European VC sees biggest investment quarter since 2001

European companies raised €2.6 billion for 345 deals during the first quarter of 2015

Europe's venture capital scene was a pretty mixed bag in the first quarter of this year. While the amount invested by VCs rose nicely, the amount raised by those firms fell somewhat ominously.

European companies raised €2.6 billion for 345 deals during the first quarter of 2015, according to the 1Q’15 Europe Venture Capital Report from Dow Jones VentureSource, released on Monday. That represents an increase of 41% in the amount raised from the previous quarter. In fact, venture capital investment into European companies rose to highest figure since 2001.

At the same time, there was also a 5% slide in the number of deals completed quarter-to-quarter. 

The biggest sector for investment was Consumer Services, with 50% of all the money invested during the quarter,  with €1.3 billion through 103 deals. Business and Financial Services was a distant second, with 17% of all funding. It saw €443 million across 82 deals, a decline of 26% in capital raised and 12% in deals completed from the previous quarter.

There was one company that propelled European venture capital forward during the quarter: Rocket Internet, which went crazy for food delivery companies during the first three months of the year. The company accounted for three of top five deals during the quarter: it's €288 million investment in Delivery Hero; the €111.59 million it invested in Grocery Delivery EServices USA; and the €104 million it put into Foodpanda. 

The other two investments in the top five deals were €107.18 million into Nabriva Therapetics, and €100 million in Sigfox SA.

Germany led the way for equity financing, receiving €921 million across 64 deals, for a total of 35% of all funding during the quarter, It triped its 4Q 2014 investment total. It was followed by the United Kingdom, with 34% of financing, and France, with 11%.

The quarter also saw a rise in exits quarter-to-quarter, jumping 7% with 49 venture-backed M&As. Still, that number was down 6% from the same quarter the year before. 

Of those 49 exits, 12 were IPOs, two more than those seen in the prior quarter and four more than the same quarter in 2014. Those IPOs raised €417 million, a decline of 81% from the $2.25 billion raised in the fourth quarter of 2014.

The largest European VC-backed IPO of 1Q 2015 was Ascendis Pharma, which raised €89 million, accounting for 21% of the total amount raised through European venture-backed company IPOs for the quarter. 

The largest M&A during the quarter was Trophos SA, a developer of compounds for the treatment of neurological and cardiac diseases, which was acquired by Roche AG for €470 million. 

Overall, it looks like a pretty healthy quarter for European venture capital, except for one thing: funds raised significantly less money than they did the previous quarter. 

13 European venture capital funds accumulated €874 million during the first quarter of this year, representing a decline of 25% in euros raised, and 38% in the number of funds with closings, from the fourth quarter of 2014. 

The largest fund of the quarter was HV Holtzbrinck Ventures Fund VI which raised €285 million, accounting for 33% of the total amount raised for 1Q 2015. That was followed by AXA Group, which raised €200 million, and Fountain Healthcare Partners, which raised €85 million.

(Image source: blogs.channel4.com)