(MENAFN Editorial) SEATTLE andNEW YORK and SAN FRANCISCO and LONDON, Feb. 8, 2018 /PRNewswire/ --The European venture capital (VC) industry finished strong in 2017 with €16.9 billion invested across 3,306 deals, the highest amount of capital deployed on record, according to report. Although deal counts trended downward for the third consecutive year, median deal sizes reached a decade-high across all stages as investors increasingly targeted more developed companies commanding larger deal sizes – like, Improbable's €458 million series B and Deliveroo's €417 million Series F. Fast-growth sectors like Fintech and AI/ML also notably drove deal value, especially in UK/Ireland region, known as the VC backbone of Europe. Despite sliding exit counts, 2017 exit value held steady, bolstered by VC-backed IPOs, which had the strongest showing since 2014. To keep pace with ever-growing deal sizes, European VC investors have sought larger funds, as evidenced by the decade-low in fund counts while capital raised eclipsed €7 billion for the third consecutive year.
"The European VC ecosystem remains strong on all accounts as investors adapt to the rising valuations and changing market dynamics," said Cameron Stanfill, PitchBook analyst. "Deal sizes continued to trend upward, driven in part by a maturing VC ecosystem and support from government initiatives. The ripple effects of this can be seen in the tepid exit market and fewer, larger fund vehicles. In 2018, we expect European VCs will be closely watching the outcome of Spotify's unconventional public debut, as well as the possibility of a disruptive year for European IPOs."
European VC Investment Bolstered by UK/Ireland Region Healthy Exit Market Buoyed by IPOs
Overall, exit activity declined in 2017 but remained healthy on historical basis, despite the absence of mega-deals. Last year, there were €11.6 billion in capital exited across 426 deals, down from €12.6 billion exited across 471 deals in 2016. Even with lower exit counts, the healthy exit value suggests a stabilization of the market around a new standard of exit value. After a slow start, 2017 proved to be a renaissance year for VC-backed IPOs, raising over €3 billion across 53 offerings. Boosted by larger offerings of aging unicorns, Delivery Hero (€865.7 million) and Rovio (€424.61 million), 2017 was the strongest showing of public debuts since 2014, which holds the decade-high record for both IPO value and count—€5.2 billion across 79 IPOs. Looking ahead, Spotify's pursuit of a direct listing is expected to shake up Europe's IPO market in 2018. If the Swedish music steaming giant can achieve a successful public debut, it may forge a new exit path for other large late-stage companies.
Additional findings in this report include:
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