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State of European Tech 2020: Finland second in capital investments per capita

In spite of the pandemic, investments in European tech and growth companies are at an all time high.

Mikael Ahlfors / Keksi Agency

State of European Tech, an annual report by Atomico, ranks Finland second in capital investments per capita and finds a resilient European tech scene during a hard-won year.

European tech startups and growth companies are on track to have a record year in terms of capital invested, raising a projected maximum total of 41 billion US dollars, compared to 38.6 billion in 2019. After a sluggish second quarter, investments in the companies bounced back to hit five billion dollars in the month of September – an all-time high.

Contrary to widespread fears at the onset of the coronavirus crisis, investors have not retreated within their national borders to weather the storm. For example, 19 per cent of investment rounds were backed by at least one US investor, up from 16 per cent in 2019.

“2020 shaped up to be the ultimate test of our endurance as individuals and the resilience of the ecosystem in which we work,” commented Miika Huttunen, CEO of Slush. “As we approach the end of the year, it’s becoming clear that Europe has held up staggeringly well.”

The Finnish story

According to the report, Finland is on track to top the 982 million dollars invested in 2019 and hit 1 211 million by the end of the year, making it a destination for the second most capital investments per capita (218.4 dollars) between Sweden (325.9) and the UK (184.2). In addition, Finland is a heavyweight in the number of startups (fourth) and software developers (first) per capita.

Miika Huttunen (left) and Oona Poropudas have been at the helm of Slush during the eventful annum. Image: Slush

“Looks like it’s going to be the first unicorn year for Finland, and these findings are a testament to a solid ecosystem,” Huttunen explains to Good News from Finland. “However it’s not a time to get comfortable but rather double down on our efforts, for a lot of work remains to be done in inclusion and diversity, as well as attracting later-round funding in order to feed the positive ecosystem cycle.”

Espoo and Helsinki clinched top-10 spots among European investment hubs, placing eighth and ninth respectively. Together the twin cities would make up the sixth biggest hub by capital invested, just behind Munich.

“The pandemic will continue to fuel remote operations, and Helsinki has a lot to offer for top talent in quality of life, technical wherewithal and working culture.”

The suburb of Keilaniemi the city of Espoo houses many big names in Finnish business. Image: SARC Architects

The report also brings forth promising data for the future of the European tech scene on the growth rate of new companies. Tech companies founded in 2010 had raised an average of 2.8 billion dollars by their fourth year, whereas companies founded in 2015 had raised 14.4 billion by their fourth birthday. Moreover, an estimated six billion dollars will be invested in purpose-driven companies in 2020.

“This truly is the best time to be a founder, to courageously embrace the uncertainty, to look for patterns in what seems like chaos and to fearlessly build technologies that will make the ‘new normal’ a better normal,” envisions Huttunen.