough for long enough to have some Netflix-series-worth company implosions but with all the VC cash flying around, we should see at least one unicorn go down in flames.