European vc environment overview: 5 years ahead of the conservative flavor is still in the air

author introduction: Christian Hernandez is former Facebook international business development director, after his leaving early White Star Capital venture Capital company. Stephen Piron is BrightSun data analysis company co-founder. In this paper, data from startup BrightSun search tools under the multiple channels.

in the past few years, a lot of people have written on the evolution of the European science and technology industry ecosystem, including Christian view on European business outlook, and Stephen about European seed fund outbreak, and boost London and Berlin to be a leading European center for entrepreneurship.

we publish this article intends to use the data to analyse the opportunities and challenges in European business ecosystem. European startup at each stage of financing are lower than their American counterparts, the financing period is as high as 8 months, much longer than their American counterparts. European companies, A round of funding gap exists obviously, and B rounds of financing gap problem seems to be more serious.

however, this kind of situation is changing. As White Star Capital, the Passion, and the Point about Nine such emerging risk investment company, with the rise of the early European startup financing sources become more and more. Some investment institutions in the growing process, such as Atomico and Highland Capital Europe etc., joined the top investment institutions to invest in startups B theory among.

the rise of the new investment company, reflects the European entrepreneurs growing strength, vitality and tenacity. Over the past five years, the successful completion of the seed round A 600% increase in the number of European companies, A round of average size is also growing steadily, Helsinki, London, Madrid, Berlin and other financing to complete smoothly exit the number of companies to accelerate growth.

seed round the momentum of growth

in the past few years, the seed round number in Europe and the United States are showing strong growth momentum, fundraising in the United States in 2009 to 2009 increased by 85%, more than 2000 individual transactions, Europe is growing at nearly six times a year, a year more than 900 individual transactions.

the reasons for this phenomenon is quite likely the macro economy, policy, and social factors, such as make people more entrepreneurial passion, or because of the angels enjoy various preferential tax, may also be a European each entrepreneurship center appears more startup accelerator and incubators.

financing gap began in the seed round

from 2009 to 2014, the U.S. company seed round the average amount of doubled, to $500000. And raised in 2010 to 2010 in Europe is declining, eventually to $150000, driven by large seed financing action Sweden and Germany, sustained and healthy growth first eight months of 2014 the figure to $300000, but a period of time the data is too small, not enough to predict the future of the overall situation.

in other words, most of the time in the past five years, European seed companies compared with competitors, insufficient funds in the United States. This may suggest that the potential of European startup only a third of the transatlantic venture companies in the United States, but we don’t agree with this hypothesis.

we know that the market does have larger scale from the start, but as the King, the SuperCell, BlaBlaCar, company receives, the rise of companies such as services, European startup sustained growth momentum and its global development potential also nots allow to ignore. In addition, like Facebook, Twitter, App Store and Google Play enough to cover the global distribution channels, volume size of the market, and can’t be the only factor of the market value.

financing prospects, investment confidence to improve

from the point of average size, European companies in A round of funding, it seems, is close to the company. Since 2009, A European round Numbers have nearly doubled, the average growth of 73%, the amount of $3.75 million. And the United States in 2014, A round of funding transactions for 531, up 28% from 2009, the average amount of $5 million.

however, if completed seed financing and successfully won A round of funding the company scale, it is easy to find “A wheel gap” is more serious, than the “gap” seed round twice. According to since January 2009, according to data from more than 9000 seed financing only 6% of European companies successfully won A round of funding, while the proportion was 12% of American companies. More it is worth mentioning that European companies continue to complete B round the proportion of only 1.5%, compared with 4% for U.S. companies this.

so, between Europe and the United States capital inputs in the process of A round of funding gap is narrowing, supply situation of the capital of Europe during the initial start-up financing.

Europe company B less round of financing, financing during longer

in B rounds of financing, the company’s success proportion and scale significantly more than the average European companies.

from 2009 to 2014, the European company B changed little round of financing, the company has increased by 37%. Since 2012, the United States and the European B round average gap remains at about $3 million. This suggests that European companies to a serious shortage of capital, which especially for companies that compete with their American counterparts.

Investment speed

now we from the perspective of investment “speed” in-depth analysis of this phenomenon. Here said the “speed” refers to A company since announced seed round to A round of funding to B round between the interval of time.

at first glance, the round of funding from seed to the speed of A round of funding from 424 days to speed up to 205 days seems to be A very good sign. But one thing we want to know, in 2013 the European average seed round raised just $150000, while the us $500000.

we believe Europe seed round of funding to the interval between A round of funding is not A cause for celebration, this shows that European entrepreneurs are forced to focus on speed up the progress of financing, rather than on products and business development and expansion.

the company A round of funding to B round the interval of the average is 375 days, and the company is 486 days. That is to say, the European company less than 20%) American companies (A round of financing before start B round of funding for A round of funding to maintain four months more than American companies and European startup financing most of the money to maintain daily operation, more not to invest in order to promote growth, expand the scale.

as European investors and entrepreneurs, we firmly believe that the European knowledge, technology and innovation in the field of talent is looking toward digital domain. European entrepreneurs have in their industry and global ambition, competitiveness and vision, according to data confirm the momentum, but also reflects the challenges they face.


You may also like...