Deeptech, including AI, has captured 33% of Europe's total funding this year, although Europe still lags behind the US and Asia in overall funding amounts.

Sustainability is a significant focus for European tech, with 21% of capital invested in related companies, notably higher than the US's 11%.

Atomico's State of European Tech report marks its tenth anniversary, celebrating a decade of growth and challenges within the European tech ecosystem.

The report compiles data from 41 countries and thousands of industry participants, providing a comprehensive overview of the current state of European tech.

Since 2015, European tech companies have raised an impressive $426 billion, a tenfold increase compared to the $43 billion raised between 2005 and 2014.

Looking ahead, the report forecasts that the value of the European tech ecosystem could reach $8 trillion in the next decade, with a workforce projected to grow to 20 million.

The tech sector in Europe has created nearly 20 million jobs since 2015, employing 3.5 million people and experiencing an annual growth rate of 24%.

Despite this growth, there remains a significant funding gap for growth-stage companies in Europe, as they are less likely to secure large funding rounds compared to their US counterparts.

The report emphasizes the urgent need for increased domestic capital to support European tech and reduce reliance on foreign funding sources.

Currently, European pension funds invest only 0.01% of their capital into local venture capital, which is inadequate given their total assets of $9 trillion.

Notably, one in two European scaleups has sought funding from US investors, raising concerns about potential talent and knowledge drain from Europe.

Sarah Guemouri, a Principal at Atomico, highlights the flexibility of startups in scaling and securing funding as key drivers of innovation in the sector.