Globaltraded.com — Invest Europe, the leading association representing Europe’s private equity, venture capital, and infrastructure sectors, has released a comprehensive report highlighting the remarkable impact and growth of venture capital (VC) in Europe. The “Venture Capital: Fuelling European Innovation Report” offers insights into the substantial contributions of European venture capital to both the region’s economy and its broader society.
This report draws upon extensive research into industry trends and dives deeper into data analysis, covering various facets of Europe’s venture capital industry, including fundraising, investments, returns, and job creation. It underscores the pivotal role that venture capital managers, supported by long-term investors, play in backing innovative tech and biotech companies that have the potential to drive positive change while benefiting Europe’s economy and its citizens.
Key Highlights from the Report:
€96 Billion Invested in European Companies:
Over the past decade, European VCs have invested a staggering €96 billion in nearly 27,000 European companies, spanning startups and seed funding. The year 2022 witnessed a notable surge, with more than €18 billion invested, reflecting strong support for innovative and creative ventures.
Rapid VC Fundraising Growth:
The report reveals a substantial increase in European VC fundraising over the five years leading up to 2022. Nordic VCs experienced an eight-fold surge in capital raised, while DACH (Germany, Austria, Switzerland) managers recorded a three-fold increase. Overall, capital committed to VC funds reached a record €23 billion in 2022.
Impressive Returns:
European VC has delivered a net return of 12% since its inception, significantly outperforming the MSCI Europe benchmark, which returned 7.67% annually over the same period. Recent performance has been even more remarkable, with a net return of 23.07% over the past decade.
Job Creation:
Venture capital has played a vital role in job creation, offering employment to nearly 900,000 people in 2021. Companies backed by venture capital have exhibited substantial employment growth, with 15.3% net new jobs created in 2021, compared to 1.2% growth for all European companies.
Dry Powder for VC:
European venture capital dry powder reached a historic high of €53 billion in 2022. This increased capacity empowers the industry to support dynamic and innovative startups across the continent.
The report also features prominent case studies, such as BioNTech, the developer of the first mRNA vaccine against COVID-19, showcasing the instrumental role of VCs in driving innovations that have the potential to save lives.
Eric de Montgolfier, CEO of Invest Europe, emphasized the pivotal role of venture capital in propelling innovation and economic growth in Europe. He highlighted the transformative technologies being developed in areas such as software, cloud computing, AI, robotics, biotech, and cleantech. These innovations not only have the potential to revolutionize lives but also contribute to job creation and generate wealth for long-term investors.
This report underscores the indispensable role of venture capital in shaping Europe’s innovation landscape and fostering economic growth and societal well-being.