The number of venture capital investments (venture investments), in European companies fell last quarter from 2,454 to 1,671 deals. This is a drop of over thirty percent.
There is also good news. Despite the drop in deal volume, Europe managed to buck the downward investment trend. A total of €16.2 billion was raised in the third quarter of 2023, compared to €15.4 billion in the second quarter. This increase was mainly due to two mega deals signed in France and Sweden of more than EUR 1 billion.
- The number of venture capital investments in European companies fell more than 30% last quarter, from 2,454 to 1,671 deals;
- Europe managed to buck the downward trend, with a total appeal of €16.2 billion in the third quarter.
This is according to the Venture Pulse report, KPMG’s quarterly analysis of global venture capital (VC) investments. Worldwide venture capital investors were found to have continued to act cautiously this quarter, taking longer to close deals than in recent quarters. Global VC investments declined from 76.2 billion in Q2 to 72.2 billion in Q3. The number of investments fell from 9,563 to 7,434 deals.
“Venture investments are expected to continue to decline in Q4,” said Pien Lucassen, co-founder of KPMG Emerging Giants. She and her team help Dutch startups and scaleups grow and advise them during crucial moments, such as when preparing to raise capital or expand abroad. “Companies continue to face difficulties in attracting funding in uncertain market conditions. However, energy, cleantech, and AI are expected to remain very attractive to VC investors in much of the world.”
Interest in AI and cleantech continues to grow
“Cleantech,” an umbrella term for technologies, products, or services that contribute to a cleaner environment, continued to attract many of the biggest deals this quarter. The green sector is evolving rapidly, and cleantech and energy solutions are attracting major funding globally. For example, the sector accounted for more than half of the largest VC investments last quarter. In addition, it is no surprise that artificial intelligence (AI), despite the general slowdown in investment, remains highly attractive globally and is attracting increasing interest from venture capital investors.