The tenth anniversary of the State of European Tech presents us with a paradox.

The last decade has been transformational for our ecosystem - the developments are vast. Yet, despite this progress, the mood in 2024 has been flat. A year of political and regulatory turmoil with concerns over the EU’s AI Act, the challenges identified by Mario Draghi’s report and Europe’s ability to support breakthrough companies to commercialisation.

It’s easy to lose sight of the whole picture. We saw an opportunity with our tenth report to look further than the last twelve months, and instead to bring a longer-term perspective, from which we can learn to navigate the challenges we face.

Over the decade, Europe’s ability to attract and grow talent, unlock capital and raise our ambition level has been transformed. There’s been a 10x increase in the pool of capital available, we’ve built a world class talent pool in which to invest, and, crucially, we’ve seen our first major shift in mindset. There is a greater public understanding of entrepreneurship, the attractiveness of the start-up career path, and more ambition.

We’re seeing more start-ups, more ambitious ideas, built to solve harder problems. The overall universe of companies has grown 4.7x in the last decade, with as many early stage companies as any other region and an 8x increase in growth stage firms.

This has given Europe world class returns and - over the long-term - a growing track record of exits.

Cumulatively, we’ve seen close to $1 trillion in realised value from IPOs and M&A over the past ten years.

Europe is building a differentiated position, not just in nurturing world leading talent from its many universities, but in then allocating its resources to solve the needs of future generations. We demonstrate a focus on solving the hardest problems from renewable energy to carbon removal and preventive care. And we’re showing leadership in a number of clusters from AI to fintech to SaaS and chipmaking. 

Yet despite this incredible progress over the decade, we have to acknowledge there’s real concern across the ecosystem about the way forward today. 

Our survey records frustrations about the continued challenges we all face.  We’ve organised these barriers to success under ‘six keys’ to unlock the future European tech deserves. These span from unlocking capital at scale, to liquidity, to customers, to regulatory dynamism, global talent competitiveness and commercialising R&D.

We must support those who are finding new ways to tackle old problems. An example is the ‘28th Regime’ or EU Inc, as it’s sensibly been rebranded, an EU legal framework that would allow businesses to operate in a single market. This would scale back bureaucracy and scale up ease of doing business across European borders. 

There are fears that these challenges could erode the future success the ecosystem has set itself up for. 

Bold, positive action is needed. And, to make that action stick, confidence is essential. We must support those who are finding new ways to tackle old problems. An example is the ‘28th Regime’ or EU Inc, as it’s sensibly been rebranded, an EU legal framework that would allow businesses to operate in a single market.

A key issue which consistently hampers Europe’s scale up ambitions, is the growth funding gap.

Over the past decade, Europe underfunded its growth companies to the tune of $375 billion which still doesn’t come close to the trillions invested in the US

That’s a huge difference. Imagine where Europe will be if we solve it. Investment from pension funds and major insurers - which currently allocate just 0.01% of their $9 trillion capital pool into European venture capital - provides the beginnings of the solution. 

Solving this could be the difference between our best and brightest companies scaling from Europe, vs being forced to relocate to the Valley. But while these solutions are right in front of us for the taking, they require a further generational shift in mindset to be realised. We must stop comparing our journey to the US, and instead, forge our own path.

Technology is about having the resilience and drive to solve incredibly hard problems - the sector, by its nature, forces us to think several years into the future. If rather than focusing on the scale of opportunity, we’re instead disappointed by the shortcomings of today, how can we have the growth mindset to build for a longer-term future? 

This mindset is, in our opinion, the central barrier to Europe’s success. If we let our actions be clouded by fear and led by conservatism, we’ll undo the very thing that has been key to our success until now, and in the future.

So now we leave you with data to inspire you about Europe’s way forward.

At a conservative estimate, ten years from now Europe should be an $8 trillion ecosystem, with a 300% larger job market of 20 million people, and capital unlocked for scale. The brightest, boldest minds will build from Europe, solving our society and economy’s hardest problems, and unlocking the first trillion-dollar companies from the region. 

Conscious, dynamic and ambitious, but most of all - unprecedented. A technology superpower for a new generation.

We hope you enjoy reading this year’s report. Thank you.

With a talent pool expanding at 24% annually and a tenfold rise in venture financing since 2015, Europe has turned tech and innovation into an economic pillar. 

A few takeaways from this year’s report:

Talent Boom – Europe’s tech workforce has soared to 3.5 million and is on track to match the U.S. in five years. There’s been a clear shift toward entrepreneurship, with seven times more talent now working in venture-backed firms than in 2015.

Capital Surge – Since 2015, $426 billion in venture capital has been deployed to Europe, and 2024 is on track to be a $45 billion year. With growing support from European pension funds, even more capital may come online.  

Sector Strength – Europe’s tech landscape is diversified, from AI to fintech to climate tech. More than 20% of funding goes to sustainability-focused companies—double the U.S. share. In fintech, always a European strength, 17% of 2015 Seed-stage companies have reached a 6th round of financing since.

Scaling Potential – With over 35,000 startups and a remarkable unicorn count, there’s huge untapped potential for investors ready to address the growth-stage funding gap.  Pro-innovation regulatory schemes can only help.

We’re honoured to partner with Atomico to bring you this report — and we look forward to continuing to play a leading role in this ecosystem’s next decade. We can only imagine what AI-powered innovations are around the corner. 

Our teams have played a crucial part throughout this period, supporting innovators to grow and deliver positive change for their business, their customers and the world. We have therefore witnessed firsthand the rapid evolution which has taken place. Europe has now firmly established itself as a leading global tech hub, fostering an environment for innovation and growth which has created more new technology companies than any other region and attracted a 10x bigger capital pool over the period.

Europe’s funding landscape has experienced unprecedented investment growth. Today, European startups have access to a robust funding environment, with VC firms, institutional investors, and corporate venture arms increasingly committed to supporting high-potential companies from seed stage through to IPO. From 2015 to 2024, European startups and scale-ups attracted $426 billion – nearly ten times the $43 billion raised between 2005 and 2014.

This surge reflects not only rising confidence in European tech but also the region’s emergence as a global powerhouse for innovation and investment. Europe now boasts a formidable talent pool, with over 3.5 million skilled tech professionals fuelling this momentum and positioning the region for continued growth. This has led to Europe becoming a global hotspot for early-stage startups, now hosting around 35,000 early-stage companies, more than any other region.

It’s encouraging to see that funding across Europe is going into sectors which have the potential to solve huge societal problems.

In 2024, 21% of all funding raised in Europe went to companies related to sustainability, nearly double the ratio for the US, which sits at 11%. This emphasis highlights Europe’s commitment not just to growth but to cultivating a tech landscape aligned with environmental and social responsibility and long-term impact. Europe’s fintech sector stands out as another success story, solidifying the region’s reputation for financial innovation. Notably, 17% of all fintech startups that raised seed funding in 2015 reached a 6th round or more after that, the highest rate across all sectors in Europe.

Despite building a strong foundation, Europe faces a unique set of challenges. Startups face considerable obstacles in scaling beyond the early stages, due to regulatory complexities, talent shortages and a significant growth funding gap. US tech startups are twice as likely to raise a growth stage $15M+ round than European firms, leading to a notable disparity in the number of companies that successfully transition from startup to growth stages. Over the past decade, this gap has amounted to an estimated $375 billion in underfunding for European growth-stage companies. Without sufficient growth capital, promising startups often struggle to reach their full potential or are forced to look beyond Europe for resources.

One solution lies in attracting greater investment from pension funds and major insurers, whose contributions could provide the stability and scale that Europe’s later-stage startups urgently need. Presently, European pension funds invest just 0.007% of capital into global venture capital, compared to 0.029% into global venture capital by their US counterparts. To match the US in supporting high-potential startups, Europe would need to triple this investment rate. Increasing pension fund and institutional investments would not only help bridge the funding gap but also strengthen Europe’s overall competitiveness, creating a stronger pipeline of funding across all stages.

Europe is well placed to seize the opportunity and effectively support the next generation of innovative startups on their growth journeys.

Through a blend of robust funding networks, accelerator programs, and a collaborative ecosystem, Europe has become a nurturing ground for founders who are advancing impactful solutions across industries. This extends far beyond funding, encompassing mentorship, cross-border collaboration, and knowledge-sharing that equip startups to scale globally.

By partnering with some of Europe’s most innovative, venture-backed businesses and their investors, we’re fully committed to accelerating their success. Our focus is on continuing to unlock global opportunities and to enable greater access to growth resources for innovative businesses across the region. Our mission is to empower trailblazing entrepreneurs to develop bold growth strategies, drive economic evolution, and shape the future of the Europe’s tech sector.

Atomico's report reveals the transformation of Europe’s tech ecosystem and its vast potential for the coming decade. We are excited to see what’s on the horizon. Fast-moving sectors such as space tech, life sciences, and artificial intelligence are poised for significant evolution. This momentum will foster a continuous stream of innovation from startups across Europe, further enriching the tech landscape and reinforcing the continent's position as a global leader.

However, just like the mobile revolution and the rise of the internet, technologies that may seem to burst onto the scene actually stand on the shoulders of years, if not decades, of prior innovation.

Cloud computing was a radical idea when AWS launched Amazon S3 and EC2 in 2006. When Atomico published Europe's first State of European Tech report in 2014, the region's global technology ambitions seemed nascent. Ten years on, as Atomico's landmark State of European Tech Report 2024 shows, we're witnessing a transformation; a $3.2 trillion ecosystem with more startups than any other region globally. As for AWS, we have grown to more than 200 fully-featured services in data centers globally, reaching 245 countries and territories.

Generative AI has its roots in well-established areas of innovation, such as Artificial Intelligence and Machine Learning, Mathematics, Computer Science, and High-Performance Computing. Similarly, access to investment capital and world-class researchers is not a new development. This all begs the question of why Generative AI is happening now. In addition to the recent hyper-convergence of the factors above, there are two things coming together to drive the exponential innovation we call Generative AI: First, the capacity of computing infrastructure at supercomputing scale can now -- for the first time in history -- run these models. Second, we can now build and deploy supercomputing scale in real-time via the elasticity and global accessibility of Cloud Computing.

Europe has a long and distinguished history in these fields, and we are seeing top universities and researchers establishing successful AI Startups.

Many founders come from not only Computer Science and Mathematics backgrounds but also with High-Performance Computing experience. The UK ranks third globally in AI funding, with $4 billion invested in 2024, while Germany and France each contribute over $1 billion. European startups reflect the value areas of their regional markets, including being twice as likely to build companies addressing fundamental societal challenges such as sustainability, with 21% of European funding going to sustainability-focused companies, compared to 11% in the US.

Europe's technical talent pool has grown at a remarkable 24% CAGR since 2015, putting the region on track to potentially align with where the US is today within five years. More than 35,000 early-stage companies are active across the continent, and we've seen an eightfold increase in growth-stage companies over the decade. Despite these successes, regional challenges still exist. European tech startups are half as likely than their US counterparts to secure a $15M+ venture funding round, creating a growth-stage funding gap of $375 billion over the past decade. But the momentum forward is clear. The capital pool has grown tenfold in ten years, and new technology-focused institutional investors are entering the market with enthusiasm. For example, 17% of capital went to deep tech in 2015. Today, it commands 33% of all investment.

The ambition and focus of European innovation are evident in AWS’s daily work with founders.

In our recent Global Generative AI Accelerator program, our European cohort exemplified this: Consider Phagos, using billion-parameter AI models to revolutionize antibiotic drug development, or Odyssey, transforming how visual stories are created with Hollywood-grade visual AI. When Latent Labs develops next-generation biological models, they're not just pushing technical boundaries; they're addressing fundamental human challenges.

Looking forward, Europe's technology community is well-poised for a new phase of growth. We're seeing new AI powerhouses emerge from experienced founders and world-class researchers, like H Company in France or Black Forest Labs in Germany, redefining image generation in a category that didn't exist five years ago. With seven times more people working in venture-backed companies compared to 2015, and more than 350 billion-dollar firms already in flight, the flywheel is spinning faster than ever.

The story in this year's State of European Tech report is about more than numbers. It’s about Europe charting its course with a global technology ethos. Combining commercial ambition with conscious purpose, the region is creating a new model for technological progress. The future of technology is global, and Europe is playing a critical role in forging that future. At AWS, we couldn't be more excited to be part of this journey.

Yet, we know that building companies is hard. Founders today struggle with existential problems—everything else is secondary. From funding and growth to AI and regulation, founders are navigating a challenging landscape.

This year marks the tenth anniversary of the State of European Tech report. From the very beginning, Slush has been part of the journey, growing alongside the European tech ecosystem and witnessing its evolution. It’s a journey that has demanded relentlessness, endless curiosity, and determination to tackle the hardest challenges out there. This is the perfect moment to reflect back and see how far we’ve come—and what lies ahead.

Over the past decade, Europe has reached extraordinary milestones. Today, Europe produces more technology companies than any other region in the world, thanks to a transformed talent landscape, a tenfold increase in venture capital since 2015, and a radically positive shift in the perception of entrepreneurship.

While we should be proud of these achievements, this is only the beginning. To fully realize our potential, we need to rethink how entrepreneurship works—how we support it, fund it, and scale generational tech companies. The 2024 State of European Tech report comes at a pivotal time. Despite the promising developments in early stage funding, the $75 billion gap in growth funding is a major challenge for the ecosystem as a whole. European startups are only half as likely as U.S. startups to raise large funding rounds, which could be detrimental to Europe’s potential to lead the next wave of tech innovation.

The path forward is clear but requires persistence. With talent, capital, and a commitment to innovation, Europe can achieve what once seemed impossible: becoming the most attractive place to build and scale generational companies.