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European VC deal value and fundraising activity approach record highs in H1

European venture capital (VC) deal value registered the third largest quarterly figure on record in Q2, an incredible achievement amid widespread economic uncertainty, according to data released by PitchBook.Pitchbook’s Q2 2020 European Venture Report reveals that, across Europe, investment in sectors brought to the forefront by the coronavirus pandemic such as food delivery, mobility, software and biotech remained particularly strong even as companies were forced to adapt operations or shift to remote workforces. Corporations, seeing opportunity in tech-focused businesses like cybersecurity, helped VC deals with CVC participation in H1 2020 keep pace with the tear away record set in 2019. 

The UK & Ireland remains the largest VC ecosystem in Europe in terms of deal value, driven by mature startups attracting sizeable rounds. After a sluggish start to the year, VC exits recovered commendably in Q2 2020 as sectors such as video conferencing saw surges in demand and focus on healthcare solutions remained top of mind for investors and companies. VC fundraising has defied lockdowns, in part due to France & Benelux posting strong numbers and North America-headquartered GPs continuing to raise Europe-based funds, putting a record annual total within reach if the pace set in H1 2020 continues. PitchBook says it expects specialist funds targeting individual sectors such as pharma and biotech to proliferate going forward. 

“Given how the coronavirus wrecked broader macroeconomic indicators, few would have expected 2020 deal value to be on course to match and potentially surpass the annual record set in 2019,” says Nalin Patel, EMEA Private Capital Analyst at PitchBook. “Strong deal value generated across financing stages and regions highlights the resilience and independence of the maturing VC ecosystem in Europe. We believe the level of freshly raised, undeployed funds in the first half of the year bodes well for long-term dealmaking in the region and future capital deployment strategies could be geared towards opportunities emerging from Covid-19.”

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