EVCA publishes new data about European venture capital market

Last week EVCA published its annual private equity and venture capital report. In 2014 European venture capital investments increased by 6% to €3.6bn. More than 3,200 companies were venture-backed. Start-up stage investments represented the majority of venture capital activity by amount (52%) and number of companies (60%). The amount of seed investments reduced by 16% despite the number of companies increasing by 13%. Later-stage investments increased in amount by 10% despite a 4% reduction in the number of companies. Venture-backed companies in life sciences (31%), communications (21%) and computer & consumer electronics (20%) attracted over 70% of the capital.

Divestments from venture capital investments represented 42% of all exited companies and remained constant at over 1,000. The equity amount divested decreased by 16% to €1.9 billion, with venture capital accounting for 5% of total divestment. Trade sales were by far the most prominent exit route, representing 45.3% of divestment at cost.

EVCA Chief Executive Dörte Höppner said: “Private equity and venture capital play an ever increasing role in Europe’s capital markets. In 2014, we saw a clear pickup of investment and divestment activity across Europe, supported by robust fundraising. Against the backdrop of extremely high liquidity in financial markets, our numbers are proof of a strong and stable private equity industry which displays no signs of overheating; the industry will continue to play a central role in the European economy.”

Switzerland: High investments as percent of GDP
Regarding Switzerland there is good news and bad news. In comparison with other European countries Switzerland performs well when it comes to venture investments. EVCA compared the venture capital investments as percent of GDP. The venture capital invested in Swiss start-ups in 2014 amounted to 0.031% of GDP. Only four countries did better: Norway (0.066%), Finland (0.060%), Ireland (0.049%) and UK (0.038%). The average of all European countries is 0.024%.

Despite its good position in the ranking the percentage in Switzerland dropped. The annual average venture capital investments as percent of GDP from 2010 were 0.037 compared to 0.031 in 2014 alone.

The figures come from the EVCA’s 2014 European Private Equity Activity report, the most comprehensive and authoritative source of private equity fundraising, investment and divestment data for Europe. The 2014 European Private Equity Activity report provides data on more than 1,200 European private equity firms and covers 91% of the €548 billion in capital under management in Europe.

The report can be downloaded from the EVCA website.