London Holds VC Reins in Europe As Paris and Berlin Gain Ground

Despite Brexit and its uncertainties for businesses, London holds the reins of the VC power in Europe being the first city for number and value of rounds in the first half of the year, according to a brand-new research by data powerhouse Refinitiv.

Indeed, companies based within the UK received €4.3 billion of VC investment between January and June, a 100% increase from the same period a year ago.

This increase in value mostly came as a result of companies based within London, which made up 150 of these rounds valued at €3,4 billion, or an 80% share of the nation’s total volume.

Top Rounds

Leading the top rounds list for the first half remained the €1.1 billion funding round into OneWeb from Q1, a London-based satellite communications company, led by SoftBank with support by Qualcomm and Grupo Salinas.

Other top deals newly added during the second quarter included food delivery service Deliveroo’s €515 million investment led by Amazon with support from existing backers Greenoaks Capital, Fidelity Investments, and T. Rowe Price, as well as online tourism platform GetYourGuide, which secured a €433 million investment by an investor group including SoftBank’s Vision Fund, Temasek, Lakestar, Korelya Capital, Heartcore Capital, and Swisscanto Invest.

Eiffel Tower, Paris, France. Photo by Chris Karidis on Unsplash.

Paris

However, the two most active investment firms during the half were both based in Paris. These were Bpifrance with 37 investments and Idinvest Partners with 23.

France ranked second during the half, with 178 rounds completed during the period. This was down 15% from H1 2018, however total round values of €2.2 billion were up 58%. Companies based in Paris were involved in 73 of those, or 41% of the national volume.

Berlin

Rounding out the top three, Germany saw 70 rounds valued €1.2 billion, which equates to volumes being down 35%, and values remaining relatively flat, just up 2%. Berlin’s 35 deals valued at €910 million represented a 79% share of the nation’s total investment.

Berlin, Germany. Photo by Stefan Widua on Unsplash.

Trends

More in general, analysts confirm that European venture capital funding continued its rapid pace through the end of the first half of 2019, with €10.6 billion invested across 683 rounds of financing.

However, despite the continued strength in funding values, volumes were down 7% year-over-year, resulting in the slowest H1 since 2009.

Why?

“We’re seeing firms raising more money than ever from investors but at the same time, firms are becoming more selective and are preferring to invest in more established businesses.”

Greg Bauman, manager private equity contributions at Refinitiv.

What’s Next?

“Venture capital activity looks to be continuing at pace and looks likely to surpass the full year 2018 investment total by the end of September. This year is therefore likely to see the largest year since the dot-com era barring an unforeseen downturn,” Bauman argued.

Find out more here.

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