What 2016 meant for Tech in Europe
Despite the slowdown of the US VC investments, 2016 was a tremendous year for our dearly beloved EU Tech Scene. For you, we analysed at the several thousand of funding rounds that occurred last year (according to Crunchbase Data), below is what you need to know:
- $11 Billion were invested in EU Tech startups, 45% (in amount) at a VC stage (round<$25M) 55% at a more PE stage (round >$25M)
- UK remains the leading ecosystem although is currently experiencing a slow down because of Brexit, especially on VC stage rounds
- France has overtaken Germany, in terms of VC funding. Looking at H2 2016, this trend is massive
- We strongly believe that the Tech EU boom will continue in 2017
Methodological note : we manually excluded every non-tech/digital companies and non-PE/VC/Seed/Angel rounds (which for instance represented several hundreds million $ just for France)
As we anticipated in our post of the spring of 2016, the slowdown in the US had no bearing on European tech funding rounds. It’s like winter didn’t come for us :)
Looking at the distribution of fundings among the main EU countries, here is what it looks like :
But as the UK is a more mature ecosystem, with more large/PE rounds, to draw a comparison between countries we need to take only VC rounds (funding < $25M) into account.
Although Britain is still leading, looking at the quarterly figures, the impact of Brexit is clear. France has slightly overtaken Germany because of a huge acceleration on H2 (+36% compared to H1).
Here is the distribution among the main EU Tech Hubs:
So the year 2016 wasn’t so bad after all… But how about 2017?
If we exclude the uncertain situation in the UK (and also the risks of politics outside Europe), all lights are green. Here is why :
- First and foremost (and what seems to me the very most important things), Tech startups are attractive for talent and many students want either to join a startup or to start their own business.
- First time Entrepreneurs are more and more skilled and experienced. They start looking at entrepreneurship early + education in school is more and more adapted for those who want to start their business.
- Money to support and to scale game changing ideas is here. Lots of new VC funds were raised this year both by new and existing teams.
- The tech investment business model has now been proven in Europe too, with lots of huge exits these last few months.
Our own deal flow index -the Q1 and Q2 2017 next fundings- largely reflects this surge (please note that here it’s a 12 month moving average allowing us to remove seasonality) :
For these few reasons why we strongly believe that the current entrepreneurial spring for tech in Europe will remain during the next quarters.
Last but not least we wish you all an amazing year 2017, full of hope and self-fulfillment !
PS. This article was co-written with Eric Gossart, Léa Verdillon, Sébastien Le Roy and Kevin Bonte from Serena Capital Team.
Here is the slidehare of our study :
