The latest EY Startup Barometer shows that there is more capital and more funding available for young companies on the old continent. Investors in Europe are now also prepared to risk higher sums of money.
Startups in Europe are increasingly able to find fresh capital. Investors are also willing to risk very large volumes of cash. The startup barometer from consulting and auditing company EY shows that the number of funding rounds with a volume of €100 million and more increased to 12 from 10 compared to the same period of the previous year.
On the whole, investments increased by 27 percent to €10.2 billion in the first half year. During this time, the number of financing rounds also rose by 19 percent to 1,995. However, compared to the second half of 2017, the funding volume fell by eight percent. The study included only companies that were established in the last ten years.
According to the EY study, the European startup eco system has become stronger. It also shows that the three top countries, the UK, Germany, and France, with the hot spots London, Berlin, and Paris are still well ahead of the other European countries and capitals.
Investors prefer British startups
In spite of the looming Brexit, venture capitalists still prefer British startups. They received a total of €3.1 billion. Germany is in second place with €2.4 billion, followed by France with almost €2.0 billion. Switzerland recorded a marked increase, which brought it to a volume of €415 million, putting it behind Sweden in fifth position in the European ranking.
Austrian startups are also benefiting from the “generous” mood. Total investments have more than doubled, from €46 million to €103 million. Parallel to this, the number of funding rounds increased by 65 percent, from 17 to 28. This puts Austria in 13th place in a European comparison.
London at the top
In the European ranking, London is clearly at the top, with €2.0 billion and 297 financing rounds. As in the previous year, Berlin is in second position, with €1.6 billion and 123 funding rounds, ahead of Paris (€1.4 billion, 197 funding rounds). Consequently, in the first sixth months of 2018 almost 50 percent of the venture capital went to a startup in the top 3 cities. Based on the financing volume, Stockholm and Dublin were in fourth and fifth positions, with €325 million and €281 million respectively. Munich was in 6th place, with a financing volume of about €215 million. Vienna rose from 23rd to 17th position, with about €71 million and 15 funding rounds.
Auto1 front runner in terms of funding
The biggest deal in the first half took place in Germany. Softbank invested about €460 million in the Berlin-based used car startup Auto1. British FinTech startup Revolut 207 was in second place, with €207 million. In third place was the Berlin-based furniture retailer Home24 (€172 million), followed by the UK FinTech Atom Bank (€169 million).
Europe in 3rd Position
According to Venture Pulse Q1 2018 from KPMG, venture capitalists invested almost USD 50 billion in the first quarter of 2018, which is almost twice as much as in Q1 2017. However, year over year, the number of deals remained constant at 2,661. 2018 is also characterized by mega deals. And investors continue to prefer the “fourth” financing round (series D). On the other hand, it remains difficult to find funding for projects in early phases.
In terms of VC investment, the study from KPMG puts Europe in 3rd position worldwide with USD 5.2 billion and 548 deals, behind the U.S. with USD 29.4 billion and 1,782 deals and Asia (USD 14.6 billion and 317 Deals).
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