A Look at European Venture Capital Activity During the European Crisis (Part 2) – January 2014

by Joel Coulson

  • 30 Jan 2014
  • PE
  • VC

The figures for venture capital activity in 2011 surprisingly reflect that of a more stable region than what Europe actually was at the time, given the mounting debt crisis and quantitative easing being actioned by the ECB to drive borrowing costs down for businesses. In spite of these factors, there was a significant increase in angel and seed stage investments: 160 deals and an aggregate value of €77mn (2010 showed 124 such deals and an aggregate value of €53mn). A possible explanation for this increased activity could be the dire economic conditions and start-ups needing professional direction from venture capital firms rather than a bank loan. A further indication of the robust European venture capital activity in 2011 is the strength of Series B financings; according to Preqin’s Venture Deals Analyst online service, these were the most prevalent venture capital round in terms of aggregate value, with 99 financings contributing €544mn. It was closely followed by Series C with 33 deals but an aggregate deal size of €537mn, suggesting that venture capital confidence was still at healthy levels as these larger sized deals were being pursued. 

2013 became the year of the road to recovery in Europe with a strong surge in Q4 leading to tumbling bond yields in January 2014 off the back of rises in most economic indicators. Preqin data shows that in 2013 there were 1,361 venture capital financings at an aggregate value of €6.3bn – the highest number and aggregate value of deals in Europe since 2007. 2013 had by far the highest number of angel and seed investments, 330, and the highest aggregate value, €174mn. Overall, this indicates the continued support by venture capital investors in Europe, as shown in the rounds mentioned, providing consistent activity throughout the 2007-present period. The long-term outlook significantly improved from 2010 & 2011, as indicated in these angel and seed investments. 

Currently, Venture Deals Analyst has 80 European venture capital deals for 2014 valued at an aggregate value of €349mn. The biggest 2014 YTD deal is a Series E round funding of Delivery Hero, a German e-Commerce firm, which raised $88mn led by Insight Venture Partners.

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