British technology businesses overshadowed their European counterparts this year when it came to value and investment levels, although both have fallen in the face of economic headwinds as the pandemic-fuelled boom has ground to a halt.
In 2021, the UK's tech companies dropped investment from $36 billion to $27.9 billion in 2022 — about three times the level of the second-largest recipient, Germany, on $10.8 billion. London was the most attractive European hub for capital with $19.2 billion of funding, followed by Paris with $9.9 billion.
Last year there was a surge of investment in Europe's tech industry, with a record $100 billion deployed, a number that is expected to fall to $85 billion in 2022, as confidence in the sector cools. The analysis said that this is more than double the amount raised in 2020 of $38.8 billion, which shows how far the European tech ecosystem has developed.
The annual state of European tech report by Atomico, the venture capital firm, shows the impact of the downturn on the sector as valuations have tumbled and job cuts have increased. Since 2015, the research has looked at the health of the ecosystem of both public and private technology businesses in the region.
It described 2022 as a year of two halves because there were soaring levels of investment in technology companies at the beginning of the year, a continuation of the pandemic-fuelled frenzy of 2021, but from July this started to die away as backers became more wary. The last period for which data was provided was when investors had record pools of capital, but it is now being distributed more cautiously - $84 billion was available at the end of 2021.
The market value of European technology companies, including the UK, fell by $400 billion in 2022, from $3.1 trillion to $2.7 trillion.
The number of people who lost their jobs increased rapidly last month. This year, 14,000 tech staff in Europe were laid off, 7 per cent of the global total.