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Against all expectations of a year ago, the European market continues its progress

To download blog to pdf, click here.

Q1 2017 is one of the best first quarters over the past couple of years for European Tech funding.

The value of Large European HTI Transactions (≥$10m) was around a fifth higher in Q1 ’17 compared to the same period last year.

In the March 2017 Bulletin, we see a total of 26 Large HTI Transactions, of these, only 6 (about 20%) were led by traditional tech VCs, with:

These are what we call “generalist investors”, including corporates (increasingly from traditional sectors going through their own “digital transformation”) and all sorts of non-tech financial investors (private equity and hedge funds, family offices, state and sovereign funds, etc.).

Looking at Q1 2017 we have found that 48 deals included at least one generalist investor (68% of total deals) compared to Q1 2016 when 42 deals included at least one generalist investor (63% of total deals). Generalist investors also lead investments with 26 deals featuring at least one lead generalist investor (37% of total deals), compared to Q1 2016 when 24 deals featured at least one lead generalist investor (36% of total deals).

As we’ve put it before, see our August 2016 Bulletin, “everybody has become a technology investor” and this is creating a profound change to the market:

  • At the larger/later stage end, we see big public market investors invading the late-stage world, creating a price bubble which is now dis-inflating as companies come to public markets (latest victim: Cloudera, which priced 2/3 below the price of its D round two years ago).
  • At the smaller end we see a number of investors which may be new to technology but use their experience to deploy in specialist verticals such as healthcare (e.g. Merieux Developpement), mobility (e.g. d’Ieteren) or smart buildings (e.g. Marcol). In short the market is lifted by newcomer investors, and these newcomers are learning the tricks quickly: it pays to specialise rather than play the cycle (a la unicorn).

The conclusion? Where it used to be the preserve of specialist tech funds, the tech investment market is now of interest to all investors, which is the overriding factor supporting investment levels. We don’t believe this is a cyclical factor. We see it as a structural change which is changing (for the better) the perceived value of innovation.

This move in innovation financing away from traditional VCs is actually good for the VC business or entrepreneurs. For VCs, this means more opportunities to refinance their positions. For entrepreneurs this means more options, more doors to knock at. Reaching out beyond the VC world is what Go4Venture’s syndication service is about, connecting companies with a strong lead VC with corporate and generalist financial investors. For more information about the Go4Venture service email michael.galvin@go4venture.com.

See full March 2017 Bulletin – http://go4venture.com/bulletin/march-2017-monthly-bulletin

The Go4Venture Team

By |May 3rd, 2017|Uncategorized|0 Comments

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