Dow Jones Venture Capital Report Europe 1Q 2015

The following report presents Dow Jones VentureSource’s quarterly findings for European venture capital fundraising, investment, valuation, and liquidity. 

Highlights for 1Q 2015 include: 

European venture capital fundraising down by a quarter from 4Q 2014;
Venture capital investment into European companies rose to highest figure since 3Q 2001;
Though exits via mergers and acquisitions (M&As) and initial public offerings (IPOs) rose slightly from the prior quarter, euros raised through IPOs shrunk to less than a fifth of the 4Q 2014 total.

 

 
FUNDRAISING 

European Venture Capital Fundraising Experiences Downturn in 1Q 2015

• 13 European venture capital funds accumulated €874 million during 1Q 2015, a decline of 25% in euros raised and 38% in the number of funds with closings from 4Q 2014.
• Despite the decline in fundraising from 4Q 2014, euros raised improved by 36% compared with the year ago period, despite the number of funds with closings falling by 43%.
• The largest fund of the quarter was HV Holtzbrinck Ventures Fund VI which raised €285 million, accounting for 33% of the total amount raised for 1Q 2015.

FINANCING 

Investment into European Venture-backed Companies Improves in 1Q 2015 

• European companies raised €2.6 billion for 345 deals during 1Q 2015, an increase of 41% in the amount raised from 4Q 2014 despite a 5% slide in the number of deals completed.
• In contrast with the year ago period, investment improved by 63% despite a 12% reduction in the number of completed deals.
• Consumer Services was the strongest sector of the quarter in terms of attracting investment with Business and Financial Services in second. The sectors garnered 50% and 17% of all dollars invested during 1Q 2015 respectively.

Equity Financings into Europe-based, VC-backed Companies, by Industry Group (1Q 2015)

• Consumer Services received the largest allocation of investment during 1Q 2015 (50%), accumulating €1.3 billion through 103 deals. Although deal flow remained relatively steady, sector investment quadrupled from the 4Q 2014 figure of €326 million.
• Business and Financial Services placed second in terms of equity financing, taking a 17% share of all 1Q 2015 investment. The sector raised €443 million across 82 deals, a decline of 26% in capital raised and 12% in deals completed from the previous quarter.
• Information Technology placed in third, with companies in the sector gathering 16% of the total amount invested for the quarter. The sector received €436 million across 75 deals; a rise of 65% and 1% from 4Q 2014 in capital invested and deal flow respectively.

Equity Financings into Europe-based, VC-backed Companies, by Country (1Q 2015) 

• Germany was the most favoured destination for equity financing during 1Q 2015, receiving €921 million across 64 deals. The country took 35% of all equity financing for the quarter, tripling its 4Q 2014 investment total.
• The United Kingdom placed second, attracting a 34% share of European financing. Investment rose by 54% from the prior quarter to total €886 million while deal flow increased by 16%.
• France occupies third position raising €292 million, 11% of the total for the quarter. Austria rose to fourth position with a 7% share, raising €173 million during 1Q 2015.

LIQUIDITY 

Europe Sees Improvement in 1Q 2015 Venture Exit Activity from Prior Quarter

• 49 venture-backed M&As took place in Europe during 1Q 2015, up 7% from 4Q 2014 but down 6% on the figure for 1Q 2014.
• The largest M&A for 1Q 2015 was Trophos SA, a developer of compounds for the treatment of neurological and cardiac diseases, which was acquired by Roche AG for €470 million.
• 12 venture-backed IPOs took place during 1Q 2015, two more than those seen in the prior quarter and four more than the listings for VC-backed companies completed in the year ago period.

European VC-backed IPOs

• 12 venture-backed IPOs took place during 1Q 2015, two more than those seen in the prior quarter and four more than the listings for VC-backed companies completed in the year ago period.
• IPOs raised €417 million during 1Q 2015, a decline of 81% from the $2.25 billion raised in 4Q 2014, which was the highest total for a single quarter since 2Q 2000. Compared to the year ago period, VC-backed companies raised 7% less through IPOs during 1Q 2015.
• The largest European VC-backed IPO of 1Q 2015 was Ascendis Pharma’s January listing on the NASDAQ. The company raised a total of €89 million, accounting for 21% of the total amount raised through European venture- backed company IPOs for the quarter.