27 September 2024

Invest Europe: €143 billion invested in 10 years: VC drives European innovation

European VC investment in 2023 2.3x greater than 10 years ago; Over 1m employed at European VC backed 26,100 start-ups, delivering financial & social returns; European VC funds outperform North American peers ... At 6.3x, Southern Europe sees highest fundraising growth over the decade.

Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, has released its second comprehensive study into Europe’s dynamic venture capital segment. Venture Capital: Fuelling European Innovation tracks venture capital in depth over the past decade, illustrating how the industry has grown and matured over the period. It also presents case studies to show how European VC backed start-ups are driving biotech innovations that are saving lives, and pushing advances in technology to improve European business operations.

• Venture capital funds invested in excess of €143 billion over the last ten years into more than 26,100 start-ups, including €16.5 billion in VC and growth-stage companies in 2023, 2.3x the amount invested in 2014. Fundraising has also grown exponentially, with VC firms raising €14.2 billion in 2023, representing 3.7x growth over ten years in France & Benelux, 3.4x in the Nordics, and 6.3x in Southern Europe. At the end of 2023, VC funds had over €50 billion in dry powder available for investment, meaning sizeable firepower to support more innovative start-ups.
• Over the same ten-year period, European venture capital generated net returns to investors of more than 20% annually, beating funds from North America and the Rest of the World. Since performance records began in 1986, European venture capital has returned 11.49%, well ahead of the MSCI Europe’s return of 8.05% for the same timeframe, highlighting long-term outperformance by European venture capital, as well as an acceleration in returns in more recent years.
• Venture capital investment also provides strong social returns, with VC backed companies creating 18% more jobs in 2022, well ahead of the overall European job market growth rate of 2%. At the end of 2023, VC backed companies employed more than 1 million people across Europe, with a concentration in sectors at the forefront of the digital transition and advances in medicine, such as Information Communication Technology (ICT) and Biotech & Healthcare.

Venture Capital: Fuelling European Innovation shines a light directly on dynamic start-ups. They include Endotronix, a digital health and medtech pioneer dedicated to tackling heart failure for millions worldwide; Evotix, a purpose-driven software business that helps over 500 companies improve their health & safety operations; and Shockwave, which exemplifies the ability of European VC firms to identify medical technologies with the potential to revolutionise heart disease treatment and improve patients' lives globally.

Eric de Montgolfier, CEO of Invest Europe, commented:

• "Innovation is Europe's lifeblood—more critical than ever for a thriving, sustainable future. Venture capital is hardwired for this, fueling startups that improve lives, tackle the challenges of the energy and digital transitions, and sharpen Europe's global edge."
• "European venture capital delivers more than financial gains; it powers job creation and competitiveness. After a decade of rapid growth, the right support and incentives can take it further, driving innovation, launching world-class startups, and multiply the benefits for all of Europe."

The release of Venture Capital: Fuelling European Innovation coincides with Invest Europe’s Venture Capital Forum taking place in Amsterdam on 25-26 September. The event is recognised as a leading European conference for LPs and GPs engaged in VC activity, providing insights into the evolution of the VC industry, and fostering debate on key topics for the future. It also includes an Innovation Showcase that shines a light on Amsterdam’s innovation ecosystem and the dynamic individuals carving the city’s VC success story.

InvestEurope

© Invest Europe (formerly EVCA)