The UK has retained its crown as Europe’s venture capital epicentre with 351 local investors now actively pumping cash into the country’s startups, new data has revealed Britain welcomed ten new investors to the market last year as it surged ahead of Germany in second place with 199 and France in third with 128, according to data from the Entrepreneurship Centre of the Vienna University of Economics and Business and investment firm i5.
Venture investors based in the UK are also leading the pack in the success of their portfolios, revealed the new report released today.
“The portfolios of British investors are the most successful out of any in a European comparison,” Vienna University researchers said.
“Of a total of 130 European startups valued at $1bn, the so-called unicorns, 68 per cent have at least one British venture capitalist on board.”
For companies that investors believe have the potential to reach a $1bn valuation threshold in the next 24 months, the so-called ‘Unicorns’, this figure is as high as 60 per cent, the researchers added.
It comes as new research showed that London’s venture capital investors have been tempting staff away from traditional finance to keep up with a boom in investment in the past year, which saw $25.5bn pumped into the capital’s tech firms.
Around 57 per cent of new hires into venture capital jobs in 2021 moved from investment banking, according to recruitment firm Dartmouth Partners.
UK-based startups have also bucked a slowdown in publicly listed tech firms in the first quarter of 2022, with $9.9bn invested in startups by VC firms, according to KPMG’s latest Venture Pulse report.
Analysts are braced for a slowdown in the private market, however, with rising interest rates expected to dent VC firms’ ability to raise capital and public market volatility hampering exits via IPOs.
“2022 has been characterised by uncertainty stemming from macroeconomic volatility, and we believe VC stakeholders feel growth may be harder to come by,” said analysts at investment data firm Pitchbook.
“Interest rates have risen in major economies, which could signal the end of the cheap capital that has underpinned the private market boom during the past decade.”
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