Wednesday, January 15, 2014
DJX VentureSource Europe --3Q 2013
Highlights for 3Q 2013 include:
- European venture capital fundraising declined from 2Q 2013 and 3Q 2012 both in the number of funds and amount raised;
- Venture capital investment into European companies experienced a quarter over quarter decline;
- Business and financial services and energy and utilities were the only two sectors to register quarter over quarter increases in capital raised;
- Exits remain steady as venture-backed merger and acquisition (M&A) activity in Europe improved in 3Q 2013. Initial public offerings (IPOs), however, took a dip.
European Venture Capital Fundraising Experiences Decline from 2Q 2013 Levels
11 European venture capital funds accumulated €574million in 3Q 2013, a drop of 45% in amount raised from the prior quarter and a 15% decline in the number of funds.
In contrast with 3Q 2012, the number of funds fell by 35% while the amount raised declined by 30%. 3Q 2013 represents the lowest quarterly figures for amount raised and number of funds since 3Q 2011.
The largest fund of the quarter was Serena Capital’s FCPR Serena II fund, which raised €100 million, accounting for 17% of the total amount raised for 3Q 2013.
Venture capital funds have raised a total €2.36 billion across 38 funds in 2013 so far, down 14% and 24% from respective figures for the first 9 months of 2012.
Investment into European Venture-backed Companies Experiences Quarter over Quarter Decline
European companies raised €1.13 billion for 319 deals during 3Q’13, a 12% fall in the number of deals completed and a 32% decline in capital raised from the previous quarter.
In contrast with 3Q‘12, deal flow experienced a 7% uptick, while investment dipped by 1%.
In 2013 so far, 995 deals have been completed raising €3.9 billion, a respective 4% and 7% increase on figures posted for the equivalent 2012 period.
Equity Financings into Europe-based, VC-backed Companies, by Industry Group
The business and financial services sector received the largest allocation of investment during 3Q’13 (26%), accumulating €294 million through 81 deals, an increase of 33% from 2Q’13 in capital raised and 7% in number of deals.
Healthcare held on to second position in terms of equity financing, taking a 21% share of all 3Q’13 investment. The sector raised €243 million across 39 deals, falling 44% and 46% from respective 2Q’13 figures.
The consumer services sector occupies third position, with companies gathering a 20% share of the total amount invested during the quarter. The sector received €228 million across 101 deals, an uptick of 3% in deal flow but a drop of 45% in capital raised from 2Q’13.
The IT sector saw its share of investment fall from 28% in 2Q’13 to 12% in 3Q’13. Companies in the sector completed 65 deals for a total of €131 million, a drop of 11% in deal flow and 72% in capital raised from the previous quarter.
Equity Financings into Europe-based, VC-backed Companies, by Country
The U.K. reclaimed its position as the favoured destination for equity financing during 3Q’13 witha 48% share of all investment into European VC-backed companies.The country received €545 million across 94 deals, up 147% and 21% from respective 2Q’13 figures.
France rose one place to second despite capital and deal flow falling by 11% and 29% respectively from the previous quarter. The country received €183 million for 51 deals, representing a 16% share of all investment for 3Q’13.
Germany dropped to third raising €135 million, a 12% share of investment having had the largest allocation in Europe during 2Q’13. The investment figure represents the lowest quarterly amount for the country since 3Q’11.
Russia maintained fourth position raising €49 million in 19 deals, a decline of 59% in capital raised despite a 6% improvement in the number of deals completed.
Venture M&A Activity in Europe Experiences Uptick in 3Q 2013, IPOs Falter
M&As of venture-backed companies in Europe rose by 39% from 3Q‘12 with 39 deals completed during 3Q’13, three more than the number of M&As completed during 2Q’13.
The largest M&A of the quarter was Neolane SA, a provider of customer marketing and communications software, which was acquired by Adobe Systems Inc. for €459 million.
108 M&As have been completed for venture-backed companies in Europe during the first 9 months of 2013, up 3% from the 105 completed during the first 9 months of 2012 but down 29% from the equivalent 2011 period.
One venture-backed IPO took place during the quarter, down from the three completed during 2Q’13. Five have been completed for the year so far, a drop of 55% when compared with the first 9 months of 2012.