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The number of people employed across Europe in tech startups has jumped 43% in the last four years, making the sector by far the fastest growing and most resilient job creation engine throughout the continent.
That’s according to new data produced by the European Startups project for the Not Optional summit, an event involving Europe’s leading tech founders, investors, policymakers and operators, hosted by Index Ventures and Slush.
The data highlights how a generation of successful European tech founders is helping fuel record-breaking funding rounds and allowing tech companies to create new jobs at scale despite the Covid-19 pandemic causing a spike in unemployment levels across the wider business landscape.
With two million people now employed in tech startups across Europe, the European Startups report predicts as many as 3.2m people will be employed in European tech by 2025. That’s 10% year-on-year growth, with ecommerce, healthtech, fintech, and food verticals all expected to expand.
European VCs are on course to continue the record-breaking fundraising trend seen since 2015, tipped to raise a total of €13bn by the end of 2020.
But the data shows that European startups need at least three times more capital than has been raised in recent years by local VCs, meaning they’re still being propped up by foreign investors. European companies are on track to raise a total of €35bn in capital by the end of the year.
With European tech companies predicted to grow in size over the next decade, the funding gap between what startups need to raise and what is available in Europe is becoming more evident.
“There is no doubt in my mind Europeans will build some of the tech giants of the future. But we need to do more to harness the energy and creativity of entrepreneurs, investors and policymakers and ensure they work together to usher in Europe’s tech-driven future,” says Neil Rimer, cofounder of Index Ventures.
“Europe will benefit from the innovation, growth and jobs that this will bring, but only if it makes supporting startups a strategic priority across the continent that is essential, not optional.”
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