Where European Investors Hesitate, US Investors See Opportunity

Exclusive data released today by Go4Venture Advisers, a London-based investment banking boutique specialising in tech M&A and financing rounds, has revealed the dramatic rise of US investment into European tech companies over the last five years, demonstrating the coming of age of Europe’s tech scene and the increasing internationalisation of venture and growth funding.

Key findings include:

• US investors now participate in two-thirds of European financings ≥ $10mn.
• UK and German companies together attract 60% of US investment.
• US investment focuses on game-changing plays: later-stage deals, large bets and/or disruptive technologies.
• 50% of US investment is in internet companies, and of that more than a third is in Fintech.
• Since 2010, 10 European companies have each raised ≥ €100mn thanks to US investors’ involvement (compared to just 4 from European investors alone).
• US investors with offices in Europe are naturally the most active, with a group of 5 (Accel, Intel Capital, Highland, Greylock and DFJ Esprit) leading the pack.
• Outside this group of 5, which are well ahead of others, top US investors “roaming” in Europe are surprisingly just as active as those with a European office.
• Leading European investors are adept at involving US investors in their deals.
• US investors are often better pan-European investors than their European brethren.

“The common wisdom is that US investors are wary of investing in Europe. The research we carried out debunks this myth”, commented Jean-Michel Deligny, Founder and Managing Director of Go4Venture Advisers. “A lot has to do with US funds that have a presence in Europe, and have become more active than many local players, but it is also down to the ability of some of the leading European venture firms such as Index and Balderton to draw US syndication partners.”

David Russell, Associate Director, added: “This data shows that the European venture ecosystem is segmenting into smaller, local early-stage or niche investors, and those with the global connections to bring in the kind of investment rounds that back businesses for the entire journey. It proves that European entrepreneurs with global ambitions need to be strategic in choosing their investment partners. A US partner or a European fund syndicating with their US peers is often key to great exits and IPOs, and only this success in the US will allow Europe to build a vibrant local market in the future.”

Deligny concluded: “In some respects, US investors are showing more confidence in the European tech scene than many of the local players, which are often constrained by their home country investment mandate, size of fund and/or risk aversion. By contrast, successful European funds will be increasingly defined by their ability to syndicate with US partners.”