It is time to look ahead now that another year of venture capital records has been set. The global statistics was clear: the 2021 venture capital startup investment cycle set a new high; companies raised more money than ever before around the world, with specific locations setting new highs. Africa had a very bad year. The weather in North America was scorching. Latin America has a lot going on. Even under the weight of China’s regulatory onslaught, Asia was ablaze. However, there is Europe. Europe was active, as we discovered earlier this week.
Data from PitchBook on the European 2021 investment cycle estimates venture activity at €102.9 billion, up 120 percent from 2020 levels. According to CB Insights, European companies raised $93.3 billion last year, up 142% from the year before. Both sources showed increased volume, showing that the continent’s numbers were not boosted solely late-stage rounds. However, a market correction could be on the way. The recent stock market selloff of major comparables to high-growth, high-value startups has sparked concern.
The subject has been examined by TechCrunch, but before you think we’re pulling a subversive Chicken Little routine, the idea that venture capitalists’ perspectives on startup fundraising are shifting is something CNBC, Newcomer, and other newspapers are looking at. The Exchange inquired in late December if the era of super-rich software values was over. Today, we would like to broaden the subject to encompass all companies, while focusing on Europe. What is in store for this year’s burgeoning startup market?
We enlisted the expertise of Nalin Patel, EMEA VC Analyst at PitchBook, and Christoph Janz, co-founder of Point Nine Capital, to investigate the future of European venture capital. What is on the line? Hundreds of billions of dollars in private-market wealth are healthy and growing.
The fact that Europe had a fantastic 2021 could suggest one of two things: either that it cannot keep up the pace, or that the components are in place for a better 2022. PitchBook’s Nalin Patel is betting on the latter, with observations from both sides of the table. Patel pointed out that there is a lot of dry powder available from a variety of sources for investors. “International and atypical investors, such as corporate venture capitalists, private equity companies, and sovereign wealth funds, compete aggressively with larger traditional VC funds to invest in fast-growing European startups wanting to scale abroad.”
