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European venture capital investment rebounds in first quarter, says Library House

The volume of disclosed venture capital invested in Europe rebounded during the first quarter of 2008 to EUR1.40bn, compared with EUR1.41bn and EUR1.26bn in the two previous quarters, acco

The volume of disclosed venture capital invested in Europe rebounded during the first quarter of 2008 to EUR1.40bn, compared with EUR1.41bn and EUR1.26bn in the two previous quarters, according to research and consultancy firm Library House.

Taking into account any late reporting of first-quarter deals, investment levels so far this year appear to indicate a strong recovery in the sector, especially in contrast to the US, which has seen a decline in venture capital investment so far this year.

Europe saw a slight decline in the number of deals from 429 in the previous quarter to 410, while the UK saw venture capital investment volume grow by 80 per cent to its highest level since the first quarter of 2006.

Other countries that saw higher venture capital investment include Israel, where investment grew by 124 per cent from EUR129m in the fourth quarter of 2007 to EUR290m, and Sweden, which saw a 100 per cent increase from EUR34m to EUR68m. However, Ireland saw an 84 per cent decline to EUR14m, its second lowest quarter since 2006.

The European cleantech sector saw a marginal decline in the number of deals in the first quarter, from 46 to 41, but the value invested dropped from EUR255m to EUR122m.

The most active investor in the first quarter was High-Tech Gründerfonds Management, a German-based hi-tech investment firm, with nine deals, while Balderton Capital, Intel Capital and Scottish Enterprise Fund had seven deals each. Index Ventures was the top investor by syndicated amount invested, taking part in three deals totalling EUR83.9m.

The only venture-backed IPO was France’s RocTool, a licensor of rapid moulding technologies for composite materials. The company raised EUR10m in March when it listed Euronext Paris’s Marché Libre.

The top exit of the quarter was the sale of Sweden’s MySQL, provider of the world’s most popular open-source database software, to Sun Microsystems in January for EUR675.6m. Belgium’s former telecoms monopoly Belgacom acquired Netherlands-based telecoms firm Scarlet for EUR185m, and Nokia Siemens Networks bought UK telecommunications software provider Apertio for EUR140m.

‘It is very encouraging to see Europe rebound in the first quarter of 2008 in terms of investment,’ says Library House chief executive John Owen. ‘With the US in decline, it illustrates the strength of Europe and our portfolio companies.’

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