Europe has one-third of the world’s top tech startup scenes for 2020, and Forbes even hailed the region as “the future of startups.” London, Paris, and Berlin—and each capital’s country as a whole—offer rich startup ecosystems and attract funding both domestically and from abroad.
European startup news-media site, Sifted, recently released its list of Europe’s top startup cities—each of which ranks among the top markets listed on the Global Expansion Tech Index™, found in Velocity Global’s 2020 State of Global Expansion™ Report: Technology Industry.
To determine a country’s overall ranking, the report’s index combines a variety of factors, such as the ease of navigating the regulatory landscape, availability of tech skills in the local labor market, and quality of infrastructure, among others.
#1 Tech Startup Hotspot: The United Kingdom
Despite Brexit, the UK still ranks among the top markets for expanding tech firms in 2020, with London topping other European cities in terms of startup generation. While the country leads other top tech markets in venture capital funding from foreign investors, accepting a record-setting $11 billion in 2019. When combined, Europe’s next-largest markets, Germany and France, still attracted less funding.
Venture capital funding for UK tech firms increased by 44% in 2019. In total, London is on-par with Silicon Valley, New York, and Beijing for most-funded markets. The UK surpassed the U.S. for foreign investor-backed investment per capita. In the past year, London’s software development and programming company count grew 14%, adding 4,752 newcomers to its booming tech scene.
#2 Tech Startup Hotspot: France
France’s startup ecosystem grew 38% in 2019, thanks to supportive government programs and an influx of investment. AI startups continue to grow rapidly, with 432 AI-related startups calling France home and an increase of 120 startups since 2018.
The French government identified AI as a critical technology that is central to improving France’s economy. France now has the largest concentration of AI research labs in Europe, and is the top European market for U.S. tech firms, with 51% of tech executives citing it as their first choice for expansion into the region.
In 2017, Paris opened Station F, the world’s largest startup incubator. Station F houses tech startups, as well as established giants like Facebook and Microsoft. The government hopes to further establish France’s position as an AI- and tech-forward country. In the first half of 2019, French tech startups raised $634 million—$13 million more than the UK during the same year.
#3 Tech Startup Hotspot: Germany
Germany as a whole remains one of the world’s top tech destinations, but Berlin accounts for 50% of the country’s tech startup count, and 50% more female founders than other German cities.
Berlin boasts a truly international startup landscape; 50% of the city’s startup teams come from other countries. In Berlin’s multinational startup scene, English is the language of business, making it an easier move for U.S., UK, and Australian tech firms that view Berlin as a global expansion destination.
Berlin tech startups boast the most external capital for new businesses, with more than €2.6 billion in startup funding in 2018. In e-commerce alone, Berlin startups took in €1.6 billion.
Berlin’s tech startup scene diversified over the past few years, with startups expanding into the adtech, fintech, AI, and Internet of Things (IoT) spaces. This diversity invites startups of varied backgrounds to the German capital and means Berlin’s talent pool presents opportunities for building a qualified team.
Expand into Europe’s Tech Startup Hotspots with an Experienced Partner
Silicon Valley is no longer the primary option for tech firms looking for top talent and a like-minded, growing tech community. Europe’s top markets for tech firms boast capitals rivaling the Valley in terms of talent, innovation, and growth—and firms from across the world relocate to these cities daily.
Velocity Global helps tech startups and seasoned tech veterans alike find and expand into the right international markets for their goals. With global expansion capabilities in more than 185 markets, including each city found in this post, we help you establish your global presence quickly and compliantly.
Want to read more on how tech businesses are approaching global expansion in 2020? Download our 2020 State of Global Expansion™ Report: Technology Industry.