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Europe’s Surprising Tech Success

Europe is often viewed as a digital laggard, running far behind the US and Asia. But two new reports tell a very different story, showing how European startups are now taking the lead in artificial intelligence, creating new tech hubs, and attracting investment from traditional industrial stalwarts.

BRUSSELS – Europe is often viewed as a digital laggard, running far behind the frontier-pushing United States and Asia. But appearances are deceiving. In fact, according to a new report by the London venture capital firm Atomico, European startups are now taking the lead in artificial intelligence, building new tech hubs, and drawing investment from traditional industrial stalwarts. Last year, a record-setting $13.6 billion was invested in Europe’s tech sector, compared with $2.8 billion in 2011.

Gone are the days when Europe’s “tech” sector largely comprised consumer-oriented e-commerce businesses – often blatant knockoffs of successful US companies. Today, Europe is the home of real pioneering innovation, led by what Atomico calls “deep tech” – the kind of artificial intelligence developed by Google’s DeepMind. Deep tech accounted for $1.3 billion of European venture investments in 2015, delivered in 82 rounds, up from $289 million, delivered in 55 rounds, in 2011.

Europe’s new tech hubs are emerging in unexpected places, far beyond the early hotspots of London, Berlin, and Stockholm. Atomico pinpoints Paris, Munich, Zurich, and Copenhagen as the cities to watch over the coming years. The French capital, Atomico points out, is already starting to challenge London and Berlin in terms of the number and volume of venture-capital-financed deals.

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