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Whilst 2020 was a successful year for the tech and digital markets in the UK and Europe with over €38.5bn raised, the first half of 2021 has already surpassed this figure with a record €43.8bn venture capital raised in the first half of the year so far. This raised capitol is impressive, considering the number of venture deals signed in 2021 so far is around half the amount agreed from the previous year. In 2020, a total of 5,200 funding rounds were generated, whereas already 2,700 have been signed this year, and this is growing.
The Swedish firm FinTech firm Klarna has successfully raised over $1.6bn over two financing rounds in the first six months of 2021. In addition, German stock-trading app, Trade Republic, has raised over $900m in May alone in 2021. And it’s not only European tech companies which are thriving in the European market this year. Southeast Asian start-ups have generated $4.4 billion of investment in the first half of 2021. Whilst most of these deals have been in series B or series A funding, 10% generated were in Series C funding. This showcases the UK and Europe as growing leaders in the technology markets for emerging East Asian companies to enter and expand in.
European based tech firms have been generating far greater revenue than the previous year, appearing to somewhat defy the economic uncertainty brought on by the 2020 COVID 19 pandemic. In stark contrast to industries such as aviation, the tech and digital industries have largely grown during the pandemic due to acceleration in online and digital services. Health tech companies in Europe have drastically grown in recent years, increasing from $8bn in 2016 to $41bn in 2021, largely driven by the implementation of telemedicine, clinical operation software and insurtechs, alongside the increased utilisation of remote monitoring, AI-associated products and digital therapeutics. The UK in particular is emerging as a global leader in health tech. In 2020, the UK was the 3rd global leader for health tech investment at $2.3bn, next to the US at $38.6bn and China at $12.2bn, which firmly places the UK as a strong market for global companies to enter.
In Europe, a proposed implementation of the European Digital Markets Act (DMA) was outlined in December 2020. If passed, this legislation by the European Commission would ensure a higher degree of competition in the European digital markets. This proposed legislation would ultimately prevent large tech corporations, such as those in social media, from abusing their market power and allowing more new smaller companies to enter the market. The DMA would be highly significant in the market entry of East Asian start-up companies and SMEs in the tech and digital sectors, increasing their market share and exposure across Europe.
