Venture Investment in Europe Fell 14% in 2011
By VisionwizTeam at January 30, 2012 | 5:10 pm | Print
Venture capitalists put €4.4 billion into 1,012 deals for European companies in 2011, a 14% decline in investment and 19% decline in deal flow from 2010, according to Dow Jones VentureSource.
This is lowest annual deal count for Europe since VentureSource began tracking the region in 2000.
The fourth quarter was the weakest of the year in terms of deal activity as 194 deals collected €1.1 billion, a 43% drop in deals and 38% decline in investment over the same period in 2010.
Weakness in the fourth quarter is notable as it is traditionally one of the most active quarters for deals.
“Venture capitalists are having difficulty raising funds as the Euro crisis weighs on limited partners’ minds and fewer companies are finding exits. This has naturally led to a slowdown in investment.
With less capital flowing into venture firms, there’s less to invest in start-ups,” said Anthony Sheldon, research manager, Dow Jones VentureSource.
The median size of a European venture capital deal was €2 million in 2011, on par with 2010.
In all of 2011, 148 companies exited via an M&A, raising €7 billion, a 12% decline in deals and 7% increase in capital raised.
In all of 2011, 14 venture-backed companies went public, raising €695 million, a drop in IPOs but an increase in capital raised from 2010 when 18 IPOs raised €438 million.
VCs Focus on Web, Consumer Services Investment Passes IT for First Time Since 2001
For the first time since 2001, the Web-heavy Consumer Services industry raised more capital than the Information Technology (IT) industry.
Consumer Services companies raised €1.1 billion for 223 deals in 2011, a 63% increase in investment despite a 6% drop in deals from 2010. It was the industry’s strongest year for investment since 2001.
IT companies raised $812 million for 270 deals in 2011, a 50% decline in investment and 25% decline in deals.
Country Perspectives
Europe’s four major countries for venture investment – the U.K., France, Germany and Sweden – witnessed record-low deal activity in 2011.
· The U.K. remained the favorite destination for venture capital investment in Europe in 2011. Companies in the U.K. raised €1.2 billion for 274 deals, a 36% decline in investment and 17% decline in deals.
· France came in second place as companies raised €728 million for 217 deals, a 15% decline in investment and 18% decline in deals.
· Germany came in third as companies raised €475 million for 120 deals, a 23% decline in investment and 26% decline in deals.
· Sweden came in fourth as companies raised €299 million for 67 deals, a 7% increase in investment despite a 36% decline in deals.
