European Venture Investment Bucks Trend, Maintains Momentum In First Quarter

Venture investment into European startups reached $ 29.8 billion in the first quarter of 2022 — the second-highest quarter on record for the continent’s startups, Crunchbase data shows.

First-quarter venture funding to Europe last quarter was up 21 percent year over year, and up 4 percent quarter over quarter, bucking the trend globally and in North Americawhere Q1 2022 investment fell compared to Q4 2021.

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European startup funding reached an all-time high of $ 37.6 billion in the second quarter of 2021. That period showed increases at all funding stages, but significantly more so in late-stage venture funding.

Quarterly funding in Europe in 2020 ranged between $ 10 billion and $ 13 billion per quarter. Since last year, quarterly funding has trended upward from the first quarter of 2021, when it totaled $ 24.6 billion.

Let’s dive into European funding by stage over the past five quarters to parse these trends.

Late stage is up

Prior to 2021, a smaller proportion of Europe’s venture dollars went to late-stage and technology-growth rounds. In 2021, a shift took place, with more significant amounts allocated to late-stage funding. Funding for those companies came from growth-equity firms in the US and around the world.

Companies in Europe that raised super-sized funds in the first quarter of 2022 include London-based Checkout.comwhich raised a $ 1 billion Series D funding from a host of growth-stage investors, making it the second-most highly valued European private company at $ 40 billion, below the 2021 valuations of Klarna at $ 45.5 billion, and ahead of Revolut valued at $ 33 billion.

Other large late-stage funds were raised by Turkey-based delivery company Getir and micro-mobility company Boltbased in Estonia.

Early stage is up

Early-stage funding in Q1 2022 was $ 9.4 billion, up 50 percent year over year from the first quarter of 2021. This is significant as it shows Europe’s first-quarter venture numbers were driven up not just by a few outsized late-stage funding rounds , but also a growing early-stage funding environment poised for future growth.

Seed stage

Seed-stage startups across Europe raised $ 2.1 billion in the first quarter across more than 1,000 companies. 1


Countries leading at earlier stages

The six countries that led in seed through early-stage funding last quarter are the UK, with France and Germany competing for second place, followed by the Netherlands, Switzerland and Spain.

Global trends

How do the trends we find in Europe compare with global funding in the first quarter?

Globally, first-quarter funding fell from a Q4 2021 spikedue in part to the dip in value in public technology stocks.

Funding to European startups bucks these trends with amounts up for the quarter on both an annual and quarter-over-quarter basis.

Why is this the case? Europe is a growing venture market with a historically less developed late-stage funding market. Europe is also a market — outside of the more established US market — where global growth investors are looking for new opportunities to invest.

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Further reading

Methodology

The data contained in this report comes directly from Crunchbase, and is based on reported data. Data reported as of April 7, 2022.

Note that data lags are most pronounced at the earliest stages of venture activity, with seed funding amounts increasing significantly after the end of a quarter / year.

The most recent quarter / year will increase over time relative to previous quarters. For funding counts, we notice a strong data lag, especially at the seed and early stages, by as much as 30 percent to 40 percent a year out.

Please note that all funding values ​​are given in US dollars unless otherwise noted. Crunchbase converts foreign currencies to US dollars at the prevailing spot rate from date funding rounds, acquisitions, IPOs and other financial events are reported. Even if those events were added to Crunchbase long after the event was announced, foreign currency transactions are converted at the historic spot price.

For M&A transaction analysis, we include venture-backed companies and exclude companies that previously went public.

Glossary of funding terms

Seed and angel consists of seed, pre-seed and angel rounds. Crunchbase also includes venture rounds of unknown series, equity crowdfunding and convertible notes at $ 3 million (USD or as-converted USD equivalent) or less.

Early-stage consists of Series A and Series B rounds, as well as other round types. Crunchbase includes venture rounds of unknown series, corporate venture and other rounds above $ 3 million, and those less than or equal to $ 15 million.

Late-stage consists of Series C, Series D, Series E and later-lettered venture rounds following the “Series [Letter]”Naming convention. Also included are venture rounds of unknown series, corporate venture and other rounds above $ 15 million.

Technology growth is a private-equity round raised by a company that has previously raised a “venture” round. (So ​​basically, any round from the previously defined stages.)

Illustration: Dom Guzman

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