European Telecom Technologies Landscape (Jolt Capital)

Summary

• Over the last 10 years, more than €23,0b has been invested in Telecommunication Technologies across over 2,1k equity deals, with stable investment levels since 2020.p.8
• Europe accounts for 3,430 companies in the telecommunication sector, with an average of 8% of European telecommunication investment opportunities integrating AI into their business.p.12
• The telecommunications market is highly integrated, with 70% of European companies participating in at least two sub-domains.p.13
• Since 2016, it took an average of 5-7 years for a European company to reach €20 million in VC/PE funding, compared to less than 4 years in North America.p.15
• The telecommunications 'Hidden Universe' of unbacked companies with at least 5 FTEs comprises over 5,700 companies, representing 72% of all telecommunications firms.p.17
• Telecommunication companies hold approximately 44k active patents, with European and Asia & Oceania companies generating 47% of them.p.19
• European telecom companies average an exit value of €450m, representing 33% of exit rounds and 26% of total exit value over a 10-year period.p.28

Key insights

1. Europe captures an average of 30% of global telecommunications tech deals while attracting 19% of total capital raised.p.8
2. Networking Technologies shows the highest proportion of AI integration among European telecommunications sub-domains.p.12
3. AI-related telecommunication companies captured 22% of European VC investment rounds in 2023 despite accounting for only 8% of total companies.p.14
4. Almost half of AI-related telecommunications companies have raised VC/PE funding, corresponding to a hidden-to-funded multiple of 1.3x.p.17
5. North American companies and Taiwan lead IP filings in the 'Computing & Calculating' category, holding 56% of related patents.p.20
6. Asian companies have drastically increased their share of top 10% high-quality patents from 14% in 2010 to 39% in 2022.p.24
7. Strong intellectual property is broadly present within unbacked 'Hidden Universe' companies, notably concentrated in Instruments and Telecommunications.p.26