€12 Billion in Deals – The EU Startup Funding Report 2015
Date: 6 May 2016 Share on Twitter Share on Facebook
As the Brexit debate rolls on, all eyes are on EU trade stats, so it is the perfect time to take an in-depth look at the state of tech financing across the continent. Luckily, Tech.eu has published a detailed report, which tracks all funding and M&A deals involving European and Israeli tech firms over the course of 2015, and the results are surprisingly positive!
For a start, the data room report found that €11.92 billion was raised by tech start-ups last year, a huge increase on 2014 figures, which estimated that €7.9 billion was raised in equity financing for European firms, and twice the 2013 figures of €6.3 billion. It is also the most successful year ever for Europe’s tech start-ups, beating the previous record of €10.6 billion which was raised in 2001.
So what does €12 billion worth of deals actually look like? We’ve pulled out a few of the highlights from the report in an effort to better understand Europe’s dynamic tech sector.
1. FinTech reigns supreme
FinTech ranked number one in the top verticals by number and by amount, followed by e-commerce, and then health and food. This is hardly surprising given the rise of money transfer and mobile payment apps such as CashCloud, iZettle, and Azimo. The most successful firms are based in and around existing financial hubs such as London, Berlin and Paris, which arguably offer easier access to institutional investors and potential hires. As mobile and contactless payment gains traction across the continent, this sector is likely to keep on growing.
2. Germany and UK are the key investors
In total, Germany and the UK contributed more than 50% of all the funding received by tech startups in 2015. Germany’s High-Tech Gründerfonds (which holds investments in Asana Yoga, Cumulocity, e-Wings.com, and more than 450 other firms) and Index Ventures (Deliveroo, CityMapper, movingo) were the two single largest investors, with the Nordics’ Northzone VC taking third place.
3. The average investment is worth €7.9 million
In total, Tech.eu recorded 1516 individual deals across Europe and Israel, with a total value of €12 billion. That equates to an average of €7.9 million per deal – an impressive figure by any standards. However, we do not know how much of that was invested as seed money in untested firms, and what proportion was invested as part of a second or third round of investment, after the company had already shown evidence of profitability.
4. 2016 is already shaping up to be more successful
While 2015 was a stand-out year for the EU’s tech start-ups, this year is on track to be even more successful. According to Tech.eu’s European Tech Funding Report Q1 2016, this year has already broken all records, with a massive €4.8 billion already being raised across 760 different deals. That’s a 60% increase in funding year-on-year, and a 44% increase from Q4 2015. However, it is worth noting that these figures were slightly distorted by the €910 million funding round by Spotify, a well-established name in the industry, as well as €300 million in funding for Africa Internet Group.
5. Tel Aviv is on the rise
While it has not yet reached the same status as London or Berlin, Tel Aviv is making a name for itself as an up-and-coming start-up hub, and Israel’s tech industry is growing significantly. Israel received the third largest number of investments in 2015 (after Germany and the UK, respectively), and it was also third on the list when it came to the amount of capital raised (after the UK and Germany, respectively). This points towards a steady rate of success, and marks out Tel Aviv as a city worth watching in 2016.