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Key Findings

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Investors

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Purpose

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Policy

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Appendix

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Investors

We asked European VCs to give their perspective on a number of trends related to the underlying dynamics of the market. The sentiment was clear; competition has intensified. There was a strong level of agreement that competition between local VCs has increased and that T1 US VCs have become more active in Europe, even at the early stages. This intensification of competition is felt in valuations, the compression of fundraising timelines and more pre-emptive term sheets being offered to companies.

Thinking about the past 12 months, do you agree or disagree with the following statements:

Source:

Legend

  • Agree
  • Disagree
  • Neither agree nor disagree
Note:
Venture Capitalist respondents only. Numbers may not add to 100 due to rounding.

One driver of increased competition is the increase in the number of active investors deploying capital into European tech. This investor base continues to expand, with over 2,600 unique institutions participating in at least one deal in 2019. We can expect this number to come close to 3,000 once adjusted for the reporting lag.

Number of unique institutions that have participated in at least 1 and 5 investment deals in Europe per year

Note:
Number of unique investors (incl. investment funds, corporate investors & accelerators, but excl. angel investors) that have participated in at least 1 investment round per year. 2019 annualised based on data to September 2019.

The depth of the pool of investors varies according to the size of the round. While there are more than 1,500+ unique institutions that have made at least one investment into rounds of less than $10M, the number reduces to just over 100 unique institutions that have invested in a round of $100M or more.

Number of unique institutions by round size and by year

Note:
All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, grants. Please also note the data excludes Israel. 2019 based on data to September 2019.

There has never been stronger interest in Europe from US investors, who are more active in terms of their activity in the region, but also are spending an increasing amount of time on the ground to build their European network and dealflow.

Number of unique US institutions that have participated in at least 1 investment round in Europe per year

Note:
Number of unique investors (incl. investment funds, corporate investors & accelerators, but excl. angel investors) that have participated in at least 1 investment round per year. 2019 annualised based on data to September 2019.

One in five rounds raised in Europe in 2019 involved the participation of at least one US or Asian investor, up from just 10% in 2015.

US and Asian investors in European tech


21%
Share of rounds raised in Europe with at least one US or Asian investor participating

Share of European deals (%) per year with at least one US or Asian investor

Note:
All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, grants. Please also note the data excludes Israel. 2019 based on data up to September 2019.

US and Asian investors have been particularly important for the rise of large-scale funding rounds of $100M+ in Europe. In 2019, 90% of all $100M+ rounds involved the participation of at least one investor from the US or Asia.

Share of deals (%) >$100M involving non-European investors

Note:
All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, grants. Please also note the data excludes Israel. 2019 based on data up to September 2019.

The growth in US and Asian investor activity in Europe is reflected in the total capital commitments from investors based in those regions. In 2019, the total capital invested into Europe from US-based investors is approaching $10B, up nearly 3x since 2015.

Venture capital invested ($B) into Europe

Venture capital invested ($B) into Europe
Note:
All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, grants. Please also note the data excludes Israel. 2019 annualised based on data to September 2019.

US & Asian investors


90%
of $100M+ rounds raised in 2019 involved at least one US or Asian investor

Source:

I'd say the European funding gap has moved a lot more to later stages than in the past. Today, there are a lot of high-quality investors available from the seed stages until maybe Series B (referring to up to €30-50m rounds). However, from Series C onwards (now talking about €100m+ rounds), there are a lot fewer options available in Europe than elsewhere. For instance, in our case over 2/3 of the investors we spoke with for our Series C came from outside Europe, while we'd mostly focused on speaking with European investors up until our Series B.

Miki Kuusi

Wolt

Co-Founder & CEO

The volume of investment activity by corporate investors has also expanded considerably in recent years. In 2019, almost 700 unique corporate investors participated in at least one investment round involving a European tech company.

Number of unique corporate investors per year and number of deals involving at least one corporate investor, 2015-2019

Legend

  • # of unique corporate investors
  • # of corporate rounds
Note:
Unique corporate investor count is based on number of corporate (i.e. non investment fund) investors that have participated in at least 1 round per year. 2019 annualised based on data to September 2019.

The rise of corporate investor participation has been even more marked than the rise of US and Asian investors. 22% of rounds closed in Europe in 2019 involved at least one corporate investor, up from just 9% in 2015.

Share of European deals (%) per year with at least one corporate investor

Note:
All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, grants. Please also note the data excludes Israel. 2019 based on data up to September 2019. Includes corporate VC funds as well as corporate investors.

On the other hand, the most active Corporate VCs span a wide range of industries. With 4 of the top 10, Germany is home to some of the most active Corporate VCs, each one having at least one unicorn in portfolio - Graphcore, Fair, Bolt and N26.

Top 10 most active corporate venture capital investors in European tech by number of deals in the last 12 months

Note:
All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, grants. Please also note the data excludes Israel. 2019 based on data as of September 2019.

The depth of the corporate investor base is also apparent from a vertical perspective. Young companies can tap into a specialised pool of investors to navigate their scaling journey. It's also remarkable to see some of our homegrown European scale-ups such as Just Eat and Delivery Hero become active investors in the ecosystem.

Top 10 most active corporate investors for select vertical ranked by number of deals, 2015-2019

Note:
2019 based on data up to September 2019.

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