Europe’s venture capital investment reached €20 billion for the first time ever, according to PitchBook’s 4Q 2018 European Venture Report.
Despite the 25.9% drop in deal volume year-over-year (YoY), large deal sizes and increased interest from nontraditional investors helped drive deal value to the high-water mark. Median early-stage deal size increased 86.9% from 2017, while late stage median deal size increased by 67.9% over the same period.
Investment Activity
Capital invested in the fourth quarter of 2018 reached €5.1 billion across 586 deals, bringing 2018 annual totals to €20.5 billion invested across 3,384 deals.
European deal value was driven largely by investments completed within the €10 million to €25 million range. This size bucket made up 25.0% of total deal value and represented an 5.4% increase over last year.
The DACH region secured €4.4 billion in investment and made up 15.8% of total deal count, up from 13.6% in 2017. The high concentration of mature startups in the region attracted investors, as evidenced by the elevated deal sizes – median late-stage deal size in Germany reached €15.0 million in 2018, compared to €6.7 million for all European late-stage rounds.
Exits
Exit value reached a decade high of €47.4 billion in 2018, due to two outsized public listings, Spotify and Adyen, which combined drove €30.3 billion in exit value, or 63.9% of total capital exited.
While exit value reached a decade high, there were only 373 completed liquidity events in 2018 – the lowest count since 2012.
The drop in the number of exits pushed the investments-to-exits ratio over 9.0x.
Fundraising
The annual count of closed funds in Europe fell to the lowest level in the last decade, with a just 62 vehicles raised during 2018. This represents a 23.5% decline from 2017’s fund count.
In contrast, total capital raised reached €8.4 billion, a 0.2% increase from 2017 and 42.9% increase from 2014 levels. Moreover, median fund size reached an all-time high of €123.2 million, a sizable 59.3% increase from the previous year.
FinSMEs
21/01/2019