European Venture Capital has skyrocketed in 2019

Venture Capital (VC) Investment in European tech companies continues to grow as demonstrated in the state of Europe Report. Compared to five years ago, capital investment in Europe has increased by 124% and since 2018, this number has grown over 39%. So far this year, VCs have invested more than $10B into European tech companies in a single quarter for the first time ever. With $11.6B, 2019 Q2 saw the largest ever quarter for capital invested. The UK, Germany and France have raised the highest amount followed by Sweden and Spain. Switzerland settles at position six with $1.68B in 183 rounds so far in 2019.

Investment by sector
Fintech and enterprise software companies have been the major beneficiaries of capital over the last five years with close to $50B raised – followed by other sectors such as energy, health and food. Collectively the five sectors a boost of more than $11B in capital invested compared to 2018. There are now seven industries – Fintech, Enterprise software, Health, Energy, Transportation, Food and Marketing – surpassing $2 billion capital invested versus only four in 2018. At position 4, Switzerland account for 13% of all investments made in Enterprise Software companies and 10%in Health. The percentage of investment in other sectors is: fintech 4%, Energy 6% and transportation 3%.

Deeptech investments in Switzerland ranks 4th
Investments into European deep tech companies are on track to break another record of $8.4B in 2019, up from $6.7B in 2018 and $3.0B in 2015. Artificial intelligence dominates capital invested in deep tech whilst quantum has yet to make its leap in Europe. With nearly $5B, European companies categorised as 'AI' spearhead the charts followed by Big Data, Computer Vision and Robotics. The UK attracted $2.9B in 2019 and close to $10B cumulatively since 2015 followed France and Germany with a combined $2B. At rank four, deeptech companies in Switzerland have raised $1.6B from 2014 to 2018 and so far in 2019 $445 million.

Investments from European VCs
Since 2015, European VCs have raised $50B with $13 billion alone in 2018. In the UK and Germany, the mean fund size at final closing has surpassed $100M while elsewhere in Europe the average fund sizes are still much lower. On a European-wide basis, the mean VC fund has a final closing at $45M.

UK-based VCs have raised $17B in cumulative funds since 2014, followed by French ($11.7B), German ($7.6B) VCs and Swiss ($3.2B). On a population-adjusted basis, VCs based in Luxembourg ($771) and Switzerland ($191B) have raised the highest amount of funds from 2016 to 2018, a reflection of their attractiveness as global financial centres.

Tech Companies, Diversity and other concerns
The study surveyed 1200 participants of which 50% are first-time entrepreneurs and 21% are female. According to the findings, for every one woman-executive, there are 12 men executives. In terms of funding, there has been a decrease in the investment made into female-founded companies. In 2019, $92 in every $100 invested in Europe went to founding teams that were all men.

This discrepancy between the genders indicates that there is still a lot to be done in promoting diversity. Further concerns that call for attention include are promoting inclusion, founders well-being, fostering a generation of purpose-driven companies and end the disconnect between policymakers and founders.

The complete study is available at Atomico.

(RAN/SK)