There has been a lot of discussion about the impact Brexit has had on Europe’s venture capital groups. Although start-ups from the continent raised record levels of funding last year, new data shows the firms struggled to raise money for new funds in the aftermath of the vote.
Foreign investors were responsible for the biggest investments into European startups. SoftBank, the Japanese technology group, led a €458m financing of UK virtual simulation start-up Improbable and US fund giants T Rowe Price and Fidelity invested $385m into Deliveroo, the London-based takeaway food app. Chinese ecommerce group JD.com also boosted figures with its $397m investment in Farfetch, the luxury website.
However the total capital raised by Europe’s venture groups fell by a quarter last year to €7.4bn amid growing uncertainty about the outcome of Brexit negotiations. New research from Pitchbook, the data provider, shows that the total number of new funds dropped to a ten-year low in 2017 despite a number of high profile launches.
The tougher fundraising environment follows two years in which money poured into Europe’s venture capital groups. Enthusiasm for the continent’s tech sector — especially in areas such as artificial intelligence and financial technology — dovetailed with low interest rates to attract pension funds, insurance companies and family offices on the hunt for returns.
More about the slowdown here.
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