Better funding environment for European VC funds

In its recent monthly bulletin the Go4Venture team reports about transactions during August. It was another busy month. Overall there is a feeling that the industry is becoming less seasonal: clearly fewer Europeans are taking the whole of August off.

One of the reasons for the continuing activity is a slowly improving macro environment. Europe, which was seen as a complete write-off by global investors only last year, is now attracting the attention of those same investors. Talk about a change in investor sentiment! From a practical standpoint, this means that European venture as an asset class is no longer so taboo, and General Partners (GPs) trying to raise new funds are reporting a better funding environment for European VC funds. You can see that in the number of funds which are openly disclosing their fund-raising efforts, clearly displaying confidence in reaching their objective. In the last month, there were positive news from half a dozen funds including: Serena Capital, TIME Equity Partners, Adara Venture Partners and WHEB Partners.

The authors see other signs of growing momentum in European venture, such as the increasing use of debt in VC-backed companies, showing growing sophistication of market participants and increasing confidence in technology from investors.

On the exit front, August was surprisingly busy in Europe (especially in the context of a continually flat global market). Overall more than €1.5bn worth of exits in August alone, even if (strictly speaking) venture-backed companies only represent 20% of the total. The authors of the bulletin mention the sale of Novaled to Samsung Electronics for €260mn, a fantastic return compared to the estimated €29mn invested in the company. In Switzerland there were two exits in August which we reported about at startupticker.ch: the sale of Endosense to St. Jude Medical and the sale of Neocutis to Merz Pharma.

The bulletin can be downloaded at the website of Go4Equity.