Recent data from Pitchbook revealed that European venture capital (VC) valuations continue to gain momentum, ending last year with a record quarter for venture capital indicating that 2022 could be an even bigger year for the region’s startup ecosystem.
The third quarter (Q3) report shows that in the angel and seed round, startups received record investments in the third quarter of 2021 as more capital entered the earlier stages of the VC lifecycle. According to the report, the average pre-valuation for owners and incorporation was €3.8 million during that period, up 22.5% from the record set in 2020.
Read more: 100 Unicorns will be born in Europe, the Middle East and Africa in 2021
One area that stood out was the software sector, where initial late-stage valuations reached €27.2 million in the third quarter, nearly double the record set in 2020.
Previously, the US was seen as the main source of innovative software and big technology companies, the report stated. “However, with lagging capital flowing into the major European software companies, we are seeing a number of companies emerging strongly in sub-sectors such as FinTech, Mobility, Business Productivity, and Cybersecurity.”
The UK and Ireland remained the main centers of venture capital in Europe despite Brexit, and investment in their companies was also above 2020 figures across the board, suggesting that their venture capital ecosystems are managing a post-Brexit era. Britain’s exit from the European Union is fine.
Another country mentioned in the report is France, where VC investment in French startups doubled in the last year alone, from €5.1 billion to more than €10 billion in 2021. The combined venture value of French startups founded since 2000 has increased 2000 significantly, 17.7 times since 2010 to reach 179 billion euros in 2021.
More information: Venture capital investment in French start-ups doubles in 2021 to $11.3 billion despite funding gap between regions
In December, French startup Lydia elegantly closed its Q3 VC investment deals in the country after a $100 million Series C round propelled it into unicorn status.
Read more: French Super App Lydia earns $100 million, worth $1 billion
Founded in 2013, the mobile financial services platform is the second most downloaded FinTech app in France, and from a peer-to-peer (P2P) payments app like Venmo, it has expanded to other offerings like loans, savings accounts, and most recently cryptocurrency trading for its 5.5 million clients. Client.
Read also: Lydia app users can now trade crypto assets on Bitpanda
The company is targeting 10 million European customers by 2025 and aims to become a financial “super app” for millennials and Generation Z customers, such as China’s WeChat and UK’s Revolut.
Starting with its France 2022 venture capital deals, French HR firm PayFit, which announced on Thursday (January 6) that it has raised a new Series E round worth €254 million ($289 million), has reached a valuation of some After money for 1.82 billion euros ($2.1 billion).
Founded in 2015 in France, the company has expanded into three major European markets – Germany, Spain and the UK – and serves more than 6,000 customers across the region. Prior to this funding round, the company had secured €179 million since its inception, including a €90 million Series D funding round that closed in March last year.
We are also likely to see more venture capital deals with non-traditional investors – including private equity firms, hedge funds, pension funds and sovereign wealth funds – rising in value and volume this year.
According to the report, these investors have become more exposed to the venture capital ecosystem in recent years, and “the abundance of unconventional capital entering venture capital rounds has been one of the main drivers of maturity within European venture capital in the past five years.”