AI investment surges among European startups despite challenges

Cloudvisor, in collaboration with PwC, has unveiled compelling insights regarding the current and future landscapes of European tech startups, highlighting the widespread adoption and investment in artificial intelligence (AI). The report, named "Tech Trends: Current and Future Landscapes of European Tech Startups," examines the technological and investment strategies that are shaping the startup ecosystem across Europe.

The survey incorporated responses from over 700 startups and revealed that more than two-thirds (68%) of startups are already leveraging AI to maximise their performance. Additionally, 58% of startups have indicated plans to invest in AI in the near future. Julius Gregorauskas, CEO of Cloudvisor, commented on this finding, stating, "The European startup landscape is complex and dynamic, focusing increasingly on emerging technologies like AI, ML, and data analytics. Despite economic uncertainties, our report shows that many startups continue to invest strategically in technology to gain competitive advantages and drive efficiency."

AI stands out as a key focus for these startups, with 67% using AI for data analysis and a further 53% planning to do so. This underlines the perceived value of AI in driving innovation and business growth. Linas Stankevicius, Senior Consultant of PwC Lithuania, highlighted the importance of digital infrastructure, stating, "From Web Hosting to AI, Big Data, and beyond, the findings of this report underscore the pivotal role of digital infrastructure and emerging technologies in steering startups towards digital excellence and success."

The report also pointed out that a striking 91% of the surveyed startups are employing at least one emerging technology, with particular emphasis on AI, data analytics, big data, machine learning (ML), and 5G technology. Despite challenges in funding, nearly half (47%) of these startups reported no changes in their technology investment plans, while 11% increased their budgets, demonstrating resilience in continuing technology investments.

Key drivers behind this robust technology adoption include increasing cost-effectiveness (54%) and gaining a competitive edge (38%). These factors are central to startups as they strategise to maximise the return on investment (ROI) from their technology expenditures and position themselves favourably in a competitive market.

In terms of web hosting preferences, AWS emerged as the dominant player, with 50% of startups opting for its services. Following AWS, Cloudflare Hosting holds 27% of the market share, while Google Cloud, DigitalOcean, and Microsoft Azure contribute to 12%, 6%, and 3% respectively.

Further, the report sheds light on other critical infrastructure and communication solutions adopted by startups. WordPress is the leading content management system (CMS), chosen by 67% of the startups surveyed. It is followed by Webflow (24%) and Wix (5%). For analytics and tracking, Google Analytics is utilised by 45% of startups and Hotjar by 26%. When it comes to customer relationship management (CRM), 76% of startups rely on HubSpot, with Salesforce occupying an 18% share. For support and feedback management, Zendesk leads with a 46% market share, followed closely by Intercom at 37%.

The methodologies for this research included analysis of third-party datasets and direct surveys conducted from March to May 2024. These methodologies provided comprehensive insights into the preferences of European tech startups regarding digital infrastructure, communication solutions, and their current and future technology adoption strategies.

This extensive insight into technological trends provides stakeholders within the startup ecosystem with valuable data to make informed decisions and encourage sustainable growth.