Research from Pitchbook has found that venture capital started 2021 off strongly, ultimately reaching an all-time quarterly high in Q1. Roughly €17.6 billion was invested across 1,907 deals, and VC activity on the continent is expected to break annual records as the year progresses.
Key findings include:
- Late-stage deals claimed nearly 75% of all VC capital invested in Europe as enormous rounds became a regular occurrence.
- The UK retained its position as Europe’s premier destination for VC dealmaking despite near-term uncertainty caused by Brexit and COVID-19.
- Exits in Q1 reached an impressive €21 billion. Thanks to the emergence of SPACs and frothy global market valuations, Q1’s exits surpassed the total exit value of 2020 in its entirety.
The UK & Ireland’s startups had a strong start to 2021. €6.1 billion was invested into the region’s startups, which is on course to surpass the record €15.4 billion invested in 2020. A healthy collection of fintech deals closed in Q1, thereby reinforcing Europe’s interest and expertise in the subsector.
In stark contrast to one year ago, Q1 2021’s VC exit value reached a remarkable €21.0 billion, thereby surpassing the exit value total from 2020 in its entirety. As during the past decade, Q1’s exit activity was affected by much-anticipated exits for highly valued VC-backed companies. The emergence of SPACs as a mainstream exit route, coupled with frothy market valuations globally, has helped exit outlooks improve.
SPAC activity exploded in the US in 2020, and Pitchbook expect exits via this strategy will spread quickly across Europe in 2021. SPACs have proven to be a fashionable and financially flexible choice for numerous US-based tech companies looking to exit.