Venture capitalists put EUR843 million to work in 230 deals for European companies in the fourth quarter of 2010, according to Dow Jones VentureSource. This represents the lowest quarterly investment figure for Europe in 2010. Compared to the fourth quarter in 2009, deal flow dropped 31% from 333 deals and investment declined 16% from EUR1 billion invested in the fourth quarter of 2009.
Throughout 2010, 1,039 venture deals raised EUR3.9 billion, a slight increase in investment from the record low in 2009 when EUR3.6 billion was collected for 1,118 deals.
“The general economic woes and, more specifically, the sovereign debt crises in Greece, Ireland and Portugal have fuelled fears of a double dip recession across Europe. Although investment and deal activity is up from the all-time lows of 2009, a robust recovery has failed to materialise and investors remain cautious about deal making,” says Jessica Canning, global research director, Dow Jones VentureSource.
In the fourth quarter of 2010, every major industry recorded a slide in investment and deal flow compared to the fourth quarter of 2009, except Consumer Services which increased investment by 13% to EUR119 million. Deal activity increased 16% over the same period last year to 52 deals in the fourth quarter of 2010.
A different picture emerges when looking at the annual figures, however. Compared to the lows of 2009, all of the major industries recorded increased investment in 2010 ― Business and Financial Services rose 22%, Information Technology (IT) rose 20%, Healthcare rose 14% ― with the exception of Consumer Services which was down for the third consecutive year.
