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London Tech Week

7 reasons why European industrial tech sector more than doubled to €74B in 2021

European industrial tech startups have been growing in quantity and quality over the past one year. The combined enterprise value of the sector has multiplied manifold by 120% since 2020 to reach a whopping €73.9 billion. This was revealed in the findings of the second edition of an annual report focused on the European industrial tech ecosystem by Dealroom and leading early-stage venture capital company Speedinvest

In a round-up of the recent report, TFN brings you the top seven findings of the study.

European industrial tech worth €73.9B in 2021

The combined enterprise value of the sector has multiplied manifold by 120% since 2020 to reach a whopping €73.9 billion. It has more than doubled in 2021 on the back of the accelerating pace of late-stage investment. Investors are also increasingly targeting industrial tech startups that are addressing sustainability and climate issues, with investment in this space increasing by 220% in a single year.

Mega rounds in 2021

One extremely important trend that has been witnessed is the mega-rounds of the European industrial technology investments ecosystem in 2021. 

Some of the most significant funding rounds in the last 12 months include data processing company Celonis’ $1B Series D round, robotic solutions platform company Agile Robots’ $220m Series C round and digital freight forwarder Forto’s $240 million Series C round.

As the sector matures, further accelerating growth, the rise of mega-rounds reflects the increasing availability of late-stage funding in the European ecosystem.

The top exits of 2021

The year has already logged in 13 unicorns and $1B+ exits in European industrial tech. About 4.1% of startups have also been classed as future unicorns. This interestingly is higher than the average of 3.4% among VC-backed startups in Europe. This rapid increase in high valuations has been driven by an increase in the number of unicorns across different industrial tech sub-segments. Logistics (144%), procurement (186%) cybersecurity (325%) are the top valued categories, and have shown the highest percentage growth in 2021. 

The most valuable European industrial technology company currently is Celonis (now valued at €10B), which provides process mining software applicable in business areas including logistics and procurement. Other prominent names include Autostore, the Norwegian warehouse robotic automation solution – now valued at €7B.

DACH and Nordics top list

The DACH and Nordics region has been sparked into movement over the past few years, with some standout trailblazers and a growing venture capital (VC) community driving the ascent.

Industrial Tech is fastest growing. MunichЀs TUM is a leader in Industrial Tech

Munich’s TUM is a leader in Industrial Tech. But there are many other academic breeding grounds for industrial innovation and startups across Europe.

Climate focus drives VC investment

EU countries have committed over €2 trillion to help build a greener and more digital Europe. With the future of industry being both digital and green, Europe has entered a new industrial era driven by transformative technologies and the common goal of decarbonisation. 

With World Fund, 2150 VC and Lightrock behind some of the biggest dedicated European climate tech funds announced in 2021, European venture companies have been at the forefront this year.

According to Yoram Wijngaarde, Founder and CEO at Dealroom, the climate crisis presents one of the most urgent global, social and economic threats and demands new measures from heavy industries.

Green New Deal

EU countries have committed over €2 trillion to help build a greener and more digital Europe, NextGenerationEU and a long-term budget. Specifically, 30% of these budgets will be spent on fighting climate change, which provides a valuable incentive for the next generation of industrial tech companies to focus their efforts on solving associated problems.

Last year’s announcement of the EU’s Green Deal also introduced a useful framework within which companies can identify problems and sectors to tackle. The categorisations include areas such as zero pollution, clean and circular economy, energy, sustainable building, smart mobility, food, biodiversity and sustainable finance, and many of today’s leading industrial technology companies are already working on these problems.

Seizing climate change is a crucial priority for governments and businesses alike, and with industry estimating 38% of CO2 emissions on its own, feels Marie-Helene Ametsreiter, Industrial Tech Lead and General Partner at Speedinvest.

Calling it a banner year for industrial technology investment in Europe, she opines that germination in the ecosystem over the one year has been impressive and has immense scope.

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