European VC fundraising sees significant increases in Q4 2013
European venture capital fundraising in Q4 2013 doubled in number of funds and almost tripled in amount raised compared with 3Q 2013, according to the latest DJX VentureSource VC report.
Venture capital investment into European companies experienced an increase quarter over quarter as well as year over year.
Consumer services, the dominant sector in terms of investment allocation, received its largest investment figure for a quarter since 3Q 2000.
Exits experienced an uptick as venture-backed initial public offering (IPO) activity reaches highest quarterly figure since 2Q 2010.
European companies raised EUR1.5bn for 357 deals during 4Q’13, a six per cent uptick in the number of deals completed and an 18 per cent rise in capital raised from the previous quarter. In contrast with 4Q‘12, deal flow and investment experienced similar improvements, with increases of five per cent and 24 per cent respectively.
A total of EUR5.6bn was raised during 2013 as a whole, an improvement of 15 per cent on 2012 and seven per cent on 2011. In terms of deal flow, 1,395 were completed in 2013, equating to an increase of six per cent on 2011 and 2012 figures.
The consumer services sector received the largest allocation of investment during 4Q’13 (37 per cent), accumulating EUR553m through 106 deals, an increase of 136 per cent from 3Q’13 in capital raised despite deal flow remaining level.
Healthcare placed second in terms of equity financing, taking a 27 per cent share of all 4Q’13 investment. The sector raised EUR392 million across 55 deals, a rise of 23 per cent and 31 per cent from respective 3Q’13 figures.
Business and financial services occupies third, with companies gathering a 15 per cent share of the total amount invested during the quarter. The sector received EUR223m across 92 deals, an uptick of three per cent in deal flow but a drop of 29 per cent in capital raised from Q3 2013.
The consumer services sector placed first for euros raised during all of 2013, with EUR1.5bn equating to a 28 per cent share of investment for the year. Healthcare companies raised EUR1.4bn giving the sector a 25 per cent share, while the information technology sector placed third with a 19 per cent share of investment (EUR1.1bn).
The UK remained the favoured destination for equity financing in 4Q’13 with a 29 per cent share of all investment into European VC-backed companies. The country received EUR427m across 91 deals, a drop of 26 per cent and five per cent from respective Q3 2013 figures.
Germany consolidated its position in second with a 19 per cent share of investment, raising EUR277m across 66 deals, a 59 per cent increase in euros raised and an 18 per cent rise in deal flow from the previous quarter.
Sweden climbed to third, thanks in large part to Spotify’s November round of financing, raising EUR257m and representing a 17 per cent share of investment. France, consequently, dropped to fourth spot with a 10 per cent share. The country raised EUR144m during 4Q’13, a 20 per cent decline from the previous quarter.
In 2013 as a whole, the UK took a 29 per cent share of investment (EUR1.6bn), Germany an 18 per cent share (EUR992m), and France received a 14 per cent share (EUR785m).
M&As of venture-backed companies in Europe fell slightly during 4Q’13, by 10 per cent from 3Q‘13 and by five per cent from 4Q’12 with a total of 36 transactions completed during the quarter.
The largest M&A of 4Q’13 was for Helsinki-based Supercell Oy, which was acquired by GungHo Online Entertainment for EUR1.1bn.
145 M&As were completed for venture-backed companies in Europe during 2013, up one per cent from the 143 completed during the 2012 but falling 26 per cent from the 197 seen during 2011.
Eight venture-backed IPOs took place during 4Q’13, quadrupling the number completed during 3Q’13 and up by 60 per cent on 4Q’12. A total of 15 IPOs were completed for the year, level with 2011 but down by one from 2012.
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