A third of European tech start-ups could be damaged by coronavirus crisis
- Credit: PA
A third of Europe's tech start-ups could be damaged by the impact of the coronavirus crisis, just as they had hoped to gain the advantage over UK rivals distracted by Brexit.
New figures show that 6,000 European tech companies could lose customers, revenues and have to cut staff, as the impact of Europe's lockdown takes its toll. Transportation startups, including those in the travel and tourism sector, and companies like e-scooter and e-bike operators, are among those most badly affected.
Europe's continuing lockdown has also caused venture capital investment in the tech sector to fall and industry experts say the figures will deteriorate further this month and next.
You may also want to watch:
However, around a fifth of startups should be able to expand their business during the pandemic, in particular those involved in online healthcare, communication technology including video conferencing and online grocery stories could do well out of the crisis.
- 1 The only Brexit export boom is from UK businesses rushing to Europe
- 2 Boris Johnson proposes saving United Kingdom with 'Project Love' plan
- 3 MEPs again refuse to ratify Brexit deal amid concerns No 10 is flouting conditions
- 4 The stench of scandal seeping out from Britain
- 5 Former Brexit secretary 'privately agreed' with Gina Miller's court action over Article 50
- 6 How the vaccines have shifted opinions over Brexit
- 7 PMQs: Commons speaker reprimands Boris Johnson over Greensill response
- 8 Tory candidate under fire after describing Brexit chaos as a 'hiccup'
- 9 PRINCE PHILIP: Why this Danish, Greek, German immigrant epitomised Britain
- 10 Major and Blair were right about Brexit and Northern Ireland
The figures were released to mark the launch of European Startups, a project aimed at propelling Europe's startup economy to the next level through online data, research and events. The project's inaugural report examines how fit the tech sector is across the 27 EU states.
P?teris Zilgalvis, who heads up the European Commission's Unit for Digital Innovation, said: 'In just weeks Europe has effectively shut down much of the infrastructure that it has taken for granted for decades. This change is both destroying traditional business models and creating new opportunities, often for emerging tech companies.'
'Fortunately the European tech ecosystem faces this crisis from a position of strength, having raised record levels of capital in 2019 and demonstrated strong levels of growth. The coming months will be a huge challenge to the startup sector, but it is more than capable of rising to it,' Zilgalvis said.
Across the European Union a strong and ambitious tech sector has thrived in recent years. Over 100 venture backed companies have reached a $1 billion valuation and founders have global ambitions.
Europe's tech stars include Adyen, from Holland, Spotify, from Sweden and Farfetch, based in London with a Portugese founder. In 2019, European startups, including those in the UK, raised €38.8bn in venture capital, up 42.6% on 2018's €27.2bn.
Start-ups across the continent have provided approximately two million jobs in 2019 and are adding more new jobs each year than any individual sector.
Avi Meir, CEO and co-founder of TravelPerk, said: 'The current crisis has affected us all, but I'm confident that the tech sector will not just survive but, eventually, thrive again. The European tech ecosystem was in a good place right up to the start of March, with companies raising money and hiring in droves. The crisis is exposing many areas where tech-driven solutions could help people, society and business. In time we will be able to get back to business and will make even faster progress than we did before.'
Daniel Keiper-Knorr, partner at Speedinvest, said: 'European collaboration across national borders that unites public and private investors is needed now more than ever. As a VC founded 10 years ago in Vienna that is now invested in 28 countries across Europe, we know this all too well. Central tech hubs like London, Paris, Berlin, Madrid and Stockholm are important, no question. But good entrepreneurs and talent grow everywhere and we cannot afford to lose them. The coming weeks are of critical importance. How we respond could potentially impact the economy for the next decade. We owe nothing but our very best to the current and future generation of entrepreneurs.'
In a bid to help European tech firms, EuropeanStartups.co is creating platform for macro-level trends and insights to help direct funding decisions, drive discussion and policy making around the current crisis, and the wider ecosystem.
• Find out how to register to join the platform online here.
Become a Supporter
The New European is proud of its journalism and we hope you are proud of it too. We believe our voice is important - both in representing the pro-EU perspective and also to help rebalance the right wing extremes of much of the UK national press. If you value what we are doing, you can help us by making a contribution to the cost of our journalism.