Europe raises record-breaking €10.6bn of venture capital in first half 2019

Total amount of venture capital for European companies up 61pc in H1 2019 but deal volume drops by 7pc as investors back later-stage companies,

European companies raised a record-breaking €10.6bn of venture capital during the first six months of 2019, according to Refinitiv.

The total raised between January and June was 61pc up year on year.

Despite the record-breaking deal values, deal volumes continued to decline with only 683 rounds completed in the first half. This is 7pc down from H1 2018 and marked the slowest start to a year since 2009.

See also: Venture capital funding hits £4.3bn record high spurred by tech investment

Late-stage companies accounted for 26pc of total rounds in the first half, the highest level yet.

IT remained the main recipient of European venture capital investing in the first quarter by a wide margin, securing €8.4bn, or 80pc. This was followed by life sciences with €1.1bn and other sectors made up €1.0bn.

Investment from outside Europe into European companies continued to be a main driver, with funds based in America supplying nearly one third (31pc) of all capital.

See also: UK companies set for record year of venture capital investment

Top European VC deals in H1 2019 were the €1.1 billion funding round into OneWeb, followed by Deliveroo’s €515 million investment and GetYourGuide, which secured €433 million.

Greg Bauman, manager private equity contributions at Refinitiv said: “We’re seeing firms raising more money than ever from investors but at the same time, firms are becoming more selective and are preferring to invest in more established businesses.”

Private equity deals slow in H1 2019

European companies saw buyout and related deal values of €41.6bn in H1 2019, down 19pc from the same period last year but still the third-strongest first half in the previous decade.

A total of 624 buyout and related private equity deals were completed during the first six months of 2019. Despite a drop in values, these volumes were up 13pc from the same period last year.

As volumes increased, so too did PE’s share of all M&A activity, climbing to 8pc in H1 2019, a level not seen since the first half of 2014.

The top three sectors for investments were: industrial/energy with €9.5bn (23pc), consumer related with €8.1bn (20pc), and computer software with €7.1bn (17pc).

Top European deals for the half was led by Merlin Entertainments, which received a recommended offer of €6.6bn announced at the end of June. This was followed by the €4.3bn offer for Cepsa and the €4bn acquisition of Travelport Worldwide.

Global deal-making by European PE funds sustained a rapid pace in H1 2019, as investors joined 84 transactions valued at €21.9bn, the strongest first-half since 2008.

Bauman said: “Venture capital activity looks to be continuing at pace and looks likely to surpass the full year 2018 investment total by the end of September. This year is therefore likely to see the largest year since the dot-com era barring an unforeseen downturn.

“On private equity, we are also seeing a strong deal outlook for the rest of the year which should make reaching or surpassing the 2018 tally is a real possibility.”

Further reading

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