Consumer Internet Companies Fuel Growth In European Venture Investment

LONDON, July 30, 2012 /PRNewswire/ -- Venture-backed companies based in Europe raised €1.3 billion through 273 venture capital deals during the second quarter of 2012, a 14% increase in capital raised but a 20% decline in deals from the same period last year, according to Dow Jones VentureSource.  



"Deal activity fell but investment grew as the lacklustre exit environment kept companies private longer. As companies age, they often need larger financing rounds to continue, which boosts the amount invested," said Anne Malterre, European research manager, Dow Jones VentureSource. "We saw deep declines in renewable energy, in part due to the U.K.'s feed-in tariff cuts, and in healthcare. There were some bright spots, however, as VCs increased the percentage of deals done for early-stage companies and interest in online start-ups remained strong."

During the second quarter, 38 European venture-backed companies were acquired, a 34% drop in deals from the same period last year, and three companies went public, which was half the number of initial public offerings (IPOs) recorded in the second quarter of 2011.

Through the first six months of this year, venture capital investment totaled €2.2 billion for 550 deals, a 7% decline in capital and 10% decline in deals from the year-ago period.

The industry trends in the second quarter largely reflect the recently released U.S. investment figures, with Internet and software companies faring well but significant declines recorded in the healthcare and energy industries.

Investment in Consumer Internet Companies Remains Strong



Consumer services saw the greatest gains of any industry in the second quarter, raising €493 million through 72 deals, more than double the €239 million raised during the same period last year despite only one more deal being completed. Nearly two-thirds of the capital collected by the consumer services industry went to the consumer information services sector, which includes social media, online entertainment and search companies. 

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