The European venture capital market is defying the Brexit chaos and a looming economic crisis: Never before has so much been invested in European startups as in the first half of 2019. The figures from Great Britain are most surprising.
European startups secured more funding than ever before in the first half of 2019: In the first six months of the year, €16.87 billion flowed to young companies in Europe, according to recent figures from the management consultancy EY. This represents a sharp increase of a full 62 percent compared to the same period last year. The number of financing rounds increased by 10 percent to 2,301. This rapid increase is largely due to very large financing rounds, according to Hubert Barth, Chairman of the Management Board of EY in Germany:
“Across Europe, the number of transactions involving €100 million or more has more than doubled from twelve to 26.”
Not only did Great Britain maintain its leading position from the previous year, but the startup scene on the islands doubled its financing volume from €3.1 billion to €6.7 billion. France followed in second place, some way behind, and also saw significant growth. €2.8 billion flowed to French startups—an increase of 43 percent. After coming in second last year, Germany now follows in a close third place with €2.7 billion. The increase in Germany was significantly lower at 7 percent. The ranking is similar in terms of the number of financing rounds: Great Britain leads with 537 deals, ahead of France with 387 and Germany with 331 deals. Peter Lennartz, Partner at EY, praises the French startup support:
"French politicians have made the startup sector a top priority and are pursuing the clear goal of making France the top startup location in Europe by reducing bureaucratic hurdles for young entrepreneurs and by bringing investors and founders together. The massive political support for the startup scene is having an impact."
London dominates European VC investments
The lion's share of the money invested in British companies flows into the capital: €5.7 billion went to London. This means that one in three euros invested in Europe ends up in a London startup. Behind London are Parisian startups with €2.2 billion and Berlin startups with €1.7 billion. Munich startups secured €171 million in the first half of the year. This represents a decrease of 20 percent compared to the same period last year. The Bavarian capital thus ranks only eleventh.
The study authors are already providing an outlook for 2019 as a whole: In the third quarter of 2019, German startups secured €2.2 billion, more than double the amount of the same period last year. The total financing volume in Germany is currently €4.9 billion – already at the same level as the entire previous year.
