Q1 2023
Europe’s quietest quarter for over six years
Last updated: 13 Apr 2023
Market 101
There’s no sugarcoating it: Q1 was a weak quarter for European tech. The ecosystem was walloped by continued layoffs, collapsing banks, tight cash flows, shorter runways and all sorts of headline-grabbing events over a shaky three months. You name it, it probably happened.
Of course, Q1 is seldom the busiest quarter, but it’s rarely this bleak: it was the quietest three months since Q1 2017, which will ring alarm bells for market pessimists. And they probably have good reason to listen, as the slowdown hasn’t stopped and there’s no sign it will soon.
VC funding fell back to pre-pandemic levels for the first time since Q3 2020 across virtually every region, although by bigger margins for top tech countries, validating downward trends we first started seeing in H2 2022. VCs have grown more cautious and startups more conservative.
And yet there’s still gold to be picked from the mud; rarely has a stagnant time been so exciting. Specifically, we saw the generative AI hype move from Twitter feeds to tangible ventures, as startups strive to integrate the technology anywhere they could to justify a .ai domain. Add some healthy raises for previously overlooked subsectors and things look a little brighter than they seemed for European tech.
Early stage market map
Key facts
$14.3bn
total VC funding raised in Europe in Q1, down 58% from Q1 2022
2,300
tech deals tracked, the lowest in a single quarter since Q3 2016
2,996
active investors tracked
Trends to watch
Almost hornless
Europe only birthed a single unicorn in Q1: German AI startup DeepL. Compare that with 20 new unicorns in Q1 2022 and 14 in Q1 2021.
Although data intelligence company Quantexa reached a $1.8bn valuation in April — something we predicted last year — unicorn numbers are looking bleak, as investors pivot away from inflated valuations to profitable ventures.
Tough at the top
While holding onto the top spot in Europe, the UK still saw a staggering 67.5% drop in funding compared to Q1 last year. Germany matched France at $2.1bn but they fell 40% and 62.5% respectively. The gap to the top hasn’t been as tight in three years, but for all the wrong reasons.
As expected, the slowdown has hit top performers harder, although smaller ecosystems are also notching slower-than-expected rates.
Shut up and buy my company (adieu, IPOs)
Sifted tracked only one sizeable IPO for the quarter — healthtech Oculis’s $220m Nasdaq debut — with public listings out of the picture for most companies.
An uptick in acquisitions in 2023 was expected, and some 500 startups were sold over the quarter. 2023 may well break the acquisition record for a second consecutive year.
Fintech lost it
Healthtech deal count surpassed fintech’s by a margin of 30, as investors moved away from Europe’s golden vertical in favour of more timely and/or speculative ones.
Sectors like energy, spacetech, quantum computing and transportation are grabbing VCs’ attention, and captured the largest share of rare Q1 megarounds.
Startups tracked by Sifted
Sifted take
Hold onto your hats because this sharp funding drop is very bad news for young tech companies. Much has changed since the mania of 2021: investors are looking at rising interest rates, sinking valuations and thousands of layoffs and their response has been to reduce both the size and number of cheques they write. Still, Q2 is usually a bit livelier than Q1, so we can expect some uptick in deal flow. The bigger question: how long will the downturn linger? We’ve no idea, but the next year will likely see more startups struggle.
Rising stars
Develops links to connect physically separated Quantum Processing Units (QPUs) — vital for scaling up quantum computing
Round
Seed
Valuation
Undisclosed
Date
2023
Size
€5,000,000
Total funding
€8,790,000
An EF company backed by Global Founders Capital, it develops a context-aware AI to detect harmful content for brands and platforms.
Round
Seed
Valuation
Undisclosed
Date
2023
Size
€7,270,000
Backed by the likes of EQT, Balderton and Acequia Capital, it offers an AI transcriber service for notes and meetings.
Round
Seed
Valuation
Undisclosed
Date
2023
Size
€9,090,000
Backed by a group of superangels as well as Accel and 20VC, it builds an alternative social media platform to promote positive interactions and mental well-being.
Round
Pre-seed
Valuation
Undisclosed
Date
2023
Size
€2,500,000
Early stage startups to watch
Agua Blanca
Fashion
€5.5m
€3m
€18m
AICA
Robotics
€1m
€1m
€6m
Aisot
Fintech
Crypto And Defi
€1.5m
€1.5m
€9m
Akina
Health
Health Platform
€1.5m
-
€8m
AlfaDocs
Health
€2m
€2m
€12m
Alithea Genomics
Health
Biotechnology
€920k
€1m
€5m
AMFG
€7.7m
-
€46.4m
Antiverse
Health
Pharmaceutical
€4.8m
€2.7m
€16.4m
Atlas Metrics
Enterprise Software
€5.2m
€5.2m
€31.2m
Baobab
Security,Fintech
Insurance
€6.5m
€3m
€18m
baupal
Real Estate,Energy
-
-
-
BioCorteX
Health
Biotechnology
€4.5m
€4.5m
€27.3m
Biomadvanced Diagnostics
Health
Biotechnology
€2.6m
€900k
€10.2m
BiPER Therapeutics
Health
€1.3m
€300k
€1.8m
BlackCurve
Fintech,Enterprise Software
Financial Management Solutions
€4.5m
€900k
-
Blobr
Enterprise Software
€6.2m
€5m
€30m
Bloomcoding
Education
Education Providers
€1m
€1m
€6m
Brenus Pharma
Health
Biotechnology
-
€1.5m
-
C-mo Medical Solutions
Health
Medical Devices
€8.9m
€4.8m
€28.8m
Cansense
Health
€1.8m
€1.8m
€10.8m
Cerchia
Fintech
Crypto And Defi,Insurance
€1.1m
€1.1m
€6.5m
Cohort
Marketing
Adtech
€3.2m
€3.2m
€19.2m
Connect Earth
Fintech
Payments,Banking
€6.7m
€5.1m
€30.6m
Cordless
Marketing
€2.1m
€2.1m
€12.5m
Crew
Jobs Recruitment
€2.1m
€2.1m
€12.5m
CultureAI
Security,Education
Identity & Access,Education Providers
€3.6m
€4.4m
€21.8m
Deep Skill
Education,Enterprise Software
Learning Tools And Resources
€1.1m
€100k
-
deeploi
Enterprise Software
€3m
€3m
€18m
Dotfile
Enterprise Software
€2.5m
€2.5m
€15m
Ecosystem Restoration Standard
€5m
€5m
€30m
Edgeless Systems
Security,Enterprise Software
Cloud & Infrastructure,Data Protection
€6m
€4.5m
€27.3m
Editions En Cavale
€1.4m
€1.4m
€8.4m
Eightinks
Energy
Energy Storage
€130k
€130k
-
Emma
Enterprise Software
€5.5m
€5.5m
€32.7m
Equium
Energy,Home Living
€5m
€5m
€30m
EtherMail
Security
Data Protection
€6.4m
€3.6m
€21.8m
Ethon AI
Enterprise Software
€7.2m
€6.2m
€37.1m
Fada Medical
-
€500k
-
Greenlyte Carbon Technologies
Energy
Clean Energy
€3.2m
€3.2m
€19.1m
Greenspark
Enterprise Software
€1.6m
€1.1m
€6.6m
Growblocks
Fintech,Enterprise Software
Financial Management Solutions
€8.1m
€6m
€36m
HBOX Therapies
€2.3m
€2.3m
€13.8m
Holly Health
Health,Wellness Beauty
Health Platform
€3.5m
€1.8m
€6.2m
Impossible Cloud
Security
€9.4m
€6.4m
€38.2m
Inarix
€3.1m
€3.1m
€18.6m
Inotrem
Health
Biotechnology,Pharmaceutical
€107m
-
€29.8m
Instill AI
€3.3m
€3.3m
€19.6m
Jobgether
Jobs Recruitment
€1.4m
€1.4m
€8.4m
Kern AI
€2.7m
€2.7m
€16.2m
Keyzy
Fintech,Real Estate
€3.6m
€3.6m
€21.6m
Kita
Fintech,Energy
Insurance
€5.2m
€4.8m
€28.8m
Klearcom
Telecom
€1.5m
€1.5m
€9m
konfetti
Education,Event Tech
€2m
€2m
€12m
Kuano
Health
Pharmaceutical,Biotechnology
€3.7m
-
€7.2m
Latent Technology
€1.9m
€1.9m
€11.5m
Lun
Energy
Energy Efficiency,Clean Energy
€10.3m
€10.3m
€61.8m
Mainteny
Enterprise Software
€2.8m
€2.7m
€16.2m
METYCLE
€1.5m
€1.5m
€9m
misterbnb
Travel
€10m
-
€2.7m
MPC Therapeutics
Health
€1.3m
€1.3m
€7.5m
NEURINNOV
Health
Medical Devices
€3.1m
€30k
€18m
Newronika
Health
Medical Devices,Biotechnology
€13.9m
€2.5m
€50.4m
NuVision Biotherapies
Health
Medical Devices
€6.1m
€1.3m
-
Nyobolt
Energy,Transportation
Energy Storage
€81.7m
-
€360m
Obligate (Formerly FQX)
€7.9m
€3.6m
-
oculai GmbH
Real Estate,Enterprise Software
Construction
€2.5m
€2.5m
€15m
Odaptos
€500k
€500k
€3m
Oja
Food
Food Logistics & Delivery
€3m
-
€18m
Omny
€2m
€2m
€12m
Oneleaf
€4.2m
€4.2m
€25.2m
Open Bionics
Health,Robotics
Medical Devices
€6.8m
€1.5m
-
Origami Marketplace
Jobs Recruitment
€2.3m
€2.3m
€13.8m
Osivax
Health
Biotechnology,Pharmaceutical
€40.9m
€910k
€48m
Phytonics
Energy
€1m
€1m
€6m
Polyteia
Enterprise Software
€5m
€5m
€30m
PREVIA MEDICAL
Health
€2.1m
€2.1m
€12.6m
Productpine
€4.5m
€2m
-
Project Eaden
Food
€10.1m
€2m
-
Proveye
€1m
€1m
€6m
Qbeast
€3m
€2.5m
€15m
QuantrolOx
Enterprise Software
€7.7m
€3.5m
-
Qubit9
Security
-
€7m
-
Ramp
Enterprise Software
€4.5m
€4.5m
€27.3m
Refined Laser Systems
Health,Semiconductors
€2.7m
€2.7m
€16.2m
Refuel Green
€1.2m
€1.2m
€7.2m
Reshapebiotech
Health
€7.3m
€6.5m
€38.7m
RIIICO
€1.4m
€1.4m
€8.2m
Salv
Security,Fintech
Regtech
€7.5m
€4m
€24m
Scaleup Finance
Fintech
Financial Management Solutions
€7.3m
€7.3m
€43.6m
Scoreplay
Sports
Sport Media
€920k
-
€2.8m
Secfix
Enterprise Software
€3.5m
€3.5m
€20.7m
Senbiosys
Health
Medical Devices
€550k
€550k
€3.3m
ShareID
Security
€2.6m
€2m
€12m
Sikoia
Fintech
Regtech,Mortgages & Lending
€7.5m
€5.5m
€32.7m
Sitehop
Security
Data Protection
€1.2m
€1.2m
€7.2m
SLAY
€2.5m
€2.5m
€15m
SpyBiotech
Health
Biotechnology
€38.1m
€3.7m
€177.3m
Startup-Insider
Media
Content Production
€1m
€1m
€6m
Studiomatic
Music
€900k
€900k
€5.4m
Superlayer
Fintech,Marketing
Financial Management Solutions
€1.2m
€1.2m
€7.1m
SuperNormal
Media,Enterprise Software
€10.9m
€9.1m
€54.5m
Talkout
Education,Jobs Recruitment
Learning Tools And Resources
€1.2m
€1.2m
€7.2m
Teleatherapy
Health
€700k
€700k
€4.2m
Terapet
Health
Medical Devices
€1.9m
€1.9m
€11.5m
Tevva Motors
Energy,Transportation
Vehicle Production,Energy Storage
€127m
-
€278.2m
Tidely
Fintech
Financial Management Solutions
€4.7m
€3.5m
€21m
Toolify Robotics
-
-
-
Tranch
Fintech
Payments,Mortgages & Lending,Financial Management Solutions
€47.5m
€45.5m
€272.7m
Translucent
€3.2m
€3.2m
€19.4m
Traplinked
Home Living
€2.3m
€2.3m
€13.8m
Unipile
Enterprise Software
€1.5m
€1.5m
€9m
Unisers
Semiconductors
€12.7m
€12.7m
€76.4m
Unitary
Security,Enterprise Software
€8.8m
€7.3m
€43.6m
VisioLab
Food
€3.1m
€2m
€12m
Vitaance
Health,Fintech
Insurance
€5.6m
€2.2m
€13.2m
Volumina Medical
Health
Medical Devices
€1.2m
€80k
€2.5m
VOS.health
Health,Wellness Beauty
Health Platform
€2.5m
€1.5m
€9m
Vylo
Media
Publishing
€1.8m
€1.8m
€10.9m
Waterdrop
Food
Innovative Food
€71.5m
-
€360m
WeLinQ
Semiconductors
€5m
€5m
€30m
Wikifarmer
Food,Education
Education Providers,Food Logistics & Delivery,Agritech
€5.2m
€5m
€30m
Wildsense
Health
-
€5m
-
Yoordi - scan order pay
Fintech,Event Tech
Payments
-
-
-
Zurich Soft Robotics
Energy
Clean Energy
€1.3m
€1.3m
€7.5m
ZYMVOL BIOMODELING
Health
€2.6m
€1.3m
€7.8m
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