Venture Capitalists Fell in Love with Europe Last Year

Venture Capitalists Fell in Love with Europe Last Year

The 2021 may remembered as the peak year for venture capital in this long-running startup period. We used phrases like “bonkers” and “record-setting” when The Exchange looked at global data for venture capital activity in 2021. When we consider how far the venture asset class has come from such humble beginnings, those numbers may appear modest. To put that in context, according to CB Insights 2021 data, global venture capital activity was up about 4x since 2016, and 2021 more than quadrupled 2020’s record-breaking total activity of just under $300 billion. According to the data source, more than $620 billion was invested in venture rounds last year.

Given the size of the European venture capital scene, unexpected that 2021 is impressive, however, how excellent is it? Using data from CB Insights, EY, and PitchBook, we are looking at a year of superlatives in the European startup landscape, both regionally and, in certain cases, country-by-country. Today, our main goal is to figure out how much money European startups raised last year and how out of the ordinary those numbers are in historical terms.

Later this week, we will look at what the future holds for startups in the region. In summary, we want to know how recent market gyrations will affect how VCs fundraise and how capital disbursement will change in 2022 as public-market values fall and the IPO window appears to be closing amid market volatility, giving companies concerns about making a large debut. Is it possible for the good times to continue? Before we can answer that, we need to know how successful European companies have been in the last four quarters. Let us have a discussion about it.

In VC, Europe’s 2021, the year 2021 was a monster for Europe. The amount of money invested hit new highs. The volume of deals reached all-time highs. Exits soared to new heights. The market was running on all cylinders at the time. According to PitchBook’s European data collection, there were 10,583 venture agreements worth €102.9 billion in Europe last year. There were 2,865 first-time venture financings totalling €9.9 billion among them. 

In 2020, the values were €3.6 billion and 2,457 deals, up from €3.6 billion and 2,457 deals in 2019. The balance of the capital and transaction volume went to follow-on rounds, but we highlight the first-financing number as a sign of future venture investment in Europe’s unicorns and IPOs; capital invested on the continent today is not just going to super late-stage rounds.