Friday, February 13, 2015

Dow Jones VentureSource 4Q’14 Europe Venture Capital Report




The following report presents Dow Jones VentureSource’s quarterly findings for European venture capital fundraising, investment, valuation, and liquidity. Charts and graphs  available here offer a comprehensive view of the trends currently affecting the venture capital market. 

Highlights for 4Q 2014 include:
European venture capital fundraising experiences uptick from 3Q 2014, but suffers declines in both fund closings and euros raised for the 12 month period;
Venture capital investment into European companies falls from 3Q 2014, but improves by a quarter year over year;
Despite an overall fall in exit activity, the total amount raised through venture-backed Initial public offerings (IPOs) reached its highest point since 2Q 2000. 




FUNDRAISING 

European Venture Capital Fundraising Experiences Uptick in 4Q 2014 

18 European venture capital funds accumulated €927 million during 4Q 2014, an increase of 33% in euros raised and 20% in the number of funds with closings from 3Q 2014.
Despite the uptick in fundraising from 3Q 2014, the number of funds with closings during 4Q 2014 fell by 51% compared with the same period last year, while euros raised fell by 49%.
The largest fund of the quarter was Principia SGR’s Fund III which raised €160 million, accounting for 17% of the total amount raised for 4Q 2014.
Overall, the number of fund closings in 2014 was down by 4% to 76 from the year prior, while the total amount raised by venture funds fell by 18% from 2013 to €3.4 billion. 


FINANCING 

Investment into European Venture-backed Companies Falls in 4Q 2014 

Equity Financings into Europe – based, VC-backed Companies (2011 – 2014)
European companies raised €1.8 billion for 332 deals during 4Q 2014, a fall of 24% in the amount raised from 3Q 2014 despite just five fewer deals being completed.
In contrast with the year ago period, investment improved by 1% despite a 28% reduction in the number of completed deals.
In 2014 as a whole, European venture-backed companies attracted €7.9 billion across 1460 deals, a decline of 11% in deals completed from 2013 but an improvement of 25% in euros invested.




Equity Financings into Europe-based, VC-backed Companies, by Industry Group (4Q 2014) 

Business and Financial Services received the largest allocation of investment during 4Q 2014 (32%), accumulating €557 million through 80 deals. The sector remained the most attractive sector despite investment dropping by 41% from 3Q 2014. Deal flow remained flat.
Healthcare rose to second in terms of equity financing, taking a 30% share of all 4Q 2014 investment. The sector raised €535 million across 60 deals, an increase of 64% in capital raised and 25% in deals completed from the previous quarter.
Consumer Services was pushed down to third, with companies in the sector gathering 18% of the total amount invested for the quarter. The sector received €327 million across 96 deals; a fall of 53% and 3% from 3Q 2014 in capital invested and deal flow respectively.


Equity Financings into Europe-based, VC-backed Companies, by Country (4Q 2014)
The United Kingdom was the most favoured destination for equity financing during 4Q 2014, receiving €524 million across 69 deals. The country took in 30% of all investment into European VC-backed companies for the quarter.
Germany placed second, capturing 18% of European investment. Investment fell by 73% from the prior quarter to total €322 million. Deal flow remained relatively stable, however, with 66 completed.
The Netherlands rose to third position raising €243 million, a 14% share of investment. France placed in fourth position with a 12% share, raising €218 million during 3Q 2014.


LIQUIDITY 

Europe Sees Overall Decrease in 4Q 2014 Venture Exit Activity 

Exit Opportunities for European VC – backed Companies
(2011 – 2014)
42 venture-backed M&As took place in Europe during 4Q 2014, down 9% from 3Q 2014 but one up on the figure for 4Q 2013.
The largest M&A for 4Q 2014 was Belgium’s Clear2Pay NV, an e-payment solutions provider, which was acquired by Fidelity National Information Services for €375 million.
55 venture-backed IPOs took place during 2014, tripling the number of listings seen across Europe in 2013. 201 M&As were completed during the course of 2014, a 21% increase on the 166 that took place during 2013.


European VC-backed IPOs (2011-2014) 

10 IPOs were completed during 4Q 2014, a decline of 38% from the previous quarter’s total but an increase of one on those completed during 4Q 2013.
IPOs raised €2.3 billion during 4Q 2014, more than six times the figure seen in 4Q 2013 and the highest sum since 2Q 2000 when 71 IPOs raised a total of € 3.8 billion.
The largest European VC-backed IPO of 4Q 2014 was Rocket Internet AG’s October listing on the Frankfurt Stock Exchange. The company raised a total of €1.4 billion, accounting for 62% of the total amount raised through European venture-backed company IPOs for the quarter.

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