Brussels, Belgium – 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. Emerald’s Managing Partner and CEO, Gina Domanig, was chosen to be on Invest Europe’s VC Council earlier this year. The report, 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.
Key findings:
- 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.
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.”
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