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With another year of venture capital records in the books, it’s time to look forward.

Global data was clear: The 2021 venture capital startup investment cycle was record-breaking; around the world, startups raised more money than ever before, with individual geographies posting all-time hauls.

Africa had a killer year. North America was hot. Latin America was busy. Asia was alight, even under the weight of a regulatory crackdown in China. But Europe. Europe was very busy, something that we explored earlier this week.

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PitchBook data collected on the European 2021 investment cycle pegs venture activity at €102.9 billion, up around 120% from 2020 levels. CB Insights data indicates that European startups raised $93.3 billion last year, up 142% compared to 2020 results. Both sources reported rising volume as well, indicating that the continent did not merely see late-stage rounds push its numbers up.

But there’s potential market chop on the horizon. The recent stock market selloff of key comps to high-growth, richly valued startups is causing tremors. TC has explored the concept, but lest you think that we’re playing some sort of subversive Chicken Little routine, the idea that the venture capital perspective on startup fundraising is changing is something that CNBC, Newcomer and other publications are actively investigating.

In late December, The Exchange asked if the era of super-rich software valuations was behind us. Today we want to expand the question to include all startups and narrow our focus to Europe. What’s ahead for the red-hot startup market this year?

To help us with that question, we corralled Nalin Patel, EMEA VC Analyst at PitchBook, and Christoph Janz, co-founder at Point Nine Capital, to help us dig into what’s ahead for European venture activity.

What’s at stake? The health and continued growth of hundreds of billions of dollars of private-market wealth.

Why Europe could accelerate in 2022

The fact that Europe had a great 2021 could mean two things: That it can’t continue at that pace, or that the ingredients are in place for an even greater 2022. It’s the latter that PitchBook’s Nalin Patel is betting on, with observations concerning both sides of the table.

On the investor side, Patel pointed out that there is a ton of dry powder available from a variety of sources. “International and nontraditional investors including corporate VCs, PE firms and sovereign wealth funds, along with larger traditional VC funds, compete fiercely to invest in fast-growing European startups looking to scale globally.”