The European venture capital market is having a great 2015 so far, having just scored its second excellent quarter in a row.
25 European venture capital funds accumulated over €2 billion during the second quarter of 2015, according to the 2Q’15 Europe Venture Capital Report from Dow Jones VentureSource, released on Monday. Compared with the year ago period, euros raised improved by 63% in two more fund closings.
In the second quarter of 2015, the amount of euros more than doubled from what they were in the first quarter, with a 47% increase in the number of fund closings. Its actually the largest amount raised by VCs in at least the last three years.
What makes that even more impressive is that the amount raised by VCs had been the lone dark spot last quarter. The number had dropped 25% in terms of euros raised, and 38% in the number of funds with closings, from the fourth quarter of 2014. Now that the numbers have bounced back to an even higher level than before, if there were any concerns over European venture capitalists not being able to raise the amount of money needed to sustain the ecosystem, those should now be put to bed.
The largest fund of the quarter was Index Ventures Growth Fund III, which raised €650 million, accounting for 32% of the total amount raised. The next largest was Isis Innovation, which rased €283 million, followed by European Investment Fund, which raised €150 million.
On the other side of the plate, where those VCs use that funding to invest in European startups, the numbers were even better.
After the first quarter of 2015 saw venture capital investment into European companies rise to highest figure since 2001, the second quarter of this year was even better, as European companies raised just over €3 billion for 357 deals, an increase of 12% in the amount raised from the first quarter.
There was a 15% slide in the number of deals completed. This is likely a good thing, though as, typically, more money and less deals actually points to a maturing ecosystem, with companies raising later stages.
In contrast with the year ago period, investment improved by 31% despite a 15% reduction in the number of completed deals.
The strongest sector of the quarter in terms of attracting investment was Consumer Services, with €1.4 billion through 91 deal, or 45% of all euros invested duing the quarter, followed by Business and Financial Services, which saw €716 million across 99 deals, or 24% of all investments.
Healthcare was third, with €458 million across 52 deals, 15% of the total amount invested for the quarter.
The biggest deal of the quarter was Spotify, which raised €488.67 million in June. That was followed by Global Fashion Group, which raised €150 million in June; Funding Circle, which raised €139 million in April; Foodpanda, which raised €89 million in May; and AM-Pharma, which raised €78 million in May.
When broken down by country, the United Kingdom came in first, receiving €645 million across 89 deals. The country took 21% of all equity financing for the quarter, despite a 28% fall in investment from the first quarter.
Sweden came in second, with a 19% share of European financing. Investment reached a total €596 million, with Spotify’s huge round largely responsible for that. Germany came in third, raising €508 million, 17% of the total for the quarter. France placed fourth with a 15% share, raising €449 million.
In all, there were 15 venture-backed IPOs, an increase of three from the prior quarter but six fewer than in the year ago period. Those IPOs raised €533 million, an increase of 28% from the $417 million raised in the first quarter.
Europe versus the United States
Maybe it’s unfair, but we have to do it: sure, the European market is on the rise, but how does it compare with the big dog in the fight?
European companies have raised €2.6 billion and €3 billion in the first and second quarter of this year, respectively. That translates into $6.2 billion in U.S. dollars.
While that’s not a bad number at all, it can’t compare to the amount raised here, which saw $19 billion in the second quarter alone. Combine that with the $15.7 billion U.S. companies raised in Q1, and they have raised over five times what European companies have in the same time period.
(Image source: bsic.it)
