European venture capital fundraising last year hit €6.4bn — the highest level since 2007 — according to a report by Invest Europe.
According to the association’s new publication, The Acceleration Point: Why Now is the Time for European Venture Capital, nearly 10 per cent of this capital was from North American institutional investors, as Europe’s growing economies, investment ecosystem and tech industry make it an attractive investment destination.
“Global investors are recognising that European venture capital offers a rich A to Z of investment opportunities: trailblazing tech innovation born in cities from Amsterdam to Zurich,” said Nenad Marovac, Invest Europe Vice-Chair and Founder, Managing Partner of VC firm DN Capital.
“Anyone who’s ever played Angry Birds or searched for flights via Skyscanner is benefiting from Europe’s entrepreneurs — not to mention the fintech and life sciences start-ups. Backed by Europe’s experienced VC fund managers, these companies can rival the best in the world for returns to investors.”
Europe represents the world’s largest single market, with GDP growth of 1.8 per cent at the end of last year according to the European Commission. All economies are seeing growth, boosted by the corporate sector, increasing investments and job creation.
Invest Europe’s data shows that VC fund sizes are rising, with 13 funds raising in excess of €100 million last year. This is set to increase further this year with a €400 million EU-backed fund-of-funds to facilitate investment from large institutional investors.
Where the investment's going
Of the €4.3bn total VC investment in Europe last year, fund managers invested 44 per cent into companies specialising in information and communications technology.
The second highest amount, 27 per cent, went to biotech and healthcare, a sector in which European businesses have a strong track record.
The remaining capital was invested into companies focused on energy, financial services, consumer products and business services, according to Invest Europe data.
“With lower company valuations in Europe than in the US and Asia, European venture funds are expected to attract increasing capital over the next five to 10 years, so now is the time for global investors to harness the best opportunities on offer,” said Marovac.
Venture capital-backed companies created in Europe include Swedish music service Spotify, UK travel comparison site Skyscanner, Danish customer service software maker ZenDesk, German online sales platform Auto 1 Group, French car sharing service Bla Bla Car and Finland’s gaming pioneers Rovio, King and SuperCell.
• To download a free copy of The Acceleration Point report, click here