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European VC ecosystem growth slows in 2022

After a record-breaking 2021 with staggering valuations and a total of 84 new European tech unicorns, the number of new venture capital investors in Europe has simultaneously decreased by almost half.

With 61 new investors in 2021, including ten headquartered in the United Kingdom, the total number of European investors thus rose to 817 at the end of the previous year. 

A study by international tech M&A advisor i5invest, venture builder i5growth, and the Entrepreneurship Center of the Vienna University of Economics and Business shows that British investors have in excess of €468 billion in assets under management and a particular focus on investments in HealthTech & Life Science.

Despite Brexit, the UK continues to lead the ranking of countries with the most local investors in Europe (351), followed by Germany in 2nd place (199), France in 3rd place (128), and the Netherlands in 4th place (70). While the DACH region grew the fastest in terms of new investors in 2020, Scandinavia counted among the most newcomers last year. “Most central European countries have relatively constant growth figures. Scandinavia however was able to increase while we observed only about one-third of newly founded investors in the UK in 2021 compared to the year before”, emphasises Herwig Springer, CEO of i5invest, indicating a possible change in trend.

The portfolios of British investors are the most successful out of any in a European comparison. Of a total of 130 European startups valued at more than one billion dollars, the so-called unicorns, 68% have at least one British venture capitalist on board. For companies that investors believe have the potential to reach this billion valuation threshold in the next 24 months, the so-called soonicorns, this figure is as high as 60%.

Out of the 191 investors primarily based in the UK, 67% have an early-stage investment focus, at least among other stages. This trend appears to be unbroken – nine out of the ten new investors founded in 2021 invest exclusively in early-stage startups. 

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