VentureSource
The following report presents Dow Jones VentureSource’s quarterly findings for
European venture capital fundraising, investment, and liquidity. The included charts and
graphs offer a comprehensive view of the trends currently affecting the venture capital
market.
Highlights for 2Q 2014 include:
- European venture capital fundraising rallied from customary first quarter decline to match 2Q 2013;
- Venture capital investment into European companies improved to reach highest quarterly investment figure since 3Q 2001;
- Despite a slide in mergers and acquisitions (M&As), overall exit activity improved from the previous quarter due to the highest number of initial public offerings (IPOs) in a quarter since 4Q 2006.
Highlights for 2Q 2014 include:
- European venture capital fundraising rallied from customary first quarter decline to match 2Q 2013;
- Venture capital investment into European companies improved to reach highest quarterly investment figure since 3Q 2001;
- Despite a slide in mergers and acquisitions (M&As), overall exit activity improved from the previous quarter due to the highest number of initial public offerings (IPOs) in a quarter since 4Q 2006.
FUNDRAISING
European Venture Capital Fundraising Rallies in 2Q 2014
20 European venture capital funds accumulated €1.03 billion during 2Q 2014, equating to an increase of 58% in
euros raised from 1Q 2014 despite the number of fund closings remaining flat. Though level with 2Q 2013, the
raised figure falls short of the €1.18 billion raised during 2Q 2012.
A total of €1.68 billion were raised by 40 European venture capital funds during the first half of 2014, representing a dip of 5% in euros raised despite fund closings increasing by 29% from the first half of 2013.
The largest fund of the quarter was Index Ventures’ VII LP fund which raised €400 million, and accounted for 39% of the total amount raised for 2Q 2014.
A total of €1.68 billion were raised by 40 European venture capital funds during the first half of 2014, representing a dip of 5% in euros raised despite fund closings increasing by 29% from the first half of 2013.
The largest fund of the quarter was Index Ventures’ VII LP fund which raised €400 million, and accounted for 39% of the total amount raised for 2Q 2014.
FINANCING
Investment into European Venture-backed Companies Improves in 2Q 2014
European companies raised €2.1 billion for 365 deals during 2Q 2014, an increase of 2% in the number of
deals and 41% in capital raised from the previous quarter. 2Q 2014 enjoyed the highest quarterly investment
figure since 3Q 2001 when €2.7 billion were raised.
In contrast with 2Q 2013 figures, despite deal flow decreasing by 10%, investment improved by 42%.
For the first half of 2014, European venture-backed companies drew in €3.6 billion in 723 deals, a decline of 5% in deals completed but a rise of 35% in euros invested from the first six months of 2013 .
In contrast with 2Q 2013 figures, despite deal flow decreasing by 10%, investment improved by 42%.
For the first half of 2014, European venture-backed companies drew in €3.6 billion in 723 deals, a decline of 5% in deals completed but a rise of 35% in euros invested from the first six months of 2013 .
Equity Financings into Europe-based, VC-backed Companies, by Industry Group
(2Q 2014)
The Consumer Services sector received the largest allocation of investment during 2Q 2014 (37%), accumulating €788 million through 109 deals. While deal flow picked up by just 2% from 1Q 2014, sector investment rose by 76%. The five largest deals completed for the quarter were all for companies in Consumer Services.
Business and Financial Services placed second in terms of equity financing, taking a 26% share of all 2Q 2014 investment. The sector raised €540 million across 108 deals, an increase of 33% in capital raised despite a 5% dip in deal flow. The sector’s investment total was the largest for a single quarter since 1Q 2001.
Healthcare remained third, with companies gathering 18% of the total amount invested during the quarter. The sector received €375 million across 52 deals, an uptick of 6% in both deal flow and capital invested from 1Q 2014.
The Consumer Services sector received the largest allocation of investment during 2Q 2014 (37%), accumulating €788 million through 109 deals. While deal flow picked up by just 2% from 1Q 2014, sector investment rose by 76%. The five largest deals completed for the quarter were all for companies in Consumer Services.
Business and Financial Services placed second in terms of equity financing, taking a 26% share of all 2Q 2014 investment. The sector raised €540 million across 108 deals, an increase of 33% in capital raised despite a 5% dip in deal flow. The sector’s investment total was the largest for a single quarter since 1Q 2001.
Healthcare remained third, with companies gathering 18% of the total amount invested during the quarter. The sector received €375 million across 52 deals, an uptick of 6% in both deal flow and capital invested from 1Q 2014.
Equity Financings into Europe-based, VC-backed Companies, by
Country (2Q 2014)
The U.K. remained the favoured destination for equity financing in 2Q 2014 with a 28% share of investment into European VC-backed companies. The country received €598 million across 97 deals, an increase of 7% in deal flow and 58% in amount invested from 1Q 2014.
France placed second with a 19% share of investment. While deal flow saw an increase of 42% from 1Q 2014 with 74 completed, investment more than doubled from the €184 million drawn in during the previous quarter to reach €395 million.
Germany occupy third spot, raising €322 million, representing a 15% share of investment. The Netherlands rose to fourth spot with an 8% share, raising €166 million during 2Q 2014. It was the country’s highest quarterly investment total since 3Q 2000.
The U.K. remained the favoured destination for equity financing in 2Q 2014 with a 28% share of investment into European VC-backed companies. The country received €598 million across 97 deals, an increase of 7% in deal flow and 58% in amount invested from 1Q 2014.
France placed second with a 19% share of investment. While deal flow saw an increase of 42% from 1Q 2014 with 74 completed, investment more than doubled from the €184 million drawn in during the previous quarter to reach €395 million.
Germany occupy third spot, raising €322 million, representing a 15% share of investment. The Netherlands rose to fourth spot with an 8% share, raising €166 million during 2Q 2014. It was the country’s highest quarterly investment total since 3Q 2000.
LIQUIDITY
Venture Exits in Europe See Overall Increase in 2Q 2014 Despite M&A Slide
38 venture-backed M&As took place in Europe during 2Q 2014, a decline of 19% from 1Q 2014 but an uptick of
6% from 2Q 2013.
The largest M&A of 2Q 2014 was Crossknowledge Group Ltd., a corporate e-learning service provider, which was acquired by John Wiley & Sons for €127 million.
19 venture-backed IPOs took place during 2Q 2014, 11 more than in 1Q 2014 and the most since 4Q 2006. Companies raised €407 million for their listings during 2Q 2014, a slight decline from the €449 million seen in 1Q 2014.
The largest M&A of 2Q 2014 was Crossknowledge Group Ltd., a corporate e-learning service provider, which was acquired by John Wiley & Sons for €127 million.
19 venture-backed IPOs took place during 2Q 2014, 11 more than in 1Q 2014 and the most since 4Q 2006. Companies raised €407 million for their listings during 2Q 2014, a slight decline from the €449 million seen in 1Q 2014.
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