State of European Tech 2025: A roadmap to unlock growth

European tech now worth $4trn, 15% of European GDP, and almost 40,000 funded companies
Streamlined regulation, talent, capital mobilisation, and risk culture key to future growth

Brussels, Belgium – Founder optimism in Europe is at a 10-year high, yet European policy still needs to fix structural gaps in the VC ecosystem to release the full potential of the continent’s tech start-ups, according to the State of European Tech report, produced by Atomico with key data contributions from Invest Europe. The 11th edition of the benchmark data analysis and survey proposes a roadmap, and raises a rallying call, to power Europe towards its first $1 trillion market cap tech company.

Europe's tech sector is now worth nearly $4 trillion, some 15% of Europe’s GDP, and boasts almost 40,000 funded tech companies, up from 13,000 in 2016, the report from Atomico, an Invest Europe member, states. It shows VC investment up 7% in 2024 to $44 billion, European pension fund allocations rising by 55%, and highlights European VC outperforming US funds, while beating European public markets by 10 percentage points over 10+ years. As a result, 42% of entrepreneurs say it is more attractive to be a founder in Europe today than a year ago, and 51% make building in Europe core to their mission.

Atomico’s report identifies four key ambitions release further tech industry growth:

Make it easier to build, grow and sell across European borders, at scale, including streamlined regulation and single pan-European company framework.
Make Europe the home of choice for world’s most ambitious talent, including a single, fast-track visa scheme that makes relocation frictionless, and staying in Europe and obvious choice.
Mobilise Europe’s own capital to power deep, full-stack markets, including scaling national models like Tibi, WIN and Mansion House across Europe to drive pension and savings investment.
Strengthen risk culture as foundational infrastructure, including a shift in how Europe talks about risk to celebrate ambition, and reframe entrepreneurship and experimentation positively.

Eric de Montgolfier, CEO of Invest Europe, commented:

"Founders and investors are looking at Europe with fresh eyes as the continent stands outs for its stability and predictability, as well as its goals for tech sovereignty and growth. VC in Europe has undergone a step change over the last decade and still has much more potential to unlock. Invest Europe fully supports and echoes Atomico’s ambitions to strengthen Europe’s VC ecosystem and is actively working with policymakers to create the conditions for start-ups to flourish.”

The State of European Tech digs into key investment themes, such as deep tech and AI, which captured 36% of VC funding in 2025, and highlights a 55% increase in defence tech funding.

For the full report, visit https://stateofeuropeantech.com/

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