European tech review 2023
Sifted wrapped
Last updated: 14 Dec 2023
Market 101
Europe’s 2023 funding picture is looking more blue-period Picasso than brightly coloured Kandinsky these days. With 10k deals recorded at the time of writing, it’s been European tech’s slowest year since 2017 (the reporting lag may add some gloss later, but still). Deal volume this year has been roughly half that of record-setting 2021 and two-thirds that of 2022. We saw fewer — but larger — average rounds across most funding stages, telling us that investors picked their shots more carefully in 2023. Q2 and Q3 saw the most action with $34.2bn — roughly 58% of total funding — poured into European tech.
Meanwhile, the unicorn paddock got a bit lonelier this year. Just five new €1bn+ companies were minted according to Sifted’s definition — including AI startups Synthesia and DeepL and financial crime company Quantexa — tumbling from 108 and 48 in 2021 and 2022, respectively. Many more have been “dehorned”, according to the latest State of European Tech report published by Atomico: 50 this year, after 58 in 2022.
Besides the numbers, some key storylines dominated. The quick collapse of Silicon Valley Bank over a sleepless weekend in March was a low point for many founders. The ECB’s interest rates — jumping from a record low of -0.5% last summer to a record high of 4% this year — starved the riskiest ventures of capital. Strategies for living leaner echoed around the walls of many startups in 2023.
The majority of us had our first encounter with generative AI this year. The impact of ChatGPT was so immediate and great that when Italy briefly banned the tech in April, the productivity of coders in the country fell by 50%. Startups like Heidelberg’s Aleph Alpha and Poolside AI — which relocated from the US to Paris in August — have raised $100m+ rounds this year, and investment into European AI startups made up 17% of total capital pumped into the sector across the globe. The funding frenzy peaked in June when four-week-old Parisian startup Mistral AI scooped a record €105m seed round.
Predictions for how AI will change the world see-saw between “it’ll grant us productivity superpowers” and “it’s going to be a bit Black Mirror”. Most startups have hedged their bets and quietly added the letters “AI” to their websites and pitch decks. Determining AI funding amounts is tricky — since so many startups now tell us their products are AI-based — but an estimated $10.2bn went to European companies with some level of AI tech stack in 2023, against $37bn for the US.
Market map
Key facts
$60bn
is the sum European startups are expected to attract by the end of 2023, down 39% compared with last year1
27%
of all capital invested in European tech in 2023 has gone to climate tech startups2
5
new European unicorns minted in 20233
Trends to watch
Setting the stage
Thought 2022 was bad for late-stage funding? Try 2023. Series C+ funding peaked at $84.8bn back in 2021, stumbled to $61.4bn last year and then fell flat on its face to $30bn in 2023 — 64.6% down on those heyday 12 months.
Early-stage (up to and including Series A) mostly held up its side of the bargain again, surpassing the $16bn mark for the third straight year in a row. That’s despite early-stage activity — by number of deals completed — going missing in H2. As of early December, the number of funding rounds didn’t even make it to 3,500 in the second half of this year (compared to 5,665 in H1), the lowest volume since H2 2014.
The decline in deal count means that the average seed (including pre-seed) cheque size reached a record high this year: $1.47m. Even after removing French outliers Mistral (€105m) and Poolside AI ($100m), it still tops 2022’s $1.37m.
Who takes silver?
The race to be Europe’s second-best tech scene in 2023 was competitive. The UK retained its unrivalled (for now) lead at the top of the leaderboard with $17.7bn raised from deals done on British shores — 108% higher than second-placed France ($8.8bn), the widest margin since 2018. They pipped Germany ($7.9bn) to the post after a back-and-forth year, while Sweden ($5.2bn) sits in fourth place for a fifth consecutive year.
Meanwhile, the Swiss and Dutch tech scenes had strong years, posting $2.8bn and $2.3bn respectively, while Spain ($2bn) and Norway ($1.3bn) retained spots in the top 10 along with new entrant Denmark ($1.4bn), which climbed five places. The Danish ecosystem was the only major European one to not experience a slide in funding this year. Italy ($1.2bn) and Ireland ($1bn) dropped out of the top ten, just one year after featuring for the first time.
VCs feel the squeeze too
European VCs are on track to raise significantly less in 2023 than they managed in 2022. It's not for lack of trying. According to a recent Sifted poll of 111 VCs investing in Europe, the majority (51%) have spoken to over 100 LPs — pension funds, family offices and endowments among them — in the past two years about fundraising.
But LPs have pulled back for several reasons. With the still-chilly state of the IPO and M&A markets, 56% of European VCs haven’t returned any capital to their LPs in the last 12 months — and so LPs are unable, or hesitant to, put any more capital into tech in the meantime.
Climate tech for hard(ware) times
VCs went a deeper shade of green this year with climate tech accounting for 27% of all capital invested in European tech in 2023, more than doubling its share of investment since 2021, according to Atomico’s State of European Tech.
Back in September, we noticed that Europe’s four largest equity deals were all climate infrastructure companies. It remains the case three months later: H2 Green Steel, Northvolt, Zenobe Energy and Verkor raised a combined €4.5bn between equity and convertibles in 2023.
Debbie Downrounder
The dreaded downround well and truly took hold of European VC in 2023. According to PitchBook, 21.3% of raises this year priced a company lower than its previous round — the highest level since 2014, and a jump on 2022’s surprisingly low 14.8%. For founders’ sake, let’s hope for some destigmatisation in the new year.
Bridge rounds have also become a more popular option for those wanting to sidestep a valuation hit of a priced round. While bridge rounds are historically more common at early stages, the biggest increase in 2023 has been at Series B and C. As of the end of October, according to Atomico, 37% of Series B rounds were bridges, versus 22% in 2022, and 34% and 21% respectively for Series C.
Startups tracked by Sifted
Sifted take
The best thing about 2023 for techies may be that it’s nearly over. Though it depends on your vantage point. Climate tech and AI were scorching, while a proverbial bucket of cold water fell on fintech. One big thing to watch in 2024 is whether interest rates finally start to come down. The moment can’t come soon enough — particularly for deeptech companies on challenging, multi-year fundraising journeys. On the other hand, if you’re an AI founder, you probably think it’s 2021 again, with investors charging your inbox. AI has become a board-level conversation in companies, so if you're selling AI SaaS products, you can probably expect a lucrative few years. Some investors, ever optimistic, feel better times are coming. One told us recently that the market's been busy in a way that it hasn’t been since early 2022, with the €20m-€30m pre-seed/seed rounds slowly reappearing.
Rising stars
The French company, which develops novel cell and gene therapies for cystic fibrosis patients, raised a €16.5m seed round in June. Investors including AdBio partners, M Ventures, Johnson & Johnson Innovation and Bpifrance Large Venture chipped in.
Round
Seed
Valuation
Undisclosed
Date
2023
Size
€10.4m
The startup that rose like a rocket in 2023, Mistral AI is developing AI-powered products such as chatbots, search engines and AI assistants. In December, the startup raised €385m ($415m) from investors Andreessen Horowitz and Lightspeed Ventures.
Round
Series A
Valuation
Undisclosed
Date
2023
Size
€385m
Greenlyte Carbon Technologies wants to replace oil and gas with Co2 and hydrogen captured from the air. The startup scooped €4.5m in June 2023, a round that followed just six months after the company secured its initial €3.5m pre-seed.
Round
Seed
Valuation
Undisclosed
Date
2023
Size
€4.5m
ConstellR, a joint spinoff from the German Fraunhofer research lab and German Aerospace Centre, captures coloured heat maps that reveal all kinds of information about the earth. The startup has received funding from investors including Einstein Industries Ventures, Lakestar and Vsquared.
Round
Seed
Valuation
Undisclosed
Date
2023
Size
€17m
Poolside AI, a startup that wants to create a ChatGPT-like tool that can write software code, was one of several big French AI stories of 2023. French billionaire Xavier Niel and US VC Felicis led the startup’s mammoth $126m seed round in August.
Round
Seed
Valuation
Undisclosed
Date
2023
Size
$100m
NayaOne operates a marketplace which gives banks access to hundreds of fintechs and datasets. The startup also won the tender to build and run the Financial Conduct Authority’s Digital Sandbox, a platform designed to allow young companies to experiment with new fintech products.
Round
Seed
Valuation
Undisclosed
Date
2021
Size
€1.2m
Early stage startups to watch
Agua Blanca
Fashion
€5.5m
€3m
-
Alia Therapeutics
Health
Pharmaceutical, Biotechnology
€7.8m
€4.4m
-
Almer Technologies
Robotics
€6.7m
€2.9m
-
Anapaya
Security, Telecom
Cloud & Infrastructure
€3.6m
€1.8m
-
anotherblock
Fintech, Music
Crypto And Defi
€7.4m
€4m
-
Artica Therapeutics
Health
Biotechnology
€12m
€12m
-
askui
€6m
€4.3m
-
Asphalte
Home Living
€5m
€5m
-
Astran
Security, Enterprise Software
Data Protection
€6.5m
€4.5m
-
Atlas Metrics
Enterprise Software
€5.2m
€5.2m
-
ATMOS Space Cargo
Space
€4m
€4m
-
Atoa
Fintech
Payments
€8.1m
€5.9m
-
Autone
Enterprise Software
€5.7m
€4.1m
-
Aviwell
Health, Food
Health Platform, Biotechnology, Innovative Food, Agritech
€7.6m
€2.8m
-
Awell
Health
Health Platform
€6.8m
€4.5m
-
BioCorteX
Health
Biotechnology
€4.5m
€4.5m
-
Bits Technology
Fintech
Regtech
€5m
€4m
-
BlackCurve
Fintech, Enterprise Software
Financial Management Solutions
€4.5m
€900k
-
Blobr
Enterprise Software
€6.2m
€5m
-
Bloom
Jobs Recruitment
€9.1m
€9.1m
-
Bon Vivant
Food
Innovative Food
€18.4m
€14.4m
-
BoomFi
Fintech
Payments
€3.5m
€3.5m
-
C-mo Medical Solutions
Health
Medical Devices
€8.9m
€4.8m
-
cakewalk
Security
Data Protection, Identity & Access
€5m
€3m
-
Cello
€5.4m
€3.1m
-
Cerbos
Enterprise Software
€10m
€6.8m
-
Cloover
€7m
€7m
-
Cohort
Marketing
Adtech
€3.2m
€3.2m
-
Colonia
Transportation
Logistics & Delivery
€6m
€6m
-
Connect Earth
Fintech
Payments, Banking
€6.7m
€5.1m
-
constellr
Food, Space
Agritech
€31m
€17m
-
Correcto.
Education
Learning Tools And Resources
€7.2m
€6.5m
-
CultureAI
Security, Education
Identity & Access, Education Providers
€10m
€6.4m
-
CUR8
Energy
€6.4m
€6.4m
-
Daedalus
Robotics
€5.5m
€5.5m
-
Datagalaxy
Enterprise Software
€11.3m
€9.1m
-
Deepeye Medical
Health
€3.5m
€3.5m
-
Deployed
Media, Enterprise Software
€3.6m
€3.6m
-
Depoly
Energy
Waste Solution
€11.3m
€10.3m
-
Doorfeed
Fintech
Wealth Management
€12m
€12m
-
Dust
Enterprise Software
€5m
€5m
-
Ecosystem Restoration Standard
Enterprise Software
€5m
€5m
-
Edgeless Systems
Security, Enterprise Software
Cloud & Infrastructure, Data Protection
€6.1m
€4.5m
-
Emma
Enterprise Software
€5.5m
€5.5m
-
Empion
€8.4m
€6m
-
Enzai
Legal
€3.6m
€3.6m
-
Equium
Energy, Home Living
€5m
€5m
-
Escape
Security
€3.5m
€3.5m
-
EtherMail
Security
Data Protection
€6.4m
€3.6m
-
Ethon AI
Enterprise Software
€7.2m
€6.2m
-
Faks
Home Living
€5m
€5m
-
Fertifa
Health
Health Platform
€7.2m
€6m
-
Filigran
Security
€5.5m
€5.5m
-
Filu
Health
€7.1m
€5.1m
-
finres
Fintech, Food
Mortgages & Lending, Wealth Management, Agritech
€4.1m
€4.1m
-
Fipto
Fintech
Payments, Crypto And Defi
€15m
€15m
-
Floodlight
€5.7m
€5.7m
-
Floy
Health
Health Platform, Medical Devices
€6.7m
€5.4m
-
Four Jaw
Enterprise Software
€3.9m
€2.2m
-
fxhash
Media
€4.5m
€4.5m
-
Fyma
Real Estate, Enterprise Software
Construction, Workspaces, Real Estate Software, Real Estate Services
€3.7m
€2m
-
getpaid
Fintech, Enterprise Software
Payments
€6.5m
€5.5m
-
Gladia.io
Media, Enterprise Software
€4m
€4m
-
Glassdollar
Enterprise Software
€4m
€2m
-
Glox Therapeutics
Health
Health Platform, Pharmaceutical
€5.2m
€5.2m
-
Granola
€4.3m
€4.3m
-
Granular Energy
Energy
Clean Energy
€9.5m
€7.5m
-
Graphext
Marketing, Enterprise Software
Marketing Analytics
€13.7m
€4.2m
-
Grasp
Education, Enterprise Software
€3.6m
€3.6m
-
Greenlyte Carbon Technologies
Energy
Clean Energy
€7.7m
€4.5m
-
GreyScout
Security, Enterprise Software
Data Protection
€3.5m
€3.5m
-
Growblocks
Fintech, Enterprise Software
Financial Management Solutions
€8.1m
€6m
-
Hyperline
Fintech
€4m
€4m
-
Hypervision Surgical
Health
Medical Devices
€7.8m
€7.8m
-
Immersive Fox
Media
Content Production
€3.3m
€3.3m
-
Impossible Cloud
Security
€9.4m
€6.4m
-
Inarix
Food
Agritech
€3.1m
€3.1m
-
Injectpower
Health
Medical Devices
€6.5m
€6.5m
-
Instill AI
€3.3m
€3.3m
-
Jet HR
Fintech, Enterprise Software
Financial Management Solutions
€4.7m
€4.7m
-
kennek Solutions
Fintech
Wealth Management, Mortgages & Lending
€15.4m
€11.4m
-
Keyzy
Fintech, Real Estate
€3.6m
€3.6m
-
Kinnu
Education
€8.1m
€5.9m
-
Kita
Fintech, Energy
Insurance
€5.2m
€4.8m
-
Kota
Fintech
Payments, Wealth Management, Insurance
€7.6m
€5m
-
Koyeb
Enterprise Software
€7.8m
€6.4m
-
Kuano
Health
Pharmaceutical, Biotechnology
€5.9m
€2.2m
-
La Fabe
€5m
€5m
-
LabDAO
€3.3m
€3.3m
-
Landfolk
Travel
Accommodation
€4.8m
€3.8m
-
Layer
€6.2m
€1.6m
-
LEDCity AG
Real Estate, Energy
Real Estate Software, Real Estate Services, Energy Efficiency
€4.5m
€2.6m
-
Leetify
Sports
€3.2m
€2.3m
-
Lens Protocol
Media
€13.6m
€13.6m
-
Les Nouveaux Affineurs
Food
Innovative Food
€3.5m
€1.5m
-
Lun
Energy
Energy Efficiency, Clean Energy
€10.3m
€10.3m
-
M^ZERO Labs
Fintech
€20.4m
€20.4m
-
Malou
Food
In-Store Retail & Restaurant Tech
€10m
€10m
-
Meletios Therapeutics
Health
Biotechnology
€6.5m
€1.2m
-
Mesh
Security
€5.6m
€1.5m
-
MetaGravity
Gaming
€8.6m
€8.6m
-
Micron Agritech
Health, Enterprise Software
€4.9m
€2.7m
-
Mindgard
Security
€3.6m
€3.6m
-
Mjuk
Home Living
€7.5m
€2m
-
multifi
Fintech
€12m
€12m
-
Multiomic Health
Health
Pharmaceutical, Biotechnology
€8m
€5.6m
-
Nano Corp
Security
€5.8m
€4.2m
-
Nia Health
Health
Health Platform
€4.3m
€3.5m
-
Nory
Food, Enterprise Software
In-Store Retail & Restaurant Tech
€8.3m
€6.4m
-
Nosh Biofoods
Food
€3.2m
€3.2m
-
Nu Quantum
Security, Semiconductors
€12.5m
€8.4m
-
NuVision Biotherapies
Health
Medical Devices
€6.3m
€1.3m
-
Obligate (Formerly FQX)
Fintech
€7.9m
€3.6m
-
Offr
Real Estate
Search, Buy & Rent, Real Estate Services
€5.2m
€2.1m
-
Omada
Gaming
Betting & Gambling, Esports
€7.1m
€7.1m
-
Ondorse
Fintech
Regtech
€6.2m
€3.8m
-
Oneleaf
Health
Health Platform
€4.2m
€4.2m
-
Onin
Event Tech
€4.2m
€3.3m
-
Opna
Fintech
€5.9m
€5.9m
-
Origin by Ocean
Chemicals
€5m
€3m
-
Outmin
Fintech, Enterprise Software
Financial Management Solutions
€4.2m
€2m
-
Outverse
Media
Publishing
€6.7m
€5.5m
-
Payrails
Fintech
Payments
€18.8m
€13.1m
-
Pencil Biosciences
Health
Biotechnology
€7.3m
€6.7m
-
Perci Health
€5.9m
€4.1m
-
Peroptyx
Enterprise Software
€3.6m
€3.6m
-
Pivot
Enterprise Software
€4.8m
€4.8m
-
Plumery
Enterprise Software
€4.3m
€2m
-
PocDoc
€6m
€3m
-
Polyteia
Enterprise Software
€5m
€5m
-
Poolside AI
Enterprise Software
€114.5m
€90.9m
-
Primo
Security, Enterprise Software
Device Security & Antivirus
€3.1m
€3.1m
-
Productpine
Marketing
Ecommerce Solutions
€4.5m
€2m
-
Project Eaden
Food
Innovative Food
€10.1m
€2m
-
Pydantic Services Inc.
€4.3m
€4.3m
-
Qbeast
Enterprise Software
€3m
€2.5m
-
Qomodo
Fintech
Mortgages & Lending, Payments
€4.5m
€30m
-
QuantumDiamonds
Semiconductors
€7.5m
€4m
-
Quench.AI (Formerly NewMN)
Media, Education
Learning Tools And Resources, Content Production, Social Media
€5.4m
€4.5m
-
Ramp
Enterprise Software
€4.5m
€4.5m
-
Rayon
€5.8m
€4m
-
Red Rover Interactive
€4.1m
€4.1m
-
REEV
Health
€4.5m
€3m
-
Refined Laser Systems
Health, Semiconductors
€3.4m
€2.7m
-
Reflex Aerospace
Space
€10.3m
€1.8m
-
Relay Technologies
Marketing
Ecommerce Solutions
€9.1m
€9.1m
-
ReOrbit
Robotics, Space
€6.7m
€6.7m
-
Reshapebiotech
Health
€7.3m
€6.5m
-
Resortecs
Fashion, Energy
Waste Solution
€4.7m
€2.2m
-
Rest Less
Jobs Recruitment
€18.1m
€6m
-
REVER
Marketing, Enterprise Software
Ecommerce Solutions
€8.4m
€7.5m
-
Rhythm Diagnostic Systems
Health
Health Platform
€8.2m
€1m
-
River BioMedics
Health
Biotechnology
€3.8m
€2m
-
Rodeo
Enterprise Software
€4.8m
€4.8m
-
RoomPriceGenie
Travel
€3.1m
€170k
-
Salus
€4.3m
€4.3m
-
Salv
Security, Fintech
Regtech
€7.5m
€4m
-
Saola Shoes
Fashion, Sports
Footwear, Apparel
€3.3m
€2m
-
Scaleup Finance
Fintech
Financial Management Solutions
€7.3m
€7.7m
-
Scoreplay
Sports
Sport Media
€5.5m
€4.5m
-
Secfix
Enterprise Software
€3.5m
€3.5m
-
Signaloid
Semiconductors
€3.8m
€3.5m
-
Sikoia
Fintech
Regtech, Mortgages & Lending
€7.5m
€5.5m
-
Skarlett
€4m
€4m
-
Solvimon
Fintech
Financial Management Solutions
€9m
€9m
-
Soveren
Security, Enterprise Software
Cloud & Infrastructure
€9.2m
€3.3m
-
SPART
Sports
€3.1m
€1.4m
-
Starcart
Consumer Electronics
€4.9m
€3.5m
-
Stockoss
Home Living, Transportation
€5m
€4m
-
Stokelp
Food
Agritech
€3.5m
€3m
-
Superchain
Fintech
€4.8m
€3.6m
-
SureIn
Fintech
Insurance
€4.9m
€4m
-
Swaap
Fintech
€4.1m
€4.1m
-
Swave Photonics
€10m
€3m
-
Tanso
Enterprise Software
€8.2m
€4m
-
Tidely
Fintech
Financial Management Solutions
€4.7m
€3.5m
-
Tinamu Labs
Robotics
€5.8m
€830k
-
Tranch
Fintech
Payments, Mortgages & Lending, Financial Management Solutions
€47.5m
€45.5m
-
TransactionLink
Security, Fintech
Banking
€6.2m
€5m
-
Translucent
Fintech
Financial Management Solutions
€9.2m
€6m
-
TreesPlease Games
Gaming
€7.3m
€7.3m
-
Trezy
Fintech, Enterprise Software
Financial Management Solutions
€4m
€3m
-
Tune Insight
Health
Health Platform
€3.1m
€3.1m
-
Unisers
Semiconductors
€12.7m
€12.7m
-
Valink Therapeutics
Health
Pharmaceutical, Biotechnology
€7.6m
€7.6m
-
VisioLab
Food
€3.1m
€2m
-
VisionAI
€5m
€5m
-
Vitaance
Health, Wellness Beauty
€5.6m
€2.2m
-
Vivla
Real Estate
Real Estate Software, Search, Buy & Rent
€5.9m
€2.7m
-
Voliro
Robotics
€5m
€3.3m
-
VoxelSensors
Semiconductors
€6.3m
€5m
-
weflow
€5.4m
€2.9m
-
WeLinQ
Semiconductors
€5m
€5m
-
Wikifarmer
Food, Education
Education Providers, Food Logistics & Delivery, Agritech
€5.2m
€5m
-
Wildsense
Health
€5m
€5m
-
World Makers
Gaming, Media
Content Production
€6.4m
€3.6m
-
Worldover
€3.6m
€3.6m
-
X-PRESSURE
Health
Medical Devices
€4.5m
€4.5m
-
Zealy (Formerly Crew3)
Jobs Recruitment
€3.2m
€3.2m
-
Zelt
Jobs Recruitment, Enterprise Software
€3.2m
€3.2m
-
Europe’s success stories
Who early stage startups are up against
(Pre-)Seed
Series A
Series B
Series C
Series D+
IPO/Exit
Berlin-based Immerok, developer of a serverless cloud service, was bought by US software company Confluent in January, in a deal said to be worth around $100m.
(Pre-)Seed
Series A
Series B
Series C
Series D+
IPO/Exit
Swedish energy tech startup Aira offers heat pumps and energy tech to reduce reliance on gas heating. The startup’s founder is Harald Mix, the man behind climate tech unicorns H2 Green Steel and Northvolt. In December, Aira secured €86m from investors including Altor Equity Partners, Collaborative Fund, Creades AB, Kinnevik and Lingotto.
(Pre-)Seed
Series A
Series B
Series C
Series D+
IPO/Exit
German drone manufacturer Quantum Systems bagged €63.6m in Series B funding in October, led by investors HV Capital and DTCP. The first European company to raise over €100m on dual-use tech, Quantum Systems has also been a key supplier to Ukraine’s defence effort.
(Pre-)Seed
Series A
Series B
Series C
Series D+
IPO/Exit
London-based insurtech Laka provides insurance for e-bike riders. In October, the company bought French e-bike insurance broker Cylantro and raised €7.6m in an equity and debt round.
Sources
Research reports
1, 2 State of European Tech report, 2023 | December 2023 | Atomico
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