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The European tech ecosystem will once again see a record level of capital investment in 2018. Total investment is projected to hit $23 billion, comfortably exceeding the $19.6 billion invested in 2017 and now 4.4x up compared to the levels of investment from 2013.

Capital invested ($B) and # of deals per year

Legend

  • Capital invested ($B)
  • # of deals
Note:
All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, grants. Please also note the data excludes Israel. 2018 based on 9M to September 2018 and projection for Q4 2018 based on Q3 2018

For additional context on annual capital investment into the European tech ecosystem, it is important to understand there is a material trend in effect that means that many rounds are only captured with a significant delay (see note). This 'reporting lag' means that the final totals are not known until a significant time period has elapsed after the end of the year in question. As such, we have indicatively adjusted the annual totals to account for this reporting lag to enable a like-for-like comparison of overall investment trends at the European level.

Capital invested ($B), annual, 2013-2018, adjusted for reporting lag effect

Legend

  • Capital invested ($)
  • Adjusted for reporting lag
Note:
The reporting lag is the difference between the date of a round’s disclosure and the reported date of a round’s occurrence, resulting in a material % of rounds only being added with a long delay. This is estimated at 97% for 2017 and 90% for 2018.

For additional context on the annual number of deals in the European tech ecosystem, it is important to understand there is a material trend in effect that means many rounds are only captured with a significant delay (see note). This 'reporting lag' means that the final totals are not known until a significant time period has elapsed after the end of the year in question. As such, we have indicatively adjusted the annual totals to account for this reporting lag to enable a like-for-like comparison of overall investment trends at the European level.

Number of rounds, annual, 2013-2018, adjusted for reporting lag effect

Legend

  • # of deals
  • Adjusted for reporting lag
Note:
The reporting lag is the difference between the date of a round’s disclosure and the reported date of a round’s occurrence, resulting in a material % of rounds only being added with a long delay. This is estimated at 90% for 2017 and 70% for 2018.

In 2013, $1billion of capital invested per quarter in Europe was the norm, but as the ecosystem has evolved that bar has consistently been raised higher. Europe has now seen more than $3 billion invested per quarter for 15 consecutive quarters and even $5 billion per quarter for the past 6 straight quarters.

Capital invested ($B) and # of deals per quarter

Legend

  • Capital invested ($B)
  • # of deals

Of course, the exact quarterly investment amounts per quarter are subject to ups and downs so it is helpful to look at trailing 12-month totals to get a sense for the 'smoothed' long-term investment trends in the region. On this basis, the overall trajectory of the European tech ecosystem since late 2013 is very clear.

Trailing 12-month capital invested ($B) and # of deals by quarter

Legend

  • Capital invested ($B)
  • # of deals

Sentiment within the European tech ecosystem around the capital raising environment is broadly positive. 72% of European founders believe that it has either stayed the same or has become easier to raise VC in Europe in the past 12 months. This is very similar to the response from 2017's survey, where the equivalent response was 73% of founders.

In your opinion, is it easier or harder to raise venture capital in Europe than it was 12 months ago?

Legend

  • Easier to raise capital
  • The capital environment remains unchanged
  • Harder to raise capital
Note:
Founder respondents only.

There are interesting perception gaps between founders and investors at the sub-regional level. The generally high levels of optimism among investors about the changing state of the capital raising environment in Europe over the past 12 months stand in contrast to a more mixed view from founders in the UK, DACH and Eastern Europe.

In your opinion, is it easier or harder to raise venture capital in Europe than it was 12 months ago?

Legend

  • Founders, Easier to raise capital
  • Investors, Easier to raise capital
  • Founders, The capital environment remains unchanged
  • Investors, The capital environment remains unchanged
  • Founders, Harder to raise capital
  • Investors, Harder to raise capital

Founders remain upbeat about the environment for raising capital in Europe.

Raising capital in Europe

71%
of European founders believe the capital environment has remain unchanged over the past 12 months, or become easier

2018 has again set a new record for total capital invested in the European tech ecosystem.

Capital investment in Europe

$23B
Projected total capital investment in European tech in 2018, up 4.3x since 2013.

Europe has seen a 7x increase in the number of large rounds of $50M+, growing to 70 rounds in 2018 from just 10 in 2013.

Capital invested ($M) and # of deals by round size

Legend

  • Round size $0-2M
  • Round size $2-5M
  • Round size $5-10M
  • Round size $10-20M
  • Round size $20-50M
  • Round size $50M+
Note:
2018 annualised based on data to September 2018.