The 2010s were a decade marked by nearly non-stop growth for Europe's VC scene. And if last year is any indication, that stunning ascent could continue in the 2020s.
Venture deal value in the region climbed to €42.8 billion last year, a new annual record. Firms raised €19.6 billion for new venture funds in 2020, another new all-time high. How did the market thrive despite the presence of a pandemic? PitchBook's 2020 Annual European Venture Report tells the full story of VC in Europe over the past 12 months, with other key takeaways including:
VC deal value remained aloft despite COVID-19 and set a new annual record, a noteworthy achievement considering macroeconomic damage delivered by the pandemic.
The deluge of capital deposited into larger rounds did not relent in 2020. Pandemic-induced opportunities and existing VC companies within technology and healthcare have been well positioned to grow. VC investment into the UK stayed robust despite Brexit, and capital from the US flowed freely into Europe in 2020.
European VC deal value with CVC participation set a new annual record in 2020.
Corporates in flourishing industries such as e-commerce and remote-working tools have driven CVC investment. Potential synergies have been fundamental to CVC strategies, as corporates have invested in startups to leverage their expertise. We expect corporates that have triumphed during the pandemic to lead CVC investment for the next few quarters.
VC exit value in Europe showed incredible strength amid widespread volatility in 2020.
After a lethargic start to 2020, exit value gathered momentum as the year progressed with one of the strongest quarterly showings ever in Q4. The pandemic created favourable market conditions for VC-backed companies seeking an exit in sectors such as biotech & pharma. We predict further lumpy exit flow in 2021 as exit decisions are influenced by news linked to restrictions, additional waves of COVID-19, vaccine rollouts, and underlying macroeconomic issues.
European VC fundraising achieved a record high in 2020 as LPs and GPs across the continent shrugged off long-term concerns posed by COVID-19.
Fundraising processes have successfully adapted to remote tools, while larger VC vehicles have attracted burgeoning heaps of capital from existing and nontraditional investors to target pandemic-proof and pandemic-induced opportunities. Restrictions on travel, recessions, and battered sectors have not stifled commitments from LPs, as GPs have been supplied with record levels of capital to put to work heading into 2021.