- VCs have invested €17.6 billion ($21.25 billion) into European startups in Q1 2021, new data shows.
- High-profile IPOs by Deliveroo and TrustPilot have sent EU exits to a quarterly high of €21 billion.
- America’s SPAC craze is set to push across into Europe, according to Pitchbook analyst Nalin Patel.
Venture capital investment into European startups in 2021 is set to eclipse the €45.3 billion ($54.7 billion) record set last year, new figures show.
A quarterly high of €17.6 billion ($21.25 billion) was invested into companies across Europe in the opening three months of the year, according to figures from research firm Pitchbook.
The US has long dominated VC investment across the world with $156 billion invested into domestic startups over the course of 2020 alone, as per figures from the National Venture Capital Association. But investor appetite for European startups has continued to swell in recent years as backers look beyond the US for innovative companies.
Over €45.3 billion ($55 billion) was raised across 7,825 deals across Europe last year, a massive increase on the €7.5 billion ($9 billion) accrued in 2011.
Nalin Patel, a Pitchbook analyst, said annual records for the bloc could be surpassed again this year following a rapid opening to the year.
"Throughout the quarter, enormous late-stage rounds closed as highly valued companies attracted ample investment," he said.
"First-time deal activity started the year off strongly as investors targeted trends accelerated by the COVID-19 pandemic."
Mr Patel also said that travel restrictions had not dampened fundraising and that VCs were particularly keen on healthcare and sustainability startups.
Among the larger rounds cited for driving up the level of VC investment was that of German ecommerce firm Branded, which raised €123.9 million ($150 million), and cryptocurrency service Blockchain.com, which raised €250.3 million ($302 million).
Startups in the UK and Ireland raised €6.1 billion ($7.4 billion) in Q1, putting it on course to surpass its previous record of €15.4 billion ($18.6 billion).
"In this post-Brexit era, UK-based companies have generally been able to attract capital and conduct business as usual, although certain goods such as food and clothing have experienced increased pricing and logistical delays," Pitchbook's Patel said.
"The UK continues carving out its new role outside the EU while simultaneously remaining among the most competitive and attractive economies in the world."
High-profile listings by the likes of food delivery app Deliveroo, used-car sales platform Auto1, and review site TrustPilot, also propelled European exits past last year's total within three months.
A total of €20.2 billion ($24 billion) was raised last year through company exits, where investors sell some shares in their business. But in Q1 2021 alone companies raised €21 billion ($25 billion).
"Despite new COVID-19 variants, European pandemic waves, and irregular vaccination supplies, companies have pressed ahead with exits to capitalise on encouraging market dynamics stemming from 2020's pandemic-driven shifts in spending," Patel said.
"After a robust Q1 2021, the record €50.5 billion exited in 2018 could be topped by year-end."
Deliveroo's public bow in March was widely viewed as a flop as its share price tanked following its listing on the London Stock Exchange.
The Pitchbook analyst also predicted the blank-check merger craze to move from the US into Europe this year. So-called SPAC deals, where companies go public through a merger with a special purpose acquisition company, ballooned in popularity last year.
SPACs raised around $79.87 billion across 237 deals in the US last year, according to Nasdaq figures.
Patel said he expects the exit strategy to "spread quickly" across Europe this year.
